Innovations In Financial Literacy and Consumer Empowerment A Malaysian Experience. Nirmala Supramaniam AKPK

Transcription

1 Innovations In Financial Literacy and Consumer Empowerment A Malaysian Experience Nirmala Supramaniam AKPK

2 Contents Contents Introduction AKPK Challenges Innovation Conclusion 2

3 Background Private consumption has strengthened Increase in level of household indebtedness Household indebtedness remains within prudent level Household sector NPL Despite prudent lending and borrowing, there are cases where consumers are unable to meet financial obligations 3

4 Consumer Challenges 4

5 Financial Literacy 5

6 Establishment of AKPK Credit Counselling and Debt Management Agency (popularly known as AKPK) was set up by Central Bank of Malaysia in April 2006 part of the Framework for Consumer Protection in the Financial Sector Master plan to provide credit counselling and financial education as well as debt management services to individuals 6

7 AKPK s Objectives Provide an avenue for individual borrowers and potential borrowers to seek advice and assistance in managing their credit through financial education, counselling and specific advice services Promote a sound and robust banking system by facilitating debt repayment efforts and minimising incidences of non-payment arising from bad debt management 7

8 Scope of Services Financial Counselling - One-to-one counseling & advice - Assistance in analyzing financial situation & identifying options available Debt Management Program (DMP) - A personalized programme - Review fin. condition & tailor solutions - Ongoing counseling and education 8

9 Description % Poor financial planning 22.6 Failure/slowdown in Business 16.5 High medical expenses 15.1 Lost control on usage of credit cards 11.1 Lost job/retrenched 9.9 High cost of living 6.5 Others 6.0 Unexpected financial commitment 5.6 Not stated 4.8 Death and/loss of breadwinner 1.1 Failed investment 0.9 TOTAL 100 9

10 Financial Literacy Financial Education Programme - Public Briefings - Infusions - Online Learning Portal 93,419 Financial Awareness Programme - Website - Facebook,Twitter, E- newsletter - Press,TV,Radio - Theatres 117,943 21, , ,661 1,936, , Jan - April

11 Financial Education Programmes Personal Financial Management - Why Everyone Needs Financial Planning - Borrowing Basics - Power From Your Money - Living Your Life - Financial Products and Services - Getting Out of Financial Trouble - Building Your Wealth - Planning for Uncertainties POWER! Managing Debts Effectively - Cash Flow Management - Managing Debts - Borrowing Basics - Wise Usage of Credit Card - Buying A Car - Buying a House Delivery Method were mainly classroom facilitated methods trainings were on request basis 11

12 Challenges Issues How to best engage consumers in Financial Education What type of information is needed Delivery method How to reach more people quickly and effectively Engaging Consumers Huge Target Actions Study consumers need Develop programmes to suit target group Multiple channels of delivery Involve private, public sectors and NGOs through collaborations Awareness of Financial Education through media Train of trainers How to make people practise & internalise what they have learnt? Entrenched attitude and behavior Form focus group to continue monitoring Develop attitude changing programs Assessment How to measure achievement? Pre and post studies Impact Studies 12

13 Engaging Consumers Major Concerns Students ( years) Adults ( 20-45) Entering workforce, Starting and Raising a Family 7.9 mil (household < RM4,000) under BR1M Malaysia s household debt 86.8% of GDP - driven by property & motor vehicle loans Lack of awareness issues Education Debt Rising trend of young adults getting into financial difficulty as result of lifestyle pressure & lack of financial management skills MDI - Bankruptcy Statistic (2012) Those declared bankrupt are getting younger Age = 56.9% Age = 29.1% AKPK DMP Statistic (May 2014) Age = 17.1% (n=17,096) Age = 39.8% (n=39,811) Age > 40 = 43.1% (n=43,048) 13

