Financial awareness tops agenda

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Rath: Financial education key for money management. Photo supplied

In conjunction with the Financial Literacy Event, H.E Rath Sovannorak, Assistant Governor and Director General of Banking Supervision of the National Bank of Cambodia (NBC) told The Post the central bank’s plans to create a financially literate society to keep in pace with the nation’s fast-changing financial market.

What is the main objective of NBC to host the Financial Literacy Event on Tuesday?

Our aim is to educate the public, government and the banking industry about the benefits of financial literacy. In addition, we also want to inform the public about our long-term plans, particularly our plans to infuse financial literacy into the national education programmes with the Ministry of Education, Youth and Sport.

This is part of the collective efforts from both public and private sector to increase the financial literacy levels in Cambodia and protect consumers, given the rapid development of technology and innovation in financial products and services.

Is promoting financial education an important policy agenda of the NBC? Could you also please explain the importance of financial education?

The government adopted the Financial Sector Development Strategy 2016-2025 as a roadmap to develop the financial sector. This strategy has provided many initiatives for banking and financial sector to play a role in the economic development. And, the strengthening of financial inclusion and enhancing of financial literacy has been set as the priority agendas.

Financial literacy is about educating people to use financial services and products effectively, efficiently and profitably. This in turn will increase their living standards and making their lives better. Studies have shown that people with financial knowledge will be able to make better financial decision than those who lack of that knowledge.

What is the message that the NBC is trying to convey at the event and who are your main target audience?

Financial literacy plays an important role in making people’s life better, contributes to the socio-economic development and helps poverty eradication efforts.

Therefore, our main message today : “Given the need for enhancing financial literacy, it is important for all stakeholders, both the government agencies, the private sector and development partners to come up with a concerted effort, involving human and financial innovations, to benefit Cambodians.”

Our main target audience is the Cambodian youth who we believe will be the main factor in our country’s development. We also believe that the youth will be able to convey the financial knowledge acquired to their relatives, friends and peer groups.

Does the NBC’s financial education programme help improve financial literacy among the people?

Enhancing financial literacy has been set as a priority agenda for the NBC.

So far, the NBC has conducted many financial awareness programmes for the public, rural people, students, local authorities etc. From this initiatives, we observed that there is an increasing trust in the banking sector and people have changed their habits like from keeping money in their homes to making deposits at formal financial institutions.

In addition, people might be able better utilise their loans. Interestingly, more people are using money transfers and payment services from our banks and financial institutions.

Ballooning debts has become a pressing issue even in developing countries and continues to worry policy-makers and governments. How is the NBC addressing this issue in the Kingdom?

It is true that ballooning debt is always a topic of concern but it is not the case for Cambodia right now. The reasons being:

i) the NBC has issued a prakas on interest rate calculation where banks and financial institutions are now not allowed to charge interest rate on the total amount, but on the outstanding amount.

ii) the NBC issued another prakas on the Credit Bureau where banks and financial Institutions are required to put all the financial consumer information into the Credit Bureau of Cambodia and also check all the information of a consumer before providing loans.

iii) The Association of Banks in Cambodia and Cambodia Microfinance Association have established their joint lending guidelines where all the members agree to provide loans with responsibility and ethics.

iv) the NBC continuously organizes public awareness campaigns on this issue in all provinces as well.

The NBC introduced various financial education programmes, for example, the “Let’s Talk Money” and introduced a hotline to hear public grouses. How effective are all these projects?

The NBC has conducted many financial awareness programmes. One of them is the “Let’s Talk Money” where our team created comic books, video clips, a Facebook page, and an application called NBC-Edu. Our main audiences are youth and children,

and we achieved tremendous results. Moreover, our team continues to visit primary school children to provide them with these materials to educate them.

The NBC has acknowledged that consumers, when faced with problems or are unclear about certain financial matters, do not know where to seek help and that is the reason the NBC established hotlines (five lines at the head office and one line in each of the NBC’s provincial branches) to assist financial consumers.

