THE Standard and Poor’s Ratings Services Global Financial Literacy Survey shows that only 26 per cent of adults are financially literate in Pakistan. This is an alarming situation for a country with more than 63pc of its population below 30 years of age.
Since majority of our population comprises youth, we need to start teaching them young because schools are where leaders of tomorrow are created. If financial literacy is made part of the curriculum, we can pull our country out of extreme poverty by teaching the next generation about making the right financial choices.
The National Curriculum Council (NCC) has an advisory role with regard to provincial governments, and it can make suggestions regarding the introduction of new courses, such as financial literacy, to be taught in the provinces. After the 18th amendment, actual authority rests with provincial governments, and they can take their own initiatives in this regard.
There are five major components that students need to be taught when it comes to financial literacy: earning, spending, saving, borrowing and protecting. There have been a few notable initiatives, such as those by the Pakistan Poverty Alleviation Fund (PPAF), the Institute of Financial Markets in Pakistan (IFMP), the Fair Market Pakistan (FMP) and the Association of Chartered Certified Accountants (ACCA), the National Finance Literacy Programme for Youth (NFLP-Y) introduced by the State Bank of Pakistan (SBP) and the financial literacy initiatives by microfinance providers (MFPs) for their employees and clients.
However, there are a few problems with these programmes. The NFLP-Y programme, for instance, targets three age groups; schoolgoing children aged 9-12 years; adolescents aged 13-17 years; and youth aged 18-29 years. This it does across 45 districts of the country, including Gilgit-Baltistan (GB) and Azad Jammu and Kashmir (AJK). The divide has made it too complex.
The age bracket of 9-12 years should be removed as this is a weighty topic and cannot be understood at that age. Furthermore, there should be an emphasis on savings as Pakistan’s domestic savings rate is meagre. The game on financial literacy PomPak is outdated, and should be adapted to modern times. There should be more quests and a more interactive user interface.
The idea of a financial literacy game is excellent, and will captivate the young if the game is tweaked up a little.
Moreover, the problem with the MFPs’ programme is the course content and the target audience which is limited to their clients and employees. They used to talk about the importance of savings, but there was no mention of accessing financial services.
Just as there are compulsory subjects, like English, Mathematics, Science, Urdu and Pakistan Studies, in schools, the boards of intermediate and secondary education should also introduce a financial literacy course and make it compulsory for Matric/Intermediate students.
An easy way to increase financial inclusion is to raise awareness. Sweden, having the highest literacy rate in the world, has activities, such as the national money quiz in secondary schools. The government should incentivise the students. There should be scholarships for those who want to pursue finance or economics at the undergraduate level as part of the financial literacy programme.
Lastly, every Pakistani should contribute to this initiative. Together, we can make a more financially literate and inclusive Pakistan for a better future for one and all.
Balaaj Khan Niazi, Muhammad Bin Aamir & Wardah Noor
Published in Dawn, December 2nd, 2022