Financial Literacy Key to Alleviating Poverty

Financial Literacy Key to Alleviating Poverty, says Sri Lanka's Central Bank Chief

by Zulfick Farzan 21-05-2024 | 3:05 PM

COLOMBO (News 1st); Sri Lanka's Central Bank, together with the UNDP launched the country's first Financial Literacy Roadmap of Sri Lanka.

According to a document released on Tuesday (21) it is observed that there is a major problem in translating the financial knowledge of Sri Lankans into positive financial behaviors.

The Financial Literacy Roadmap of Sri Lanka, developed for the First Time In Sri Lanka provides evidence based guidance to all financial literacy stakeholders to move towards a single policy goal, which is improving the financial behavious of all Sri Lankans and advancing their financial capabilities.

Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, speaking at the event, emphasized the critical role of financial literacy in shaping informed decisions and promoting economic well-being.

"Financially inclusive and literate individuals make informed decisions about savings, investments, and borrowings. They are more likely to understand the impact of multi-policy decisions that we take and respond appropriately in line with the multi-policy stance, contributing to effective policy implementation, that's one part that is linked to the Central Bank objective," he noted.

"The key objective, secondly, is that financially literate consumers will make informed choices and will demand an efficient, transparent and responsible culture from financial institutions, largely that we regulate," added the Governor.

According to Dr. Nandalal Weerasinghe financial literacy can support reducing indebtedness, alleviating poverty and breaking poverty traps.

"This is also an issue that we have been seeing in Sri Lanka. We are in a state of overindebtedness because of the lack of financial education and literacy, and that will also help alleviate poverty and people to come out of poverty. In the long run, this will reduce the burden on the government-funded social security program," said the Governor of the Central Bank.

The policy framework of the Financial Literacy Road Map of Sri Lanka contained the following key areas.