Why financial literacy?
When the Treasury reports that the per capita income is for example 100,000 this is just an economic mathematics figure because if your pocket is less than that or nothing at all you will remain like that you will not walk into the treasury building demanding for you reported income and the one with that income or more will also enjoy it…now economics basically tries to obey the canon of equity but in reality the disparity is clear.
This is just one of the many scenarios in money matters that we hear about day in day out but have no clear and simple understanding of.
Per capita income is just one of the many factors that influence both a country’s level of financial inclusion and financial development alongside good governance, the quality of institutions, availability of information, and the regulatory environment.
Years back only 25% of Kenyans were financially literate now 75% are not only financially literate but can access financial services this is a drastic improvement in the financial industry.Most Kenyans can access financial information, but just how well are we informed.When you go to the bank and you make a transaction error or request for extra banking and financial services do you know if they are actually your right as a consumer ?or in your criteria of choosing which bank to bank with what do you consider?does your bank offer after sales services like monthly statements or low transaction costs or have a wide coverage nationwide.All these factors are vital to any consumer in banking and finance.
Recently the government passed a finance bill that has greatly impacted the finance industry and the same bill is passed for citizens who don’t even bother to understand it.Most of the consumers actually don’t know to what rate the interest has dropped to or if the bank they are in took the effort to inform their consumers of the major changes and are they literate enough to understand the changes.
Well, all these questions again trickle down to the stakeholders, industry players and most importantly the consumer.
To the stakeholders, the government needs to ensure financial education is inculcated in the education system and syllabus so that from a young age we are able to have just the basic fundamental financial skills and know-how.Financial education needs to become a part of our national curriculum and scoring systems so that it’s not just the rich kids that learn about money… it’s all of us.
The key industry players on the hand need well and relatable customer care personnel who are able to explain to customers clearly on the banking products features and their after-sales services.The industry should be informed by “Achieving the Sustainable Development Goals: The Role of Financial Inclusion,” in their decision-making in favor of the consumers’ interest.
As a consumer what intentional actions are you taking to improve your financial literacy?Well, this financially informed journey starts with you having the interest in what is happening in your financial institution of choice and industry…be curious, be eager to learn and follow bloggers like me who are willing to you through this journey; information is power.
David Bach says that any informed borrower is simply less vulnerable to fraud and abuse.
Be that informed borrower !