Worrying trends in financial literacy
From Monday to Friday last week, the Reserve Bank of Malawi (RBM) and its partners hosted the third National Financial Literacy Week (NFLW) in Mzuzu to raise awareness on the available wide range of financial products.
Held under the theme Budgeting and Saving: Foundation to Financial Freedom, the Mzuzu event was the third in a series of NFLWs after the inaugural one held in Blantyre in December 2013 and the second in Lilongwe in 2014.
Basically, through the NFLW, RBM and industry associations take time to inform consumers, especially those who use little or no financial product at all, about the benefits of saving, budgeting, holding a bank account, importance of insurance policies—both long-term (life products) and short-term (for motor vehicles and other properties, including buildings, clothing, furniture etc).
Briefly, the NFLW seeks to empower the public on personal finance management and general knowledge on financial products. What do we know about pensions? How about insurance in general? Do you know what it takes to open a bank account? Where would you seek redress if a financial institution such as a commercial bank or micro-finance organisation has given you a raw deal?
It is human nature to pose to know things. But, if truth be told, there are several financial matters many of us take for granted yet we know little or nothing about.
For example, this week, a colleague told me about a business transaction she had with one of the many budding entrepreneurs engaged in cross-border trade. To settle her outstanding balance, the colleague said she drew a cheque and handed to the entrepreneur through a third party. Few days later, she got a telephone call from the entrepreneur asking her how he was going to encash the cheque when he held no account with that particular bank.
It was hard to believe her narration, but I gave her the benefit of the doubt that it could be a true life story, especially given the knowledge gap on financial matters in the country.
Personally, I was found in a more or less similar situation when, in one of the popular supermarkets in town, I offered to pay for my groceries using a Visa card on the shop’s point of sale (PoS) device. Upon noticing that the auto-teller machine (ATM) card I held belonged to a different bank from the one that branded the PoS, the till operator said: “Pepani khadi yanuyi ndi ya banki ina ndiye sizingatheke kulipira [I am sorry, it won’t be possible to process your payment because the PoS is for a different bank].”
I reasoned with the till operator, but she could not buy any of it. Fortunately, her supervisor was passing by and intervened.
In the case I encountered, I did not blame the till operator, but the provider of the PoS who needed to empower the operators with user information.
Many customers of commercial banks and insurance companies also get a raw deal which, sadly, in the spirit of suffering in silence common in Malawi, take it as normal. Did you know that if any financial institution is giving you poor service or raw deal you can report them to RBM through its Consumer Protection and Financial Literacy Unit?
Perhaps one may ask, what constitutes a raw deal? The ever non-functional ATMs is one of them as are the long queues that keep customers long in banking halls such that in some cases one is tempted to take a day off to undertake banking transactions. Insurance firms, especially short-term service providers, who play tricks on customers to avoid settling claims should also be reported.
From the look of things, there are several worrying traits indicating poor knowledge of financial matters. Let us play a part in enlightening one another.
Knowledge is power. The more people are aware of financial services, the more people will use the same, leading to achievement of the broader goal of financial inclusion. n
Feedback: amchulu@mwnation.com
