TO strengthen financial literacy among the public, the subject should be introduced in schools to create awareness and inculcate good financial management at a young age.
Financial literacy must be promoted aggressively, as a lack of it can lead to many problems like debts, corruption and crime.
There are also cases where the victims are involved in gambling or borrowed from loan sharks, which can make their lives miserable.It was reported that in developed countries, financial literacy is introduced at the preschool level where children are taught how to use, save and donate money.
Director at Universiti Malaya’s Social Wellbeing Research Centre, Emeritus Prof Datuk Dr Norma Mansor, was quoted as saying that preschools in England and Wales, for example, are imparting financial literacy to children as part of an education on living responsibly.
We need to emulate them, as the household debt in Malaysia now stands at 82.1% of the country’s gross domestic product (GDP).
This is higher compared with other countries with greater income per capita such as Italy, where it is at 40.3% of its GDP; in Japan, it is at 58.1%; and in the United States, it is at 76.3%.
Various studies and statistics show that financial problems not only affect individuals but also their family, community and the nation.
Statistics from the National Population and Family Develop-ment Board show that one out of every two married men and two out of every five married women have difficulty managing their finances.
Among the problems these individuals struggle to manage are education expenses, daily family expenses and family medical expenses.
According to Bank Negara’s Credit Counselling and Debt Manageآment Agency (AKPK), couples between the ages of 20 and 40 face serious financial problems because of the towering cost of early childhood care and education.
AKPK’s data reveal that 55.1% of the agency’s 266,454 recorded cases this year was made up of those at the start of their careers and those who had just started a family.
The data also showed that 78% – or 208,221 – of individuals who sought aid from the agency were married couples, with 13.9% of those between the ages of 20 and 30, while another 41.2% were between the ages of 30 and 40.
An income and expenditure imbalance will have a negative impact on household finances and can even drive families to the brink of bankruptcy.
Financial desperation can lead to people trying risky solutions such as borrowing from loan sharks, gambling or becoming involved in criminal activities.
I hope the government will expedite the tabling of the proposed Consumer Credit Bill to protect consumers and encourage a healthy credit market.
The new law will help strengthen the protection framework for credit consumers in the country, which would help complement efforts to educate people on how to make sound and wise financial decisions.
TAN SRI LEE LAM THYE
Malaysia Crime Prevention Foundation (MCPF)
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