After launching these hotlines, our team received many complaints and inquiries, especially from rural areas.

How will a financial savvy society help the economy? Can it improve competition, market efficiency and help in poverty eradication?

Definitely, financial literacy will help consumers manage their finances better, make their lives better and more comfortable, help them to participate in social activities and eventually help them out of the poverty trap. Consumers are also better able to select financial services and products that suit their needs and abilities.

Financial providers need to provide services with better quality, that are more competitive, more efficient and convenient in order to retain customers.

Will learning about money management help in promoting financial inclusion in the Kingdom?

Financial literacy is about the ability to make the right financial decision. This might include the management of money, the right use of loans, counseling and so on. As long as consumers have sound financial knowledge and abilities, they definitely will be able to get benefits from financial services and this eventually will encourage them to access other financial services as well.

According to studies, Cambodia’s financial literacy level remains at 18 per cent, much lower compared than its Asean peers. What measures are being taken by the NBC to address this critical issue?

We have taken a slew of measure such as promoting more financial awareness programmes, introduced effective consumer protection mechanisms , more legal enforcement and supervision by NBC over banks and financial institutions. There is a continuing partnership between the NBC and all the stakeholders and there continuous efforts to strengthen the capacity building of NBC’s officials.

What are the main challenges confronting NBC in promoting financial education across the country?

Some of the challenges are resources constraints including human, knowledge and financial aspects. Therefore, a concerted effort is needed from all stakeholders. In addition, one of the main objectives of today’s programme is to call for coordination and collaboration from all stakeholders to work together to enhance financial literacy.

Is the NBC carrying out specially designed women’s financial literacy programmes?

NBC has conducted financial literacy programmes for the public at large, meaning for both male and female. But, we actually have our objectives to make women more financially inclusive.

The NBC is collaborating with Ministry of Women’s Affairs to promote financial education.and we achieved tremendous results.

Moreover, our team continues to visit primary school children to provide them with these materials to educate them.

The NBC has acknowledged that consumers, when faced with problems or are unclear about certain financial matters, do not know where to seek help and that is the reason the NBC established hotlines (five lines at the head office and one line in each of the NBC’s provincial branches) to assist financial consumers. After launching these hotlines, our team received many complaints and inquiries, especially from rural areas.

How will a financial savvy society help the economy? Can it improve competition, market efficiency and help in poverty eradication?

Definitely, financial literacy will help consumers manage their finances better, make their lives better and more comfortable, help them to participate in social activities and eventually help them out of the poverty trap. Consumers are also better able to select financial services and products that suit their needs and abilities.

Financial providers need to provide services with betterquality, that are more competitive, more efficient and convenient in order to retain customers.

Will learning about money management help in promoting financial inclusion in the Kingdom?

Financial literacy is about the ability to make the right financial decision. This might include the management of money, the right use of loans, counseling and so on. As long as consumers have sound financial knowledge and abilities, they definitely will be able to get benefits from financial services and this eventually will encourage them to access other financial services as well.

According to studies, Cambodia’s financial literacy level remains at 18 per cent, much lower compared than its Asean peers. What measures are being taken by the NBC to address this critical issue?

We have taken a slew of measure such as promoting more financial awareness programmes, introduced effective consumer protection mechanisms , more legal enforcement and supervision by NBC over banks and financial institutions. There is a continuing partnership between the NBC and all the stakeholders and there continuous efforts to strengthen the capacity building of NBC’s officials.

What are the main challenges confronting NBC in promoting financial education across the country?

Some of the challenges are resources constraints including human, knowledge and financial aspects. Therefore, a concerted effort is needed from all stakeholders. In addition, one of the main objectives of today’s programme is to call for coordination and collaboration from all stakeholders to work together to enhance financial literacy.

Is the NBC carrying out specially designed women’s financial literacy programmes?

NBC has conducted financial literacy programmes for the public at large, meaning for both male and female. But, we actually have our objectives to make women more financially inclusive. The NBC is collaborating with Ministry of Women’s Affairs to promote financial education.