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Home Analysis

Money Matters: The High Cost Of Financial Literacy

Under the State Bank-initiated National Financial Literacy Program, the cost of imparting financial training is rather high. However, this cost can be reduced by a good 35 percent if the program is made part of the regular curriculum in educational institutes

Shehnaz Khattak by Shehnaz Khattak
August 11, 2022
in Analysis
Money Matters: The High Cost Of Financial Literacy
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Keeping in view the importance of financial literacy in daily life, the State Bank of Pakistan launched Pakistan’s first ever National Financial Literacy Program (NFLP) in 2017-2018. The main objectives of the program are to impart knowledge and develop skills to manage financial matters. The program was implemented in collaboration with the Asian Development Bank — to promote financial inclusion by spreading financial education for inclusive economic growth and stability across the country.

During the first year of the program, (2017-2018), a total of 4,148 NFLP classroom sessions were conducted across 77 districts of Pakistan against the target of 4,031 sessions. During these sessions a total of 86,994 male and female participants were trained at the cost of Rs26.1 million. The total number of branchless banking and Asaan accounts opened was 43,043, for 26,200 males and 16,843 females.

During the second year (2018-2019), an integrated media campaign was launched for the NFLP through the media. It was planned to conduct street theatre sessions across the country for imparting general awareness about financial services at the grassroots level. Some 162,720 participants were trained at the cost of Rs48.81million.

Based on the overwhelming response of first two theatre programs in 2019, 300 more street theatre programs were conducted at different locations in 2019-2020. This time women participation rate improved to 57 percent from 42 percent. Some 252,000 participants were trained at the cost of Rs101.6 million.

Keeping in view the diversity in level of understanding of targeted audience, the NFLP was divided into two segments in 2020-2021: NFLP and NFLP for Youth.

The State Bank has collaborated with various commercial banks, universities, government departments, institutions and muftis and ulemas. Islamic banking awareness programs were organized, comprising 19 workshops with them, 16 two-day capacity-building programs for its own officials and 26 awareness programs for general public.

A one-time extensive training on financial matters would be provided to secondary school teachers, who can teach financial literacy as part of regular curriculum. This would reduce the expense of imparting financial literacy significantly, i.e. the same number of participants, 865,937, would cost Rs131 per student, around 35 percent less than the cost per participant of the Financial Literacy Program.

During this year, about 362,223 participants were trained at the cost of Rs144.9 million. Till 2021, this project cost Rs321.4 million and provided financial education to 865,937 participants from 158 districts of Pakistan.

Assuming all other costs as zero, the cost of training per participant turns out to be Rs372 approximately for one session. Also it is difficult to understand the financial matters in a few sittings. It requires extensive training.

Better understanding could develop if financial education is imparted to students during their academic years. Introducing a segment on financial literacy at the high school level would better equip our next generation to handle financial matters. Also it would be cost effective. Assuming that two trainers are recruited for each of 158 districts, it would need a total of 316 trainers to be recruited for a one-year contract. Again assuming a fixed salary of Rs30,000 per trainer, it would cost Rs113.760 million for the year.

A one-time extensive training on financial matters would be provided to secondary school teachers, who can teach financial literacy as part of regular curriculum. This would reduce the expense of imparting financial literacy significantly, i.e. the same number of participants, 865,937, would cost Rs131 per student, around 35 percent less than the cost per participant of the Financial Literacy Program.

The NFLP will be concluded this year and has already achieved the targeted level of training sessions and has trained the number of participants higher than expected. A good number of them have joined the banking sector after trainings. The program has been effective overall, however the cost of training is high, which can be reduced if training mechanism is modified and training responsibility is conferred to higher education departments.

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Tags: PakistanfinancemoneyState bank of pakistancurriculumfinancesFinancial LiteracyState Bankschool teachersfinancial education
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Shehnaz Khattak

Shehnaz Khattak

The writer is a research scholar at PIDE, Islamabad.

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The Friday Times is Pakistan’s first independent weekly, founded in 1989. In 2021, the publication went into collaboration with digital news platform Naya Daur Media to publish under a daily cycle.


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