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Cambodia: Financial literacy critical for growth, meeting contingencies
To make people financially literate and educated, the government of Cambodia has been making sustained efforts for some time. As a part of the plan, the country’s central bank and the association of microfinance institutions came together to launch a financial literacy project, recently.
For common people, some of the basic elements of financial literacy and its use in daily life include understanding banking, budgeting, handling debt and credit, and investing prudently. The more financially literate and educated people are, the more they plan and save for future contingencies.
“Financial literacy is very important for all people whether they are in a lower or higher level of financial status,” Michael Tee, Chief Executive Officer of GC Life, one of the major insurance companies in Cambodia, told Khmer Times.
“Good financial literacy is crucial for individuals to move forward and have financial freedom as they will be able to be more effective in managing their income and debt, which is cash flow management and is the basis for financial planning,” the GC Life CEO said.
The project named “Safe Finance in Community”, launched by National Bank of Cambodia (NBC) and the Cambodia Microfinance Association (CMA) at the end of February is aimed at helping people utilize formal financial services in a safe and secure manner and also to enhance their reach to these facilities.
The project, according to a statement, will be initiated in the provinces of Kampong Thom, Kampong Speu, Svay Rieng and Battambang this year and expanded in the coming years.
“Many Cambodians still need to improve their financial literacy, and the government understands its importance. Thus, in the last few years, NBC, the Insurance Regulator of Cambodia (IRC), the Ministry of Education, Youth and Sport (MoEYS), the Ministry of Labour and Vocational Training (MLVT), the Ministry of Posts and Telecommunications (MPT) and others have put in a lot of effort to increase the awareness among the public.
“As a supporter in the direction of the government, GC Life has also taken a few initiatives including providing financial risk management talks to university students,” said the GC Life CEO.
Financial risk management via insurance is one of the most important aspects in the complete financial planning pyramid from wealth creation to wealth distribution, he said.
The company has launched programmes “to create public awareness, especially for the younger generation on the importance of insurance in protecting their dreams while building wealth to achieve their dreams,” Michael Tee said.
So far, the insurance major has conducted more than 10 sessions for a number of universities, he added.
Lately, the company has also started to conduct a ‘Financial Freedom Workshop via Cash Flow Game’ for university students and the people. “This will help create awareness for the public on the way to achieve financial freedom and is a way of earning passive income,” the GC Life CEO said.
Insurance companies are a part of the financial sector, thus it is our responsibility to educate people on financial literacy, he said. “As our vision is to inspire and enrich people’s lives, we do hope our actions will influence other players in the financial sector to come together to make a bigger impact in driving awareness,” the GC Life CEO said.
According to the US Financial Literacy and Education Commission, the five principles of financial literacy are to understand your pay and benefits to make the most out of what you earn, save and invest, protect yourself financially, spend properly, and borrow judiciously.
“NBC and stakeholders have been putting great efforts in strengthening financial literacy and consumer protection to maintain the stability of the whole banking system and to increase financial inclusion in Cambodia,” Director General of the NBC’s Banking Supervision Rath Sovannorak was quoted by Xinhua as saying.
Source: https://www.khmertimeskh.com/501250148/financial-literacy-critical-for-growth-meeting-contingencies/