we are to promote sustainable development and economic
growth in T&T, we need to develop our human resources.
It is with this in mind that the Government asked the
Central Bank to spearhead the National Financial
Literacy Programme (NFLP). It was launched by the bank
on January 31, 2007.
On January 22, the bank marked the first anniversary of
this initiative. At this event the results of the National
Financial Literacy Survey conducted in 2007 were released
and NFLPs plans for 2008/2009 were outlined. The
speech delivered by Ewart Williams, governor of the Central
Bank, and the full results of the survey can be accessed
on the banks Web site: www.central-bank.org.tt.
NFLPs vision is to produce better informed,
educated and more financially aware citizens with the
skills and knowledge they need to make sensible decisions
about their money. Empowered citizens can: take responsibility
for their financial affairs, make ends meet and avoid
unnecessary personal debt; and make provisions for a rainy
day and retirement.
As Mr Williams stated: When the programme was launched,
we emphasised that financial literacy should be the business
of the entire society
We have been able to sign some
150 volunteers, many from the financial sector but other
interested persons from all walks of life.
Elizabeth Austin, project manager of NFLP, reported that
individuals and organisations have volunteered their services
by participating at the levels of the management committee
(chaired by Mr Williams and including representatives
from various key stakeholders), the sector committees
(students and young adults; employees in the workplace;
new and prospective homeowners; small and micro enterprises;
and communities), working groups, and volunteer facilitators.
Mr Williams outlined some of the interventions made
under the NFLP:
n Financial education classes were held in 140 primary
schools and, in a pilot project, in 28 secondary schools.
n Seventy-five workplace lunch and learn sessions
were held. These were sponsored by employers but with
instructors and material provided by the NFLP.
n NFLP accepted invitations from several trade unions
to conduct financial management seminars for employees
in receipt of backpay or other lumpsum payments.
n NFLP made several interventions at the community level,
mostly in rural areas.
n NFLP has used the print and electronic media and other
publications to disseminate basic financial information
that could be useful to consumers of financial services.
Mrs Austin rightly pointed out that the nature of
the NFLP is such that success or failure cannot be measured
in quantifiable terms in the short-run. The programme
initially necessitates changing a mind-set
will require our persistence and our patience.
While expressing pleasure in the auspicious start
that NFLP has made, Mr Williams recognised that this
is going to be a long journey. He threw out the
challenge to the entire community to get on the
national financial literacy bandwagon. He listed
some of the ways in which this can be done:
n Get your employers to sponsor lunch-and-learn
sessions in the workplace.
n Volunteer to organise and provide financial literacy
classes to your community groups, groups within your faith
community, and your social clubs.
n Teach your kids good financial habits and seek
to get financial literacy as part of the school curriculum.
CB is also seeking to encourage sixth-form students to
join the programme to provide instructions to their
peers and to other students.
The results of the baseline national literacy survey,
which was initiated to give NFLP a general idea
of the current level of financial literacy in the country,
are worth studying. The survey, which was conducted between
July and August 2007, involved approximately 1,000 households
and covered several areas including: money management,
spending and savings habits, financial vulnerability,
planning ahead, crisis management, use of financial products,
insurance protection, and retirement planning.
n Gender of respondents: 42 per cent were male and 58
per cent were female.
n Marital status of respondents: 47 per cent married/common
law relationships, 35 per cent single, ten per cent widowed,
four per cent divorced, four per cent separated.
n Age distribution of respondents: 16-19: nine per cent;
20-24: nine per cent; 25-34: 16 per cent; 35-44: 19 per
cent; 45-54: 15 per cent; 55-60: seven per cent; 61+:
25 per cent.
n Occupation of respondents: six per cent students, 33
per cent employed full-time, 14 per cent employed part-time,
18 per cent housewives, 16 per cent retired, nine per
cent unemployed, one per cent on-job training programme,
two per cent disabled.
Type of employment of respondents: 76 per cent were employees,
23 per cent were self-employed, one per cent not stated.
The following are some of the findings:
n Twenty-three per cent of the sample respondents, females,
were less likely to make ends meet (23 per cent vs 18
per cent males).
n Those who are separated (32 per cent) have the highest
incidence of difficulty making ends meet.
n Based on the sample, the ability to make ends meet is
directly related to education: 12 per cent of those with
tertiary education have difficulty in making ends meet;
compared with 39 per cent of those with technical vocational/apprenticeship.
n Only 25 per cent set aside funds specifically for unanticipated
expenses, eg job loss, illness.
n However, 78 per cent plan ahead for lumpy
payments, eg water rates, land tax etc.
n Nine per cent dont plan ahead.
n Forty-two per cent run out of money before the end of
the week or month at least sometimes.
n Twenty-one per cent have no bank account.
n Fifty-six per cent have no protection against their
person or property.
n One in three (33 per cent) people over the age of 60
continues to work because they need additional income.
n Fifty-four per cent of retirees do not have an occupational
or personal pension. The main reason for not doing so
was lack of money.
n Almost half of retirees (45 per cent) report that their
current household income was insufficient to give them
the standard of living they hoped to have in their retirement.
n Sixty-nine per cent are relying on government pensions
(NIS/old age) for their retirement income.
As Mr Williams said, the surveys results will also
help NFLP to make more targeted interventions
as the programme moves forward. NFLP also plans to
conduct follow-up surveys to track the progress being
made under the programme.
If we are to move forward as a people, its essential
that we all become financially literate. Contact the NFLP
secretariat at 625-2601, ext 2815 for further information.
n Leela Ramdeen is a lawyer
and education consultant