Youth. Developing Financial Skills and Competencies Thailand s Experience. Amara Sriphayak Assistant Governor Bank of Thailand

Transcription

1 Youth Developing Financial Skills and Competencies Thailand s Experience India OECD World Bank Regional Dissemination Conference on Financial Inclusion New Delhi, India 4-5 March 2013 Amara Sriphayak Assistant Governor Bank of Thailand

2 Outline 1. Why are financial skills and competencies for youth important? internal & external factors 2. What has been done in Thailand 3. Challenges and further steps 2

3 Internal factor: The youth themselves - It has been recognized widely that financial literacy is an important life skill. - As both good and bad habits are inculcated effectively when one is in their childhood and likely to remain for a lifetime, financial education should start as early as possible. - Research has shown that young people determine their attitudes about handling money by the time they finish the 5th grade.* 1. Why are financial skills and competencies for youth important? (1/5) *source : 3

4 1. Why are financial skills and competencies for youth important? (2/5) External factor: The more complex financial products and services Nowadays society witnesses increases in the variety and complexity of financial services due to the development of financial products and intense competition, and this trend is likely to continue in the future. 4

5 1. Why are financial skills and competencies for youth important? (3/5) External factor: Economic Integration in various regions NAFTA - Enhancing cross-border trade and services and accelerating competition in financial system result in higher demand for services and more complex financial products - Consumers and the potential ones like youth need to be well equipped with financial knowledge and be able to make informed decisions sources of pictures : and 5

6 External factors: Aging Population Burden ratio 1. Why are financial skills and competencies for youth important? (4/5) number of workers : number of the elderly :1* 4:1* 3:1* Aging population will impose greater burden on the next generation source : Fiscal Policy Office, Ministry of Finance, Thailand * obtained from data on the Thai citizens 6

7 1. Why are financial skills and competencies for youth important? (5/5) External factor: The level of household s financial understanding Survey shows that most households do not understand interest rate calculations (However, they realize that when they are in default with one bank, another bank could get their information) Financial Literacy Questions in 2010 National Survey Incorrect Correct Suppose that there is an epidemic in district A and there are 150 residents. If the probability of death fromthis epidemic is equal to 10 percents. How many people are expected to die of this epidemic? 42.88% 57.12% Suppose that you buy a fridge for 1,000 baht and have to finish your payment within 1 year, and there are two options available as follows: 92.51% 7.49% A. make a monthly payment of 100 baht for 12 months. B. make only one payment next year plus 20 percent interest. Which choice do you think is cheaper? Suppose that you borrow1,000 baht froma bank and they charge 20 % compound interest rate per year. If you cannot make a repayment, howlong does it take will your debt double? 83.87% 16.13% Incorrect Correct Suppose you cannot make a repayment for a bank. Do you knowthat other banks could get your information? 34.78% 65.22% Are you aware of the full deposit guarantee by government in Thailand? 72.81% 27.19% source : 2010 Thailand s national household survey sample size : 9,867 households 7

8 2. What has been done in Thailand (1/6) Bank of Thailand (BOT) : Targets also include vocational school / university students Target Group Sub Target Group Plan Implemented Activity Target Groups Main Individuals who are FIs Clients (Low-Middle Income and Low Financially Literate) including Vocational School /University Students Vocational School /University Students Individuals whose Income and Saving are Classified as Low Individuals whose Income and Saving are Classified as Medium - Products : Saving, Credit, e-payment - Financial Planning - Economic Issues (Lecture / Workshop / Booth/ Short Film / Infographic via Events at School, University/ Website / Social Network / Mass Media) - Right & Responsibility - Basic Financial Products - Debt Resolution - Basic Scams (Lecture / workshop / Leaflet / Souvenir / infographic via Events at Factories, Companies / Mass Media) - Right & Responsibility - Financial Products - Debt Resolution eg. Credit Card - Scams eg. Internet Banking (booklet / Infographic via Website / Social Network / Smart Phone Application / Mass Media / Sky Trains) - Lectures on Financial and Economic Knowledge by BOT s Region Offices -Animation on Inflation Produced by MPG / FCC - Lectures on Financial Knowledge and Debt Consulting Clinic / Soap Operas on radio/ Interviews on TV by BOT s Region Offices - Booklets Produced by FCC - Financial Wisdom Fair organized by FCC / Corporate Communications Department - Joining Money Expo Fair by FCC/ Region Offices 8

9 2. What has been done in Thailand (2/6) Bank of Thailand (BOT) : training programs and CSR projects Training programs for teachers and university students CSR projects such as giving book corners to schools nationwide and voluntary projects at primary schools near the BOT 9

10 2. What has been done in Thailand (3/6) Thailand Securities Institute (TSI), under the Stock Exchange of Thailand (SET) Recognized as Thailand s main driver in youth financial education s initiatives Financial Literacy for Youth : Main Concepts Financial Understanding Financial Competence Financial Responsibility How to Earn How to Save How to Spend How to Invest source : Thailand Securities Institute (TSI) 10

11 2. What has been done in Thailand(4/6) Thailand Securities Institute (TSI), under the Stock Exchange of Thailand (SET) TSI s Youth Financial Education Progress ( ) 46 Model Schools Train the Teachers 35,000 teachers 24,000 Schools 7 million students I will Save sub-project 1,200 Schools Handbook dissemination 1,000,000 handbooks 200,000 Instructional Guidebooks Financial Quiz Competition 20,000 students SET JFC 20,000 students E-Learning 17,000 Schools source : Thailand Securities Institute (TSI) 11

12 Ministry of Education (MOE) Content on financial education is included in the curricula for primary, secondary and vocational students. Ministry of Finance (MOF) Strategies to lessen economic and social inequality stipulates coordination with MOE to develop curricula with respect to financial education. Specialized Financial Institutions 2. What has been done in Thailand (5/6) - Government Savings Bank (GSB) conducts a project called School Bank nationwide in order to inculcate students with savings habit and financial discipline. - Bank for Agriculture and Agricultural Co-operatives (BAAC) also runs a similar project but in different areas from GSB. Thus, these two banks complement each other. 12

13 Co-ordination of authorities in Thailand 2. What has been done in Thailand(6/6) -The Committee on Financial Education, comprising representatives from both public and private sectors and chaired by the Permanent Secretary of MOF, was officially established in May Currently, the Committee is taking stock with regard to initiatives which have been implemented by related organizations for each target group in order to identify gaps and consider the policies/ initiatives needed in the future. OIC Office of Insurance Commission 13

14 3. Challenges and Further Steps (1/1) Challenges : - Not all teachers have good understanding and skills in teaching basic Economics and Finance. However, MOE co-ordinates with TSI, BOT and GSB in arranging train-the-trainer programs. - An appropriate system to assess youth awareness, mindset and behavior is yet to be explored. - It is also parents responsibility to inculcate youth with suitable financial behavior. Further Steps : - BOT will develop content on financial products for vocational and university students who are graduating and becoming potential bank customers. - Co-ordinatios among the aforementioned agencies through the Committee on Financial Education will be pursued. 14