Financial literacy and education are frequently viewed as the keys to financial inclusion, but they are still very few among children under the age of 18, according to Financial Industry Collective Outreach ( FINCO ) CEO Clare Walker.
Children were typically given financial advice from their families, more often than not. Additionally, they take lessons from financial education courses offered in public universities. However, these rarely occur in public universities because they do not provide a platform for professional advancement.
Students may not always get a job because they have good financial education, the teacher should understand. This is why, according to her, profession programs were given priority over them.
This is where FINCO and the NSFL (National Strategy for Financial Education) come into play.
The Bank Negara Malaysia (BNM) established FINCO as a non-profit organization in 2017 in partnership with other financial institutions to implement positive educational initiatives for underprivileged children and youth, while NSFL is a five-year plan to increase the nation’s low levels of financial literacy that was launched in 2019.
Raising the bar for financial education is becoming increasingly important to the country as the rapid development of technology makes it easier for people to invest their money than ever before and also contributes to the spread of scams. When equipped with economic knowledge, one is less likely to fall prey to unscrupulous swindlers.
Datuk Seri Ahmad Maslan, the then deputy finance secretary, urged last year that financial literacy programs be implemented in schools, particularly at the intermediate level, to stop students from falling for scams. However, putting these programs in institutions takes a lot of time, and it’s not something that can be done immediately.
The latest curriculum has a lot of time. Financial education that is embedded in existing subjects or through education activities is much simpler than introducing a new area.
There might be a greater emphasis on financial knowledge and innovation under the fresh curriculum that will be introduced in 2027. According to Walker, this would finally make learning about financial matters more accessible.
According to a study conducted by FINCO, children are not financially educated.
According to Walker, there are a lot of statistics about Malaysian adults and youth who are financially literate, but there isn’t much local data on those who are under 18 years old. In order to determine the numbers, FINCO conducted studies in secondary schools.
A sample of 1, 121 lower secondary students from across the country, both rural and urban, were asked to complete the survey online and offline questionnaires, which included data from B40 communities.
The results indicate that the majority of secondary school students have little or no monetary information. The majority of them are aware of compound interest principles (78%) and can use price comparison when making a purchase (67%).
Only 40% of investors are aware that investments have varying risk levels, 39% can relate the impact of inflation to their own purchasing power, and 37 % are aware of how insurance premiums operate.
They don’t have good financial habits and don’t behave in a healthy way. Despite the fact that 95% of students said they had saved for long-term financial goals, 18.8% of students said they had not saved any money in the last 12 months.
Individuals who are younger than 18 years old also have views that suggest they value short-term gains over long-term planning. The majority of them are interested in learning more about funding, but they find it to be difficult.
In addition, the survey also finds that “gender and parents’ qualification (used as an indicator of income) do not appear to play a significant role” in financial literacy levels. The marks generally increase with age and intellectual standing, but this may not always be the case for students with low levels of financial literacy.
The survey’s 1,121 individuals included 49 who have shared bank account details with close friends, while 42 who have shared bank account details with outsiders in exchange for money are worrying.
The review concludes that children under the age of 18 should have access to information on money. After graduating from school and entering the workforce, they will have this information with them as they get older and develop a better knowledge of finances.
According to the report, “This may go some way to reducing some of the problems around debts, which are common amongst Indonesian youth.” 47 % of Malay children have higher credit card debt, according to BNM.
Additionally, the report notes that small achievers require targeted assistance because students who are achieving lower grades in a number of topics also have lower levels of financial literacy.
Walker points out that while economical education should be accessible to all students, they run the risk of maintaining lower levels of financial education as they get older.
Walker points out that parents’ associations have a significant impact on encouraging the development of sound financial habits in their children. There is a chance that you won’t develop good financial habits if you don’t have good role models at home. How do kids learn in real life if parents don’t have bank accounts or use credit cards?
Overcoming obstacles
As part of the answer, Walker and the FINCO team developed financial education and outreach programs as part of the family’s cross-curricular activities in a few schools across the nation.
The program’s goal is to help primary school students establish their social sector using what they have learned in Good SENS. Walker points out that this is usually done after school and during extracurricular pursuits.
“We needed to apply black and white lessons learned by people not just by babies; we also needed to put them into practice. It’s similar to learning to drive a vehicle theoretically without actually operating it. We wanted to use enterprise as a platform for students to practice and learn together,” she continues.
Through Great SENS, students are able to identify and apply fundamental fiscal principles while constantly addressing pressing economic issues as they create and run social enterprises to showcase in the National Dragons ‘ Den, a program where young entrepreneurs pitch their ideas and concepts to businesses or funders.
The display was held by 89 primary school teams last year, who made roughly RM75, 000 altogether from their succeed, and who had to donate 50% of their money reward to a social trigger.
For example, one of the winning team from Sekolah Kebangsaan Taman Sea, Selangor, sold environmentally friendly goods made by the Mah Meri racial group, which provides people with career options. Additionally, the proceeds from the sale went toward supporting the local children’s education finance.
Walker information that it is a “win-win” condition because students may expand their business ideas, become more innovative, and even make donations to social causes.
Children in the secondary school class, who are much older, have the option to attend the Ringgit Rules studio.
For instance, the programs teach basic economy, such as how compound interest operates, and how to handle bills and investments. In addition, the program gives students the option to make their own economic decisions before they leave college.
“In addition, plan would be an indication. I’m pretty sure many people had trouble deciding between the numerous coverage options and prices. And it can become a minor challenging when you’re not sure what to do or who to contact,” says Walker.
Through the Ringgit Rules factory, FINCO works with healthcare organizations like the Life Insurance Association of Malaysia and General Insurance of Association Malaysia to teach kids about the value of coverage, what types of inquiries to ask, and the various items these organizations provide.
It’s extremely important to act on financial literacy, she adds, “more than really acknowledging the importance of acknowledging the importance of it.”
Before taking over as FINCO’s CEO, Walker was appointed to lead British Council Malaysia’s Education and Society division. He likewise taught English to both young and old.
Walker organized the design and implementation of a number of large-scale initiatives to encourage the translation of research findings into poverty alleviation initiatives by bringing along money, collaborators, and experience.