Path to financial literacy
A STRONG foundation in financial literacy can help people lead productive and prosperous lives, with positive knock-on effects for national economies.
Saving, budgeting, investing, and managing finances well, the ‘ABCs’ of financial literacy, are life skills that need to be honed through practice and sustained effort.
There is little debate about the benefits of financial literacy.
Increasing bank account ownership in Fiji from 60 per cent in 2010 to 78 per cent in 2020 and formal financial account ownership from 64 per cent to 81 per cent in the same period was directly attributed to ‘ongoing financial literacy campaigns and awareness sessions.’
The debates start when discussing the best way to deliver financial literacy programs to a range of audiences, including primary, secondary school and university students, rural communities, working class adults, and even well-paid Pacific rugby players plying their trade in Europe.
To facilitate this important discussion, the Consumer Council of Fiji (CCF) organised a multi-sectoral panel discussion on ‘Better together: The Networked Path to Financial Literacy’ in Suva on Wednesday.
The experts in the room examined the challenges of delivering financial literacy activities in Fiji, debated the gaps in the curriculum and deliberated on opportunities to strengthen the programs.
A key discussion point was the new opportunities available through digital technologies which have transformed financial services since the advent of the internet in the 1980s.
Keynote remarks were delivered by CCF chief executive officer Seema Shandil, Fiji’s Deputy Prime Minister and Minister for Finance, Professor Biman
Prasad, and the UN Capital Development Fund’s (UNCDF) Lead Specialist (Climate Disaster Risk Financing & Insurance), Krishnan Narasimhan.
Prof Prasad acknowledged the work of the various public, private and development sector organisations delivering financial literacy programs in the region.
The minister called for an integrated and co-ordinated approach to delivering financial literacy programs for a more meaningful and sustainable impact.
“I feel that there is a lack of co-ordination; a lack of a fully integrated national or regional agenda to ensure that there is a sustainable process of financial literacy or education which promotes financial literacy and the understanding of the values and benefits of financial inclusion for good quality of life,” Prof Prasad added.
The discussion also focused on the need for an enabling policy environment that does not hinder basic financial inclusion processes, such as opening a bank account.
Another major challenge highlighted during the discussions was the lack of access to financial services in remote parts of the Pacific. Delivering financial literacy programs in places without access to basic services becomes a rather moot proposition.
Mr Narasimhan, who also leads UNCDF’s Pacific Insurance and Climate Adaptation Programme (PICAP), said more investment in digital financial services could help solve the challenge of geography and reduce reliance on ‘brick and mortar’ structures.
He cited the example of insurance claims being paid to climate-vulnerable and remote communities in Fiji through mobile money wallets or directly to bank accounts under the marketbased parametric scheme development by PICAP.
This, he said, served a dual purpose: Not only are people able to access financial services digitally, they are also learning about insurance and how to save, budget and invest for a rainy day.
“Digital technologies have bridged the gap between financial access and usage, and that is show in the actual percentage: between 2015 and now, a big 20 per cent leap in access and usage of financial services happened, all thanks to digital technologies,” Mr Narasimhan added.
The move towards digital is timely given the impetus generated during the COVID-19 pandemic, according to Consumer Council’s Ms Shandil.
The Fijian government disbursed $F432 million in unemployment support to counter job losses and a declining economy during the pandemic using mobile money wallets – Vodafone’s M-PAiSA and Digicel’s MyCash. Mobile wallets also enabled an increase in inward remittances to the country that helped cushion the damage from loss of tourism revenue.
While the digital revolution has brought with it new opportunities and innovations, Ms Shandil is urging a more considered and factbased approach through a National Consumer Financial Literacy Measurement survey.
She said the findings will provide information on different age cohorts, demographics, and geographical locations for targeted policymaking and programming that leads to a more financially aware and confident population.
■ Sheldon Chanel is the communications officer (Regional) at the United Nations Development Programme Pacific Office in Fiji