Barry Whiteside: Building financial literacy and financial inclusion in Fiji
Opening address by Mr Barry Whiteside, Governor of the Reserve Bank of Fiji, at the
National Financial Competency Development Workshop, Suva, 5 September 2012.
* * *
Mr. Knut Ostby, United Nations Development Program Resident Representative;
Distinguished Guests;
Ladies and Gentlemen.
Good morning to you all and thank you for taking out time from your busy schedules to be
part of this forum. This Workshop marks another important milestone on our journey towards
building financial literacy and financial inclusion in Fiji.
Over the last few years, the Reserve Bank of Fiji has taken a more proactive and broader
role in promoting and developing financial inclusion in our country. We certainly have not
done this alone. In fact, the key factor contributing towards the progress we have achieved
so far has been the innovation and the effective collaboration by all the stakeholders. This
has been our strength and we hope that this forum will provide further opportunity for
consultation and participation by all of us in formulating a national strategy and action plan
for developing financial competency throughout Fiji. This may be just one part of the whole
financial inclusion exercise, however, it remains a critical part.
I would, at this point, like to take this opportunity to acknowledge the catalytic role and the
tremendous contribution of the Pacific Financial Inclusion Programme (PFIP) our co-host and
strategic partner towards greater financial inclusion. Ladies and Gentlemen, the PFIP has
been involved with the Reserve Bank of Fiji and other development partners for a number of
years. Its timely support and strategic programs have initiated and invigorated many projects
that not only have extended the outreach and the innovation of financial products and
services, but have also contributed to capacity building in Fiji and some of the larger Pacific
islands.
Introduction
Fiji's efforts and achievements in the area of financial inclusion have not gone unnoticed. Our
experiences over the last three years have been shared at global forums as a model of
success, where significant work has been achieved in such a short time and despite the fact
that we are one of the smaller developing economies. I will be further updating the Alliance
for Financial Inclusion annual meeting in South Africa later this month on our progress.
For a number of years policy makers and leaders have recognised that economic
performance and benefits are to be gained from aligning national policies towards greater
financial inclusion. In August 2008, Finance Ministers, Central Bank Governors and Senior
Officials from the Pacific area and Timor-Leste attended a conference in Coombs, near
Sydney, Australia.
Coombs Declaration
The that was issued after the Conference stated,
"...that by lifting levels of financial literacy or financial capability in the region,
economic performance would be improved, with flow on social and financial
benefits for individuals and
families."
The following year in 2009 regional Government leaders and central bank governors met
again and endorsed what is now commonly known as the 2020 Money Pacific Goals.
The four key goals articulate the vision and commitment by the Pacific Island nations to take
a lead action in building financial competency through the combined actions of the public and
private sectors.
They state that:
• all schoolchildren are to receive financial education through core curricula;
•
all adults are to have access to financial education;
• simple and transparent consumer protection policies are to be put in place; and
•
there must be a fifty percent reduction in the number of households without access
to basic financial services.
In November 2009, the Reserve Bank and the Pacific Financial Inclusion Programme
organised a National Microfinance Workshop where financial service providers, mobile
network operators, relevant government agencies, NGO's and donor partners all agreed to
work together to reach 150,000 unbanked clients by 2014. One of the key outcomes of that
workshop was the formation of a National Financial Inclusion Taskforce (NFIT) to set the
agenda, coordinate, monitor and supervise the implementation and progress of a medium
term strategy for financial inclusion in Fiji.
The Financial Literacy Working Group was one of three working groups set up under the
Taskforce and was mandated to look into and develop strategies to strengthen and build
financial literacy. In its first meeting in 2010 this Working Group identified three key areas of
focus. These were:
•
Preparation of a national financial competency building strategy;
• Implementation of adult financial literacy programs; and,
•
Integration and strengthening of financial education into the core curriculum at
primary and secondary school levels.
The Financial Literacy Working Group continues to work very closely with the Reserve Bank,
PFIP, various government institutions such as the Ministry of Education and the Fiji Bureau
of Statistics, the private sector and NGOs, in the implementation of projects under its area of
mandate. The Financial Education or FinEd Fiji Project, currently being piloted this year in
28 "champion" schools, by the Ministry of Education and PFIP, will result in 197,000 students
having exposure to financial education in all Fiji schools, annually from 2013.
