Malaysia’s PM launches National Strategy for Financial Literacy (2019-2023)
Malaysia’s Prime Minister Dr. Mahathir bin Mohamad officially launched the country’s landmark National Strategy for Financial Literacy on July 23, 2019, a five-year plan that aims to raise the country’s low levels of financial literacy.
The strategy was developed by Bank Negara Malaysia (BNM), a member of the AFI network, along with five other financial institutions, including Securities Commission Malaysia (SC), and the Ministry of Education.
Speaking to a packed hall of financial experts, stakeholders and media, Dr. Mahathir reiterated the importance of the strategy, which will run until 2023, in promoting more understanding and responsible attitudes towards finance.
“Knowledge of financial management is very important to avoid over indebtedness,” he said, adding that household debt in Malaysia stood at 82 percent of gross domestic product. This, he said, was higher than high-income nations such as Japan (58 percent), Italy (40 percent) and the United States (76 percent).
Financial education and literacy are often seen as catalysts for financial inclusion, owing their ability to empower consumers to make informed financial decisions that can dramatically impact the financial well-being of individuals and society.
The strategy, a first for Malaysia, outlines five priorities areas: to nurture values from young (below 18); increase access to financial management information, tools and resources; inculcate positive behaviour among targeted groups; boost long-term financial and retirement planning; and build and safeguard wealth.
Ensuring its long-term benefits are action plans that target youth through the expansion of financial education into pre-school, primary and secondary school curriculums, as well as the introduction of capacity development and support for teachers.
Dr. Mahathir also expressed his support for public-private partnerships that boost the impact of action plans under the national strategy.
In a joint statement, BNM Governor Nor Shamsiah Yunus and SC Chairman Syed Zaid Albar said that “the ability to make sound financial decisions is vital to our everyday lives, enabling us to provide for current and future financial needs”.
“People from all walks of life should be equipped to manage personal saving and expenses, invest wisely and borrow responsibly”.
According to BNM, one in three Malaysians consider themselves as having “low financial knowledge”, particularly among low-income households. Furthermore, one in 10 believes that they are not disciplined in managing their finance.
The strategy builds on existing financial education efforts among government-linked agencies. For BNM, this includes Karnival Kewangan, an edutainment center that raises awareness on financial matters; Train-the-Trainers for counsellors at government agencies to conduct financial education sessions; and the online-learning platform Personal Financial Education.
BNM is part of a growing list of AFI member institutions that have developed national strategies or frameworks that target financial education, including Central Bank of Seychelles, Central Bank of Nigeria and Bank of Uganda.
BNM has been part of AFI since its inception, joining the network in May 2009. Over the past decade, BNM has made 24 Maya Declaration commitments, including that 95 percent of its adult population will have access to the formal banking system by 2020. Among its focus areas are consumer empowerment and market conduct as well as digital financial services. It is an active member that regularly co-hosts activities within the network, the largest being the 2013 Global Policy Forum, AFI’s keystone event that is co-hosted each year by a different member institution in a different region of the world. In 2014, the central bank won a bid to host AFI’s permanent headquarters in Kuala Lumpur. Over the past two years, together with AFI, BNM has been organizing a variety of capacity building events.