Early education to master the art of managing money is vital to create a financially literate population, and this is what the South Koreans did in the 1960s when they started to rebuild their fractured economy.

The government was bent on transforming the nation’s economy and one of the steps initiated was to mobilise bank savings among the public and the concept was introduced at school levels nationwide.

“We need a behavioural change and we need to start at an early age. Rather than knowing it, it is better to do it. Knowing and doing is two different things. When I started my first savings account, I was in Grade 4 and was 10 years old.

“In Korea, [at that time] there was a strong social campaign “One Student, One Passbook”[to encourage bank savings]and this was mandatory. Schools and commercial banks worked together, “ said Shin Chang Moo, President of PPCBank.

In an interview with The Post, Shin vividly narrated South Korea’s success story and how it helped to raise national savings, and how the country eventually transformed itself into an economic powerhouse in Asia.

A pertinent policy that rewarded the nation was promoting “school banks” that encouraged savings.

“Then our per capita income was less than $100 and the national deposit ratio was only about six per cent in the mid-1960s. But in the 1980s deposit ratio rose to more than 30 per cent.

“It was a strong initiative by the Ministry of Education, the Bank of Korea, Ministry of Finance and the National Publicity Relations Office, and it was very successful,” Shin prided during the interview at its stylish headquarters in Phnom Penh.

Cambodia may not share the same social or economic status with South Korea but it does share some similarities – rebuilding its economy after a prolong instability, creating employment, reducing poverty, promoting education, and bolstering its financial system as well.

For instance, the National Bank of Cambodia is actively promoting financial literacy among the public to ensure consumers have the right skills to manage their financial future properly.

The Financial Literacy Event to be held at AEON Mall 2 Sen Sok on April 23 is an example of how the central bank is trying to educate the public about money skills.

“We relied on exports like textiles, hats, wigs, footwear and also heavily depended on foreign aid.

“So there are some similar conditions and some different conditions. I am not sure the Korean case is applicable in Cambodia but we can modify it and apply to the Cambodian situation.

“Giving students knowledge and skills in classrooms, like bank products such as deposits. And, deposits are the easiest product to start with,” said Shin.

In a fast-expanding economy like Cambodia, especially home to a young population, knowledge on managing finance is crucial to make sound financial decisions such as investing, borrowing, saving or wealth creation.

In a nutshell, an individual must be able to make prudent decisions when money is involved to avoid falling in a debt trap.

With financial markets becoming more complex with the entry of new banking products (like investment schemes, credit cards and debit cards) and the entry of financial technology, a strong foundation in financial education cannot be ignored. Financial ignorance can be a disaster, especially for fresh graduates entering the workforce.

In addition, a high level of financial literacy can promote financial inclusion, whereby the public can have access to affordable and productive financial resources.

And, this is certainly needed in Cambodia where a large percentage of the population do not have bank accounts and the rural population have limited access to formal banking system.

“Financial literacy promotes financial inclusion. Commercial banks must be active in promoting financial literacy and financial inclusion. End of the day it will only benefit the banks, we (all banks) will have a bigger market share,” said Shin.