DUSHANBE, February 20, 2015, Asia-Plus — The World Bank Group, together with a number of financial institutions, today launched a comprehensive national financial education program to combat low levels of financial literacy and growing concerns about over-indebtedness.
According to the International Finance Corporation (IFC) Office in Dushanbe, the initiative, which will be delivered across a variety of channels including television and radio, will help Tajik individuals and households learn how to better manage their money, develop sound financial skills, and foster stronger banking relationships, as part of wider efforts to increase access to finance in the country.
Recent research on financial literacy in Tajikistan carried out by IFC, a member of the World Bank Group, revealed that more than 40 percent of respondents spend all their income, while only half make regular savings. In addition, 83 percent could not explain basic banking terms, about 90 percent had never heard about the credit bureau, and only about 40 percent would agree to provide their credit information to the credit bureau.
“Improving financial literacy will help further develop the financial sector, spur entrepreneurship, and increase general well-being, so it is vital for economic growth and the healthy development of our economy. We are confident our joint efforts will help more people become financially literate and improve their financial health,” said Izatullo Lalbekov, Chairman of the Association of Banks of Tajikistan.
“Empowering consumers is a prerequisite for an efficient and transparent financial market. This is especially important because of Tajikistan’s developing financial system and current poor levels of financial knowledge and skills,” said Rolf Behrndt, World Bank Group Finance and Markets Global Practice Manager. “This initiative should help increase formal savings and promote responsible financial behavior in Tajikistan.”
The program includes educational materials on household budgets and personal finance management, smart borrowing rules, preventing over-indebtedness, savings strategies, managing remittances, and the benefits of credit information reporting.
The initiative is part of the World Bank Group Finance and Markets Global Practice’s Central Asia Financial Markets Infrastructure Project, which aims to strengthen the financial infrastructure in Tajikistan. The project is funded by the Government of Switzerland.
The World Bank Group is one of the world”s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.
Within its Cooperation Strategy for 2012-2015, Switzerland focuses on four sectors in Tajikistan: Health, Rule of Law, Water Supply and Sanitation, and Private Sector Development. The overall goal of the strategy is to support Tajikistan’s transition process by contributing to economic development and helping to build institutions and systems that are responsive to the population’s needs.
