The central bank is working on developing a new syllabus for financial literacy that will be included in the general education curriculum, but has yet to find a development partner to help craft a program, an official said yesterday.
Chea Serey, director-general of the National Bank of Cambodia (NBC), said that while numerous parties have shown interest in helping draw up a program, the central bank has yet to decide on an official partner or set a timeline for implementation. The NBC will coordinate with the Ministry of Education to make sure that it compliments existing nationwide curriculum, she said.
Nevertheless, Serey stressed the importance of quickly adopting a curriculum while the country’s banking and financial services continue to mature and draw a new generation of clients. Currently, only 17 per cent of Cambodia’s adult population is currently using the available financial tools, according to a recent FinScope Consumer Survey.
“It is important for children to at least understand the concept of interest rate and interest calculation,” she said, adding that the program could be incorporated into other core subjects such as math or social studies.
“People who can manage their finance well can avoid going into over indebtedness and can actually help manage their lives better.”
She continued by noting that the majority of Cambodians do not understand how to choose loans that have fair interest rates and that provide adequate repayment plans.
David Van, managing director for Cambodia of Bower Group Asia, said that a financial literacy program should be able to target rural areas where clients of microfinance institutions struggle to repay their debt while thinking that they have received low interest rates.
“Some people might not know what kind of business they need to support a loan with an interest rate of 3 per cent a month,” he said, adding that the compounded that rate equals 36 per cent of the annual loan value. “This reflects that educating them about financial literacy is necessary for them.”
Chan Sophal, director at the Centre for Policy Studies (CPS), welcomed the initiative, adding that with the Kingdom’s rapid credit growth financial literacy is a growing concern.
“I worry for our people who take out large loans, but who are poor in financial literacy,” he said.