BOM LAUNCHES FINANCIAL LITERACY CAMPAIGN FOR LONG-TERM DEVELOPMENT

Ulaanbaatar /MONTSAME/ On October 3, BoM launched “Financial Literacy” campaign to run for three months. The administration of Bank of Mongolia (BoM) announced that once the public is informed of their financial services, they will be able to prevent risk, make better financial decisions and adapt household financial management. The central bank is initiating the campaign within the frames of “National Program for Financial Literacy” and will organize training on budget control, savings and investment decisions, taking loans, preventing financial risk, insurance and saving for retirement. We clarified more on the campaign from B.Lkhagvasuren, Deputy Governor of BoM. One mechanism that pulls the economy out of crisis is raising public financial literacy and the bank is focusing on that. The central bank is responsible for deciding monetary policy…why is it prioritizing public financial literacy? By transforming economic policy from consumptive to cumulative, we will be able to prevent risk and overcome difficulties with greater ease. In October 2015, the Bank of Mongolia, in cooperation with the Ministry of Finance, Financial Regulatory Commission, Ministry of Education, Culture, Science and Sports and the World Bank, reached a decision to implement National Program for Financial Literacy 2016-2021. It was because the World Bank’s assessment team conducted an analysis of our financial sector. The team found that the lack of public financial literacy causes economic difficulties in Mongolia. For instance, according to the World Bank’s assessment, a majority of people have access to clear and transparent financial information and basic financial concepts; however, they lack the knowledge to make financial decisions such as long-term financial investments and making savings. As a result, a diagnostic review was released stating that disputes are rising between banks and the public which is caused by a lack of financial literacy. Therefore, in order to create financial stability in the mid to long term and expand the financial market, increasing public financial literacy and education is important. This is why the BoM is implementing the program. Within frames of the program, hand-outs were prepared for youth, elders and SMEs. Furthermore, a subject was added to high-school curricula as an extra subject, Business Studies, which is being taught for about a year now. Once the Ministry of Education, Culture, Science and Sports makes the decision, Business Studies will be taught to twelfth-grade students. In other words, we are aiming to include the subject, which is currently taught as an extra subject, into the high-school curriculum. “Business Studies” was introduced in several schools. What are the results so far? The Minister of Education, Culture, Science and Sports once said “A student, who attended the subject, was asked ‘Are you from a middle income household?’ in which he answered, after calculating the average income of his household that showed the household was able to make savings, “I am from a middle income household”. Taking the fact that the student was able to tell the benefits of making savings proves that the subject is needed.” It shows that the subject has proven useful for children. Even primary and kindergarten school children are saving money in a piggybank. Taking from this, the program is showing results. Are savings accounts increasing in recent years? The BoM has its own financial database. According to its data, savings are constantly increasing in recent years. Also, the number of bank customers has also increased. Mongolia ranks high with its number of bank and bank accounts per 10 thousand people. But we must change from quantity to quality. The most important thing is customers’ satisfaction with the services they are provided. The public perceive banks as the main method for savings and the world is now choosing the practice of raising capital in the financial sector. How are we providing this kind of financial education for the public?” As the public economic and financial literacy increases, people will realize that investing in shares and securities is more profitable than just saving. Also, the fact that the public is limiting their expense and saving revenue is a sign of supporting the economy. What are the expected results after public financial literacy improves? I presume that it will have positive effects by reducing risks of economic difficulties, allowing them to manage their budget, creating opportunities for better decisions and reaching financial freedom. Financial literacy is not a one-time action, but a long-process, so there won’t be any instant results. BoM’s National Program on Financial Literacy was selected the best in Asia and the Pacific. What was the main indicator for the success? The National Program on Financial Literacy was reviewed by the Child & Youth Finance International and selected as the “Regional Champion” in Asia and the Pacific in 2016. I believe that the main factor was adding the extra subject “Business Studies” to the high school curriculum. Most countries that provide financial education use online webpages Websites are simple and entertaining way to teach young people. We implemented our program based on international practices. Also, we met with many experienced foreign teachers and experts to exchange information. The United Kingdom has a website called money advice service. Through the website, people receive helpful financial advice for their daily lives in an entertaining way. On the other hand, the website has to be very simple and entertaining to provide quality information. Providing knowledge through entertainment, such as teaching kids through games and, youngsters and families through numerous financial concepts is considered the best method. Therefore, we have recently launched the htttp://www.sankhuugiinbolovsrol.mn/ website. The National Program on Financial Literacy will not be implemented by the central bank alone. What are the roles of commercial banks in the program? The program is being co-implemented by the Bank of Mongolia, Ministry of Finance, Ministry of Education, Culture, Science and Sports, Financial Regulatory Commission, as well as the Mongolian Banking Association, Savings Insurance Corporation, Mongolian Insurers Association and other NGOs engaged in self finance. B.Tugsbilig