14 Engaging Consumers Major Concerns Retirees > 40 Retirement issues Malaysians expected to live 20 more years after retirement May not provide sufficient retirement funds and ability to sustain through retirement Retirement age increased to 60 - help to have enough savings (not earning enough ) 54.8% of age group are self employed - presumed without pension or EPF HSBC Survey (2012) 43% of respondents inadequately prepared 10% not prepared at all for retirement Biggest fears were financial hardship (68%) and poor health (59%) Biggest obstacle to save - Cost of living (50%) - Buying house (48%) - Children s education (33%) 14

15 Example of Life Events Consumers Need Life Stage School Tertiary Education years Entering Workforce years Starting a family years Raising a family years Retirement > 40 years Acquiring credit card Buying a car Planning for marriage Honeymoon Buying a house Children s education Planning for Retirement Managing retirement fund Getting a parttime Opening an account job Taking study loan Pursue Hobby Providing guarantee Getting baby Insurance Family Holiday Change job Estate planning Unexpected Life Events includes losing job, untimely demise and receiving a windfall Common Elements: Essential financial skills and knowledge Budgeting Saving Spending Managing debt Investing Managing risk Rights & Responsibilities Products & services

16 Topics Cash Flow Management Managing Risk E-Payment Borrowing Basics Investment Credit Card Buying Car Managing Debts Retirement Buying House 16

17 Huge Target Delivery Mechanism When? Who & How? > 10% < >>>>> 70% <<<<< >> 20% << Tertiary Education Entering Workforce Starting & Raising Family Retirement > 40 Delivery Method Facilitator Assisted Learning (FAL) Briefing/talks (by AKPK & outsource speaker) Training of Trainers (ToT) Booklet FE embedded in HEI learning curriculum As part of soft skills modules Facilitator Assisted Learning (FAL) Briefing/talks at workplace, seminars, road show, etc. (by AKPK & outsource speaker) Training of Trainers (ToT) Self-Directed Learning (SDL) Media Newspaper, Magazine, TV & Radio, Webinar, Video clip promo, Social media (Facebook, Twiter) & YouTube Website OLP (E-learning & Mobile Apps) Publications Books, Pamphlets Collaboration with stakeholders Collaborate with industry players on specialised modules Develop product to use by third party to deliver and assess the outcome Help to Cope Approach (For customer who wants to learn certain subject urgently) Dedicated FED specialists within Call Center Unit to provide real-time consultation or coaching on specific topic 17

18 Entrenched Attitude and Behavior Focus Group Identify a group of 5 to 10 members Financial Assessment (Pre) OBJECTIVE : To assess the change in financial behavior of the selected focus group in managing their cash flow and increased savings Financial Education Monitoring over a period of 3 6 months Financial Assessment (Post) 18

19 Case Study Amanah Ikthiar Malaysia AKPK educated 25 members of AIM on Financial Education Members learned on improving their saving and increased their income - Provide Financial Education for the AIM members and students, monitoring the progress of behavioral change The students used the guidance and guided the AIM members AKPK educated 86 students of Taylor s University Students learned hardship and the value of money- hands on experience 19

20 Tamil Foundation provides a 10 module to assist parents on assisting their children s development Case Study Tamil Foundation Parents guided their children AKPK s Financial Education Module was one of the 10 modules for the parents A group of 10 parents were taken in as focus group and their cash flow were monitored over a period of three months The children s academic results improved Parents were able to concentrate more on their children as financial issues were better managed 20

21 Assessment Focus groups specific target group behaviour change Online surveys Pre and post questionnaire Supervisory visits Effectiveness of module and trainers General survey AKPK s clientele 21

22 Conclusions 2015 Implementation of Life Events Module Focus Group Studies Mobile Application Learning AKPK aspires to make prudent financial a way of life for all Malaysians 2016 Increase of online learning methods Financial Literacy Household Name 2017 Certification of module and trainers E-Learning via mobile applications Focus group behavior change via mobile applications Authority of Financial Wellness

23 THANK YOU Make Prudent Financial Management A Way of Life POWER! AKPK Info line: