The benefits that can be derived from Financial Education highlight the contribution that can be

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1 SPEECH BY THE PPRESIDENT OF THE JAMAICA BANKERS ASSOCIATION AT THE LAUNCH OF THE FINANCIAL SERVICES COMMISSION S FINANCIAL EDUCATION IN SCHOOLS PROGRAMME FRIDAY, FEBRUARY 4, AT THE WYNDHAM KINGSTON HOTEL. (PREAMBLE) In my capacity as President of the Jamaica Bankers Association, I am pleased to represent the banking sector on this momentous occasion of the official launch of this important initiative the FSC s Financial Education In Schools Programme. Financial literacy is especially important today for several reasons. In the words of The Hon. Donald J. Johnston, Former Secretary-General of the OECD in an address to the Financial Education Summit in 2005, Financial Education is important to both the security of individuals and the security of nations.

2 The outcomes of financial decisions have significant implications for an individual s financial security and standard of living. A person with a good level of financial literacy is likely to be better poised than someone who does not have that knowledge is to manage financial affairs in a prudent manner. Of course, by contrast, poor financial choices are sometimes based on a lack of understanding of financial matters, and this can result in a number of negative outcomes, including a lower level of financial wealth and imprudent debt levels. The importance of financial literacy, particularly in developing and emerging markets, has been highlighted by leading institutions such as the Organisation for Economic Co-operation and Development (OECD), the U.K. Department for International Development (DFID), and the World Bank Group, because of the positive direct impact this can have on promoting livelihoods, economic growth, sound financial systems, and poverty reduction. The benefits that can be derived from Financial Education highlight the contribution that can be

3 anticipated on national development. These benefits occur at the level of the individual, the firm and at the national level and include: Greater confidence in making financial decisions and improved financial situation Greater level of savings and knowledge of savings options e.g. bonds, equities and varieties of retirement accounts Development and growth of small and medium enterprises Increased demand for financial products Greater sophistication and competitiveness in the market place Financial Literacy is no longer reserved for the chosen few. More and more persons are coming to the realization that being financially savvy or learning about the value of saving, investing wisely, and how to choose from the various options available, is essential. The ability to make well-informed financial decisions plays an important part in the ability of individuals to manage

4 financial affairs well, a factor that can have either a negative or positive ripple effect on the economy. In recent years the sub-prime mortgage crisis produced a credit crunch that sent the world economy into severe recession. With this change in the global landscape, Financial Education in Jamaica has become increasingly essential as a result of some of the following factors: The impact that the reduced global access to credit has had on businesses over the past two to three years. The livelihood of many persons was badly affected with some persons still unable to make ends meet. Changes in the predictability of some of our main revenue/ income sources namely: Remittances, Tourism, Bauxite and Sugar. The fact that consumers must be better equipped to navigate through tough financial times particularly with rising commodity prices and reduced earnings, while still trying to accumulate savings.

5 Also, once we have a Credit Bureau in Jamaica, consumers will need to ensure creditworthiness through responsible behaviours such as timely payment of bills and avoidance of overindebtedness. In what appears to be the aftermath of the financial crisis however, we have seen where financial literacy and education concerns have gained momentum. Policy makers worldwide increasingly recognise the importance of Financial Education as a key component of financial and economic stability and development. This launch this morning signals that we in Jamaica are making strides in the right direction. The Jamaica Bankers Association (JBA) has for many years implemented and or supported a number of programmes which contribute to raising the level if financial literacy, especially among our youth. Specifically, we have been involved in various financial literacy initiatives through our member institutions. In our Bankers Week in October 2009 financial literacy was actually the main focus under the theme Saving our

6 country through savings and sound investments. Some 50 schools were visited by bank staff where presentations were made on the importance of saving and prudent investments in the achievement of one s goals. The multiplier effect of programmes such as these, if delivered not only to the entire school population of Jamaica, but also to community groups and the business sector is phenomenal. We urge the FSC to explore some of the valuable lessons learned from the studies that have already been commissioned as well as from this pilot programme that is being launched this morning, to ascertain how things can be improved, amended or replicated on a wider scale to adults and young Jamaicans across the island. This can only redound to the benefit of all. The Jamaica Bankers Association is committed to being an active player in the process of increasing financial literacy among the Jamaican populace. We know the benefits that can be derived and are therefore willing to

7 provide meaningful support to all who engage in this process. As I close, heartiest congratulations to the Financial Services Sector for undertaking this initiative. The decision to use the Junior Achievement Jamaica s module on Personal Choice will certainly be an appropriate and youth friendly method to communicate the message to the students in a format that can be easily related to. To the participants of this pilot study I urge you to make the most of this opportunity. Once you have completed your training, try to share your knowledge with your friends and family members so that they too can learn about their rights and responsibilities as consumers of financial services. The entire JBA membership wishes for all a successful and rewarding programme. I thank you. MINNA ISRAEL PRESIDENT JAMICA BANKERS ASSOCIATION February 3, 2011