Bancherul - BANCI / ENGLISH / Romania: Urgent Call for National Program on Financial Education

At a time of global economic crisis, Romanians have a low level of financial literacy, scoring 31 on a scale from 0 to 100, according to a survey commissioned by the World Bank.

In today’s economic climate, it pays for individuals to be responsible for their financial affairs, to manage their money, to plan ahead, to choose financial products and to stay informed about financial matters. The Financial Literacy Survey commissioned by the World Bank in May 2010 found that most people in Romania struggle to keep up with their financial commitments and make little use of available financial services. About half of the population saves money from their monthly salaries. The large majority of those who do save do so for rainy days and much less so for retirement. Most of the savings are kept in cash, at home.

About 14% of the population have no knowledge, nor interest, of participating in the financial services markets. An additional 41% have poor knowledge of financial matters and very little confidence or knowledge about financial institutions.

“Most people are unprepared for the unexpected,” said Sue Rutledge, Coordinator of World Bank Global Program on Consumer Protection and Financial Literacy, then she added “It would be in their best interests to become more financially literate. The socio-economic implications are significant and individuals should be provided with the tools that can improve their lives.” Rutledge also said, “Financial education of the population should complement the regulation and supervision of financial markets and the financial services for consumer protection. Financial education is not a substitute for financial regulation, or for consumer protection, but it can add to their critical benefit.”

“It is an urgent task for Romania to develop and implement a national program for financial education, based on a public-private partnership between the Government, the financial sector regulators, the financial institutions, the education system, NGOs, media and others.” said Arabela Aprahamian, World Bank Regional Coordinator of the program.

The Conference on Financial Services Consumer Protection and Financial Literacy, organized by the World Bank and the Romanian Banking Institute on July 5 convenes a wide audience of governmental officials and experts from public and regulatory and supervisory authorities, as well as senior decision makers, industry and media experts and academics to disseminate the findings of the Financial Literacy Survey in Romania and to carry on a dialogue on financial education. The survey is a follow up to the Diagnostic Review on Consumer Protection and Financial Literacy in Romania completed by the World Bank in 2009 and it is part of a Bank-sponsored program to assess consumer protection and financial literacy in developing and middle-income countries.