13 July 2018

Investing in financial literacy of youth today for sustainable financial inclusion tomorrow

Ever wondered why more than 80 countries worldwide have dedicated national programs to enhance financial literacy for children and youth? And why National Strategies for Financial Education all around the world identify youth as one of the main target groups for their coordinated approach to enhance financial capability of the populations? Read on for possible explanations.

Starting young pays off

Evidence shows that financial behavior is formed around the age of seven suggesting that financial education should start young. Children’s feelings about spending and saving can be measured from an early age and related to their behavior with money that will most likely influence their financial behavior as adults as well. The future of financial inclusion therefore, lies in the hands of children and youth.

A study by Ashby, Schoon and Webley suggests that saving at age of 16 is linked to saving at the age of 34; young people who start with a savings account during adolescence are more likely to have a savings account and save more up till adulthood. Examining the cross-country historical evidence of public policies to promote the act of saving, shows that countries that fostered saving habits among children in the past, tend to display a higher savings rate in recent years. (Garon 2013)

Why invest in financial literacy for youths

Imagine delivering financial literacy to a class of 30 children. You would need a trained teacher, a school, a few hours for the lessons and maybe some materials. Now imagine doing the same with 30 rural entrepreneurs, dispersed across a whole province, all of whom have different schedules, and maybe even an unpleasant experience with the formal financial sector. Which would have a stronger impact in the long term: reaching children or rural entrepreneurs? The answer: Reaching children in schools is more accessible and cost-effective than other target population, thus leading to a stronger impact in the long term.

However, there are challenges. Getting into schools may sometimes be more difficult than others because of special permissions needed or an overloaded school curriculum — or even due to financial pre-concepts that teachers and parents collectively share from their personal life experiences.

AFI members increase financial capabilities of youth

Awareness of investing in financial literacy programs, and financial inclusion for children and youth are continuing its upward trend globally. During the recent GPFI-G20 event that was hosted in Saudi Arabia, four AFI members were awarded for their achievements and work in financial education, and financial inclusion for children and youth. The four AFI members are the Ministry of Finance of Madagascar, the Royal Monetary Authority of Bhutan (RMA), National Bank of Georgia (NBG) and the Palestine Monetary Authority. These AFI members received an award for their contributions to increasing the financial capabilities of youths.

NBG, the newest AFI member among the list of winners, has been awarded for its outstanding achievements in a short span of time. Strong leadership from NBG and effective coordinating mechanisms led the country to achieve some remarkable results. NBG managed to introduce financial literacy programs in the school curriculum, in partnership with the Ministry of Education and other partners. As a result of close collaboration with the Ministry and private financial institutions, NBG implemented an innovative pilot project in 11 public schools across the country that combined financial literacy with access to savings products.

“This award indicates that we have chosen the right way to raise the level of financial education in the country. We believe that young population should be provided with the financial education from an early age in order to be prepared for managing their finances independently and making informed and responsible decisions upon graduating from school. With that purpose we actively cooperate with local and international partners to make financial education available to as many young people as possible. In this process, we are actively using traditional channels as well as digital media,” said Governor Koba Gvenetadze of National Bank of Georgia.


“Financial education is one of the priorities for the National Bank of Georgia. That is why we declared 2018 as the year of Financial Education, which means that the NBG will be more active in the direction of financial education,” further explained Governor Gvenetadze.

Visit www.nbg.gov.ge for more information.

View the full list of finalists and winners of this year’s Global Inclusion Awards. Heartfelt congratulations to all the winners!


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