Financial education key to promoting stability, growth and inclusion

Financial education not only helps boost national financial inclusion rates but also ensures that those on the peripheries do not fall out of the formal financial system, AFI Executive Director Dr. Alfred Hannig said as he opened the Joint Learning Program on Empowering Consumers through Financial Education on 7 October in Kuala Lumpur.

Co-hosted by Bank Negara Malaysia’s (BNM) and AFI, the five-day event is gathering nearly 50 participants from 32 member institutions across all regions covered by AFI’s membership: Asia-Pacific, Sub-Saharan Africa, Middle East and North Africa, Latin America and the Caribbean as well as Eastern Europe and Central Asia.

Financial education helps maximize any potential benefits and promotes informed choices, especially among harder-to-reach groups, such as women, the youth and the elderly, Dr. Hannig added.

Aiding in this is technology and the spread of digital financial services, which are also mobilizing large numbers of previously unbanked groups into formal financial services, Dr. Hannig emphasized.

The growing importance of financial education is being noted among AFI member institutions, which are increasingly opting to develop national financial education strategies (NFES). This trend is reflected in growing demand for capacity building events that address NFES development, stakeholder engagement in implementing NFES, monitoring and evaluating financial education initiatives and digital financial literacy, Dr. Hannig said.

“NFES is an important pre-condition to making financial inclusion happen,” he said, underscoring AFI’s aim of “bringing services to unreached groups to make sure that no one is left behind.”

BNM can provide crucial insight to members attending this learning program, AFI Executive Director told participants while referring to Malaysia’s five-year National Strategy for Financial Literacy, launched by Prime Minister Dr. Mahathir bin Mohamad in earlier in July.

“BNM is an expert on the policy theme because they have proven their leadership position by treading the path themselves and achieved something very significant,” he said.  

Financial education is fundamental in maintaining sound monetary systems and financial stability as a means of promoting sustainable growth, said Ruziana Mohd Mokhtar, Deputy Director of its Human Capital Development Centre.

In her opening remarks, Mokhltar also highlighted Malaysia’s recently launched NSFL and its role in promoting better understanding of finance, along with responsible attitudes. .

“As the economy continues to progress, improving the ability and capability of Malaysians to take charge of their financial destiny will help them to attain and sustain a good quality of life, sustain improvements in standard of living through informed financial decisions throughout different life stages and build resilience during challenging times” she said.

BNM will lead the first three days of the event, which includes a visit to stakeholder organizations. Participants will use the remaining time to share their own country experience and to conduct practice exercises and action planning.

In keeping with the rise of interest in financial education, AFI saw a significant number of Maya Declaration Commitments at its recent 2019 AFI Global Policy Forum (GPF) that focused on financial education. Out of the 32 participating, 20 already have at least one commitment in this policy area.

This event is supported by AFI’s funding partners.