Sada Reddy: Financial literacy for all
Speech by Mr Sada Reddy, Governor of the Reserve Bank of Fiji, at the Launch of the 2010
Green Ribbon Campaign, Suva, 19 August 2010.
* * *
Chairman and Members of the Financial Literacy Working Group, distinguished guests,
ladies and gentlemen.
Introductory remarks
A very warm welcome to you all. I am delighted to be here today to officially launch the
Green Ribbon Campaign, a partnership of the public, private sector and non government
agencies to raise awareness and promote financial literacy for all.
Today marks the beginning of a week of awareness on the benefits and need to promote
financial literacy for all. Financial literacy, ladies and gentlemen, has been recognized as an
important skill that helps individuals to participate in a modern economy, as it enables one to
confidently manage and make informed decisions relating to their personal finances.
Financial literacy is an empowering skill that is needed throughout life, from childhood
through to retirement. Where ever people are, whether they live in an urban or rural area,
they will be faced with different types of financial decisions throughout their lives - whether
it's balancing their income with day to day living expenses, managing borrowings for major
purchases such as a house or planning ahead to meet needs or unforeseen risks.
It is therefore not at all surprising to learn, that so many countries have put into place
strategic policies, to ensure that financial literacy is available to all citizens. Here in the
Pacific the importance of financial literacy has been recognized at the regional level by
Pacific Education Ministers and Finance Ministers in 2009. At their October meeting, Finance
and Economic Ministers agreed that each Pacific island nation, through combined actions of
the public and private sectors, achieve the following goals by 2020:

all children to receive financial education through core curricula;

all adults to have access to financial education;
 simple and transparent consumer protection to be in place; and

halve the number of households without access to basic financial services.
What has been done to promote financial literacy in Fiji?
I am very happy to say the Reserve Bank has taken on a lead role in this area. We have
taken a different approach in that the Reserve Bank has taken the initiative to support
Government in setting up the Financial Literacy Working Group comprising private, public
sector and non government agencies working with the National Financial Inclusion Taskforce
(NFIT).
NFIT was established in February this year to promote greater financial inclusion in Fiji. This
Green Ribbon campaign being launched today is the initiative of the Financial Literacy
Working Group of NFIT.
The Financial Literacy Working Group has identified three key areas as their task plan that
they will work on this year. These are;
1. Develop a national strategy - this would require a stock take and assessment of
current financial literacy programs and to carryout a national financial literacy survey
and to use the results to formulate Fiji's first financial literacy strategy
2.
Develop and implement a financial education curriculum to be offered in all
schools
3. Develop financial competencies at household levels
Considerable work has already been undertaken in these areas by the Working Group and
you will be pleased to note the progress achieved to date.
On teaching financial literacy to school children: The Pacific Financial Inclusion Program
(PFIP) engaged a team of consultants from the New Zealand Young Enterprise Trust to
develop an implementation strategy in April 2010. The strategy, which will see teaching of
financial literacy from class 1 to Form 7, has been endorsed by the Minister of Education and
the NFIT. We are confident that by 2012 onwards all our children that pass through the
national school education system will have attained some fundamental competencies that
will assist them in making informed financial decisions that positively impact on the
management of personal and household's finances.
Household and adult financial competencies
Whilst it is all very well and good to teach our children about better management and
understanding of their personal finances, it cannot be very effective unless these lessons that
are taught at schools are also being supported and practiced in their home environment. This
brings us to the importance of adult financial education. Financial issues are constantly
changing reflecting the modern society that we live in.
Today more than ever before people are being faced with financial decisions earlier in their
life. The availability of easy credit and the pervasive power of advertising expose consumers
to so many choices and challenges. Consumers need to weigh up and carefully consider
these choices, as all too easily uninformed decisions can lead to too much debt that can
spiral into a crisis. It also does not help when consumers find it difficult to assess and
compare costs of financial products or services because of lack of information and technical
jargons and terms that are too complicated or intimidating to understand.
Financial literacy is, therefore, a protection mechanism that Governments can employ to
empower and assist consumers to make informed choices and decisions. When consumers
are better informed they are in a better position to save money, plan ahead and to some
extent avert financial crises. There are also many benefits when consumers shop around,
they are able to drive competition and help in the most efficient allocation of capital that will
help develop greater productivity of resources and contribute to growth in our economy.
Develop a national financial literacy strategy for Fiji?
The importance of financial literacy to our nation cannot be underestimated, particularly when
it supports and promotes a range of Government economic and social policies such as
financial inclusion. In this regard I am pleased to announce that work has already begun on
formulating a National Financial Literacy Strategy for Fiji. A consultant is working with the
Pacific Financial Inclusion Program to conduct a Financial Competency Survey. The Survey
is expected to be carried out in the first quarter of 2011 and will determine the level of
financial competency of low income households and the results will assist the Financial
Literacy Working Group to form the basis of a medium term strategic plan to strengthen
financial literacy in the country.
We are aware and commend the different organizations out there that are already conducting
financial literacy programs for their target clients. We would like to see more programs made
available to the different age groups and sectors of our communities. For example there is a
lack of awareness on retirement planning and this will need to be addressed as the Fiji
National Provident Fund has announced major policy changes relating to workers retirement
fund.
Concluding remarks
Let me wrap up by informing you ladies and gentlemen, that Fiji, like any other developing
country, is currently reviewing and reforming its financial sector to make it a locomotive for
growth and development.
The National Financial Inclusion Taskforce shares Government's vision to have more of our
people in the informal sector to move into the formal sector so that they can all actively
contribute to economic activity that will create employment and prosperity for all our people.
It is through initiatives such as improved financial literacy that will enable our people to make
informed decisions, plan and work towards improving their livelihoods.
However, the task of imparting financial knowledge and competency will require the support
of all stakeholders in the private, public and NGO's. We have taken the right approach in
establishing the National Financial Inclusion Taskforce and its supporting Working Groups.
The challenge is ensuring that information is available in an easy to understand language
and is accessible to those who need it so that we will realize the goal of developing a
financially literate society.
We can all contribute to financial literacy this week by encouraging our families, friends and
colleagues to join us in learning and talking about financial literacy within their different
groups.
Ladies and Gentlemen, a nation - whose people save, spend and invest wisely is a robust
and resilient one.
With these words, I now declare the Green Ribbon Campaign week open and wish you great
success.
Thank you.