National Financial Competency Survey
Ladies and Gentlemen, in the first quarter of 2011, the Reserve Bank was approached to
take the lead role as Project Manager and coordinate a survey that would provide a reliable
set of data to assess the current levels of financial literacy of low income households as well
their attitudes towards money. The actual survey was undertaken in the last two weeks of
November 2011 and some key initial results were released in the first quarter of this year.
A draft report entitled "The Financial Competence of Low Income Households in Fiji" was
presented to the National Financial Inclusion Taskforce last month.
I understand that an embargoed copy has been circulated and is now available to all the
participants present here today.
The Report makes interesting reading and I am sure that participants may have further
questions. I am especially interested in the recommendations on critical issues that are
pertinent to our financial system: such as lack of understanding among the low income
households about financial products and services, particularly the cost of money; what are
some of the innovative ways of disseminating financial literacy training and information; what
kind of information do financial service providers need to design appropriate financial
products; how can the private sector facilitate financial literacy training ; and, what are
solutions that can provide for the risk of poverty in old age.
We are fortunate to have here with us today, Dr. Jonathan Sibley, the consultant, who
designed the framework and assessed the financial competency data. Dr Sibley will discuss
his Report and would be able to respond to questions relating to the findings.
The importance of financial literacy
Ladies and Gentlemen, the value of financial literacy and its policy implications is well
documented and we are again very fortunate to have two senior representatives from the
Ministry of Finance and the Ministry for Strategic Planning, National Development and
Statistics, to share insights from the Government's perspective.
The challenge for the Reserve Bank, and indeed all of us here today, is to ask ourselves
what we can all do collectively to create an inclusive environment. An environment which
empowers consumers and those from low income households to have access to affordable
and appropriate financial services and products: and, in having such access, being further
able to make informed financial decisions and choices.
What else can be done to encourage all individuals to prepare a budget, and support them to
save and invest wisely? For every household that does this there is an opportunity to
improve living standards and bring about a more prosperous community and nation.
Financial literacy is the key driver in achieving financial competency.
Importance of financial literacy to Reserve Bank of Fiji
Ladies and gentlemen, various country studies have shown that when people are financially
literate and have access to appropriate financial services there is greater potential for socio
and economic development and opportunities for people to work their way out of poverty.
As I have mentioned throughout this speech, much has already been done by the
stakeholders here today in our drive towards full financial inclusion. We can perhaps give
ourselves a little pat on the back. However, the momentum must continue. And this is why
we are all here! We each still have a part to play.
The Reserve Bank pledges its ongoing support to continue the role we have taken on. A role
which we felt so strongly about that it required us to create a new department in order to
facilitate the need that was evolving.
In addition to what we have been doing, the Bank is also currently reviewing and developing
an appropriate consumer protection framework mechanism to provide minimal standards
both for consumer empowerment and market conduct. To this end we are working with other
central banks in peer learning and sharing of lessons learnt and best practices.
We will continue to budget for and facilitate and promote financial literacy during the financial
inclusion and microfinance expositions that we organise around the country. We encourage
our fellow stakeholders to advocate this important issue and are monitoring and collating
data to see where this can be effectively used.
Conclusion
Ladies and Gentlemen, the theme for the workshop is an apt one: "Financial Literacy and
Competency for All", clearly with the emphasis on the all.
The focus of this workshop is to develop and ensure that there is a policy in place at national
level to support and empower both consumers and stakeholders. It is about empowering and
making available necessary information, knowhow and tools, for all citizens to be able to
make informed financial decisions. This is particularly so for vulnerable groups, such as the
poor and underserved. This has to be a national agenda. Every Fijian must take ownership of
this. Our decisions today impact the later generation and it is essential that this is taken
seriously.
Learning never stops. Knowledge is accumulated over time with each passing day. What we
deliberate and strategize over the next one and a half days will impact the lives of each and
every individual in Fiji. Take a moment to realize this fact that the decisions made today will
make a change. Let us make it happen!
With these words, I declare this workshop open and wish you all the very best in your
deliberations.
Vinaka.