Financial literacy is a key component of the entire apparatus for consumer protection. And a financially educated society will bring together its financial resources to produce a stronger economy, which is particularly important given the tough economic climate.
This was the view of Central Bank Governor Alvin Hilaire during the National Financial Education Committee launch at the Central Bank, Port-of-Spain, on Monday.
“When you look at consumer protection and education within the form of a major apparatus there must four pillars, firstly knowledge, including knowing the product and the risks. Then there is transparency and market conduct.
“Clearly, the individual does not work alone and we want to make sure there is transparency in how the products are unveiled. It is no use being given a long, long form that nobody understands and that everyone can’t relate to,” Hilaire said.
He said there was a need for “ethical financial institutions” which are able to not only prevent matters but to operate in good faith.
“We want financial institutions to not only explain the products but to conduct themselves according to the highest ethical standards,” Hilaire said.
He said redress was also a significant aspect, adding that in other countries there was the availability of a fair trading commission.
“This is something we don’t have, so we need to work on these things to make sure that things don’t fall through the cracks. When you have an educated public it creates and awareness so you do not have a problem in the end,” he said.
Financial Services Ombudsman Dominic Stoddard, who also spoke, said an estimated 21 per cent of T&T’s population remained unbanked.
“Our financial literacy survey found that 44 per cent of the population have low financial capabilities,” Stoddard said.
He said financial capability was measured according to three dimensions, including one’s ability to make ends meet, planning ahead for one’s financial future and knowledge of financial products and services.
“As a country we need to re-examine our relationship with money. Financial literacy is a life skill that you don’t just pick up along the way. Most of us adults would have wished from an early age we had an opportunity to lean about money and to develop responsible financial behaviour,” Stoddard said.
He said from 2017 to date they had held sessions with over 5000 people across the age spectrum and geography throughout T&T, but this was still insufficient.
“There is a deep and pervasive negative view of the financial sector. I see almost 1000 complaints annually, most of which could have been avoided had the public been properly informed, had the benefit of a financial literacy session and had the confidence to ask appropriate questions,” Stoddard said.
The committee comprises the Bankers’ Association of T&T (BATT), Central Bank’s National Financial Literacy Programme, T&T Credit Union League, Association of T&T Insurance Companies, Tobago House of Assembly’s Financial Literacy Secretariat, Securities and Exchange Commission of T&T and the T&T Stock Exchange.