Sorachna says financial tools are important for customers to benefit from the sector. Photo supplied
Prince Bank Plc unveiled its plan to promote financial literacy with its campaign called “Me and My Money”, a series of educational video clips to promote the concept of “earn, save, spend, and lend,” among Cambodian people.
Prince Bank’s Chief Executive Officer Honn Sorachna said that the Cambodian financial industry has seen a noticeable development with more inflow of banks, micro-finance, and insurance firms making more financial services and products available for Cambodian people.
With the development, Sorachna said understanding of basic financial tools is very important in order for Cambodian people to gain benefit from the sector and avoid the risk of becoming over-indebted or falling victim to scams.
“If our Cambodian people do not know how to use the financial (product) properly, they might not use it in the right direction. It will be less efficient, negatively affect their family’s finance which eventually affects the country’s economy,” he said.
“It is our effort to promote financial literacy to all Cambodian people to make them understand the basic knowledge about finance.”
According to Sorachna, a series of video clips will be posted on the bank’s website and its facebook page so that Cambodian people will learn the fundamentals of financial knowledge. The campaign to promote the concept will also be created to spread the concept to more Cambodians.
Prince Bank’s initiative is corresponding with Cambodian central bank’s scheme aimed at boosting financial literacy. Now, Prince Bank become one the National Bank of Cambodia’s strategic partner in the work to promote financial literacy in the Kingdom.
Cambodians fared poorly on the 2015 Global FinLit Survey, a comprehensive global measurement of financial literacy by Standard & Poor’s, with only 18 percent of those surveyed able to answer three of four questions on basic financial literacy. Just 40 percent of respondents in Cambodia could answer questions related to the calculation of simple and compound interest, which is essential in understanding the terms of loan agreements, while only 21 percent were able to answer a question on diversification of investments.
The Asian Development Bank Institute (ADBI) said in a report released mid-2017 that financial literacy in Cambodia continues to reach low rankings, although the level of understanding of financial products available is large.
ADBI conducted surveys in Cambodia and Vietnam to measure financial literacy across various segments of the population, differentiating the results by age group, income level and education. Cambodia received a total score of 11.5 out of a possible 21, while Vietnam scored 12, according to the report.
However, Sorachna said that the understanding about financial sector is much improved among Cambodians especially in the last few years, thanks to more investment in the industry from banks, MFIs, and insurance firms.
The central bank in the last few years has begun a series of campaigns aimed to educate children on the basic concepts of savings, interest rates and managing daily expenses such as sending out comic books titled Let’s Talk Money, designed a curriculum to teach students about financial management, and make “NBC-Edu” available in app stores, this allows users to study basic financial tools on iPhone and Android devices.
In addition to the existing approach, all relevant stockholders like financial institutions should create more events and campaigns, to boost awareness as there is a belief that the more people get informed, the more they know and understand.
“More people hear about the information when they go anywhere, they remember and it is instilled in their mind so the knowledge is improved,” he said.
