11.01.2012
Belarus’ financial literacy programs should be inclusive
MINSK, 11 January (BelTA) – Financial literacy programs in Belarus should be meant for all groups of people, BelTA learnt from Aide to the Chairman of the Association of Belarusian Banks (ABB) Olga Kupchinova. A committee set up by the association at the end of last year is designed to promote the national financial literacy system.
Specialists believe that financial literacy programs should be introduced at all levels. Banks, first of all, would like to see a better financial education of their customers.
“People should understand banking basics, the things that determine the cost of bank resources and the loan interest rates, because financial illiteracy, sketchy reading of documents and reckless decision-making can result in a heavy burden one cannot handle”, Olga Kupchinova said.
At the same time, bank commercials and ads should be transparent and unambiguous. For example, while taking a loan, a customer should be fully informed about interest rates taking into consideration additional charges related to loan service (fees, additional payments, etc) to be able to weigh all pros and cons and objectively evaluate his ability to fulfill obligations. “It is important to help a customer objectively assess his financial capacities and correctly articulate his needs while applying for a loan,” Olga Kupchinova said. In her words, it is in the best interests of banks to deal with better educated customers, because this will help minimize banking risks.
She informed that the committee is now working on a financial literacy strategy. In December it held its first meeting to discuss areas of work. One of the areas is the study of best practices of foreign financial institutions, including banks, to enhance financial literacy of people. Russia and Kazakhstan, for example, launched such programs several years ago.
The second area of work of the committee is the formation of a legal framework. At present, there are no legal acts in Belarus regulating financial literacy. The committee will come up with the most optimal amendments to the existing legislation, amendments and addenda to existing documents, and will develop new regulations.
The committee will also investigate complaints and settle disputes between banks and their customers. However, the format of the work has not been finalized yet, Olga Kupchinova said. A financial ombudsman will be established by the association to resolve disputes. The fourth area of work is establishing close cooperation with mass media in order to deliver useful information to the public.
The committee consists of representatives of over 20 banks of Belarus, and Deputy Chairman of the Board of the National Bank of Belarus Sergei Dubkov. The committee is structured into four groups. At present the ABB is studying proposals of banks to create the national system of financial literacy. After the proposals are analyzed, the committee will hold a session to elect its head and develop an action plan. The first working session of the committee will be held in February or later.
Financial literacy includes knowledge and practical money skills aimed at efficient personal finances management, income and expenditure records, short-term and long-term financial planning, understanding various financial products and services, keeping track of the situation on the financial market, and making the right financial decisions.
Specialists believe that financial literacy programs should be introduced at all levels. Banks, first of all, would like to see a better financial education of their customers.
“People should understand banking basics, the things that determine the cost of bank resources and the loan interest rates, because financial illiteracy, sketchy reading of documents and reckless decision-making can result in a heavy burden one cannot handle”, Olga Kupchinova said.
At the same time, bank commercials and ads should be transparent and unambiguous. For example, while taking a loan, a customer should be fully informed about interest rates taking into consideration additional charges related to loan service (fees, additional payments, etc) to be able to weigh all pros and cons and objectively evaluate his ability to fulfill obligations. “It is important to help a customer objectively assess his financial capacities and correctly articulate his needs while applying for a loan,” Olga Kupchinova said. In her words, it is in the best interests of banks to deal with better educated customers, because this will help minimize banking risks.
She informed that the committee is now working on a financial literacy strategy. In December it held its first meeting to discuss areas of work. One of the areas is the study of best practices of foreign financial institutions, including banks, to enhance financial literacy of people. Russia and Kazakhstan, for example, launched such programs several years ago.
The second area of work of the committee is the formation of a legal framework. At present, there are no legal acts in Belarus regulating financial literacy. The committee will come up with the most optimal amendments to the existing legislation, amendments and addenda to existing documents, and will develop new regulations.
The committee will also investigate complaints and settle disputes between banks and their customers. However, the format of the work has not been finalized yet, Olga Kupchinova said. A financial ombudsman will be established by the association to resolve disputes. The fourth area of work is establishing close cooperation with mass media in order to deliver useful information to the public.
The committee consists of representatives of over 20 banks of Belarus, and Deputy Chairman of the Board of the National Bank of Belarus Sergei Dubkov. The committee is structured into four groups. At present the ABB is studying proposals of banks to create the national system of financial literacy. After the proposals are analyzed, the committee will hold a session to elect its head and develop an action plan. The first working session of the committee will be held in February or later.
Financial literacy includes knowledge and practical money skills aimed at efficient personal finances management, income and expenditure records, short-term and long-term financial planning, understanding various financial products and services, keeping track of the situation on the financial market, and making the right financial decisions.