Technology continues to revolutionise the financial services landscape. From mobile payments, app based investing platforms, financial technology has revolutionised not only how consumers receive financial services but also how they expect to receive such services. Core financial institutions are expected to be radically reconfigured as a result of technological innovations. Financial education is therefore an important cog for promoting financial technology.
Financial education refers to the process of building knowledge, skills and attitudes to become financially literate. It is meant to inculcate people on good money management practices with respect to earning, spending, saving, borrowing, and investing. Financial education is meant to enable people to shift from reactive to proactive decision-making and work towards fulfilling their financial goals. By broadening people’s understanding of financial options and principles, financial education builds skills to use financial products and services, and promotes attitudes and behaviours that support more effective use of financial resources.
It is crucial that financial literacy be introduced at almost all levels. The curricula for financial education should include components to help students develop an understanding of the appropriate skills relating to the roles of money, credit, budgets, financial planning and other relevant personal finance topics in order to permit them to understand and appropriately manage their finances.
Financial literacy enables citizens of all ages and economic positions to remain in touch with changes in financial needs and circumstances, and to take advantage of products and services that best meet their goals. The increasing complexity of our financial system makes it clear that strengthening the financial knowledge and skills of the people is critical for the future success and financial stability. Financial literacy is important in the life journey of everyone, from primary school, secondary school, tertiary level and for the employed or unemployed. It allows one to make thoughtful informed decisions concerning their finances.
There is need for continued efforts by all stakeholders to invest significantly in bridging the financial literacy gap in our society by providing financial literacy programmes particularly to specific population subgroups, such as ethnic and gender minorities, require custom-tailored approaches.
Once financial literacy is created it will in time be channeled via financial intermediaries and financial markets and transformed into investments in the private sector and public through loans to companies and capital market investments. If more citizens choose to save through formal mechanisms more capital will be made available to increase the productive capacity of the economy.
Governments, municipalities and corporates can issue retail securities aimed at enhancing financial inclusion and a saving and investment culture to promote economic development. Throughout Africa corporates and governments are issuing retail securities to promote participation of retail and other small scale investors in savings and investments.
Financial institutions need to make strides to improve financial inclusion by availing products that are retail investor oriented to target the once secluded sections of the economy. There is need for continued efforts by all stakeholders to invest significantly in bridging the financial literacy gap in our society by providing financial literacy programmes particularly to primary and secondary school children, university and college students and other special interest groups such as youths and women.
The increasing complexity of our financial system makes it clear that strengthening the financial knowledge and skills of the people is critical for the future success and financial stability of our country. Financial literacy is important in the life journey of everyone, be they in primary school, secondary school, tertiary level, whether employed or unemployed. Financial literacy is more about making thoughtful and informed decisions about one’s finances.