Why do we have to ‘give sense to money’?
Throughout life, every person makes a number of financial decisions, some of which have significant implications for the individual financial stability of the person and of his/her family. Moreover, financial knowledge and skills determine important aspects of the lifestyle that translate into wellbeing, or on the contrary – into financial difficulty. The most important decisions with financial impact appear as soon as we become adults and may be the following: contracting a consumer credit; buying a dwelling on mortgage; buying a car in leasing; buying personal goods; investing in financial market instruments or using certain savings instruments, etc.
The lack of knowledge about the basic financial concepts, such as interest rates, inflation, exchange rates, leads to greater exposure to financial risks, including the risk of over-indebtedness.
More and more people in the Republic of Moldova become part of the financial system either by opening a bank account, making a deposit or accessing a loan. In the last 3 years, the volume of loans granted to individuals by banks has doubled, and the number of bank cards in circulation has increased by over 400 thousand. On the other hand, the non-bank lending sector has also seen an increase in the number of loan beneficiaries, with microfinance organizations granting at least one new credit every working minute - an imposing speed for a country the size of the Republic of Moldova. These developments point to a rapid increase in the use of financial products by the population, which, according to the authorities, must go hand in hand with the level of knowledge and skills, to avoid unpleasant situations of over-indebtedness.
In an attempt to address the complexity of the financial system, by simply explaining to all the main financial products and concepts, the National Bank of Moldova and the National Commission of the Financial Market have joined their efforts in promoting financial education among the population. The initiative was supported by the Good Governance Fund of the Government of the United Kingdom and has enjoyed great success both among the population and the participants of the financial market, namely banks, non-bank lending organizations and even educational institutions with economic profile, which came with public messages for joining the campaign. As a result, the materials prepared within the campaign were viewed by more than 118 229 unique users in less than two months, generating 144 references on the pages of the partners and in the press.
Key numbers of the campaign
9 infographics, 9 informative materials, a financial consumer protection guide;
12 trainings in six cities across country: Chisinau, Soroca, Balti, Calarasi, Cimislia and Cahul
144 references in the mass-media and a total reach of the posts of 118 229 unique users
Institutions and associations which have joined the campaign
2 non-bank lending institutions (Microinvest, Invest-Credit)
7 banks (Victoriabank, MAIB, Moldindconbank, Mobiasbanca OTP Group, Energbank, Eximbank, EuroCreditBank)
other partners: Bankers League, Moldovan Banks Association, Academy of Economic Studies of Moldova
“Financial education is imperative, because financial products develop faster than human knowledge and abilities”, stated the Governor of the NBM, Octavian Armasu. The head of the central bank underlined that “awareness of the risks of the financial products is the strongest tool that we can make available to the population to prevent financial crises. When we take a loan, we need to understand the risks and estimate objectively our capacity to repay it”.
In his turn, Valeriu Chitan, the president of NCFM stated that “the role of financial education becomes more and more visible, especially in the context of social-economic evolution and challenges the countries in transition are facing. In this regard, to support the imperative of making consumers more responsible and increase their trust in financial products and services, it is necessary to involve the authorities in organizing information and financial education campaigns, as a component of the regulation and supervision reforms”.
What do young people think about the elaborated materials?
In order to evaluate the impact of the financial education campaign, a series of meetings were held throughout the country. The evaluation aimed at obtaining quantitative and qualitative information regarding the interaction with the elaborated informative materials and understanding their content. The evaluation found that the majority of participants in focus groups considered that the notes were accessible as language, and the topics addressed were useful and applicable in daily life.
To expand the network of partnerships within the project, the National Bank of Moldova, together with the National Commission of the Financial Market and ”Expert-Grup” Think-Tank will train several audience groups, including students, librarians and teachers, to create and strengthen a network of Ambassadors of financial education, in order to promote financial education at local level. Also, by training the librarians, the project implementers intend to contribute to the extension of the additional services offered by libraries, such as financial products consultancy.