FINANCIAL Services Ombudsman Dominic Stoddard was blunt in his assessment of the national capacity to manage money.
Almost half of our citizens, 44 per cent, were classified in a 2013 survey as having low financial ability. More than half of the people over 60 who took the survey, 68 per cent, had no personal or occupational pension plan. Among this country's entrepreneurs, 67 per cent were operating without financial statements and a third of those who were, did not understand them.
Stoddard oversees the revamped National Financial Literacy Programme (NFLP), which was moved to the Office of the Financial Services Ombudsman in 2016. The programme, which has been existence since 2007, has coached 200,000 people, 91,000 of whom participated in the programme between 2016 and 2018. That, Stoddard quite accurately noted, is a drop in the bucket.
The NFLP isn’t the only initiative that’s been undertaken to improve financial literacy. In November 2018, Term Finance, a web-based credit business operating in the Caribbean that targets individuals and Small and Medium Enterprises, hosted financial wellness training for employees in Trinidad and Tobago.
The Unit Trust Corporation also undertook financial workshops that month to teach attendees in Sangre Grande, Carenage, Bon Accord and Bethel the principles of proper budgeting and planning. Both of these institutions undertook these projects at no cost, and while it’s an excellent outreach and public relations opportunity for them, it’s also good business, because informed financial customers are always going to be better business collaborators.
There is little indication that the state has seen the wisdom in improving the quality of financial literacy among the public at large. Financially literate citizens are less likely to be dependent on the state and better equipped to contribute to the economy, so it would seem sensible to adopt a wider-ranging programme focused on correcting a dramatic shortfall in financial literacy that affects households as potently as it does small business.
Failing to do so is likely to be a recipe for continued state support of citizens on the margins, an unacceptable and unnecessarily humiliating situation given the work that many of these people have done over their working lives and can do in the future, since many of those targeted by the NFLP are in primary and secondary school.
It’s clearly time to acknowledge the value of improving national financial literacy by introducing more comprehensive training in basic money management and entrepreneurship directly into the school system.
Financial literacy is a fundamental tool of personal empowerment. It’s not something for business people only. It's of value to everyone and has an outsized impact on the sectors of the public managing limited resources.