DUSHANBE, April 16, 2015, Asia-Plus — Press release issued by the International Finance Corporation (IFC) notes that the limited financial knowledge of Tajik consumers means more than 40 percent of the population spends all their income and accumulates debt.
To break the cycle, IFC and the World Bank Group Finance and Markets Practice Group have developed a program to educate Tajik consumers on smart borrowing, money management, and financial planning.
According to a recent IFC survey, more than two-thirds of Tajikistan’s population do not properly use financial services, particularly deposits, loans, and accounts. Ninety percent of Tajik citizens have never heard of the country’s credit bureau, and about half never save money. This leads to debt and high default rates and delays home purchases and investment in children’s education, dragging down the economy.
Nearly all survey respondents want help with financial decisions. IFC’s new initiative will help consumers get a grip on their finances, stabilize the financial industry and strengthen the economy.
“Thanks to improved financial literacy, borrowers will avoid over-indebtedness and those individuals who have never used banking services will become interested in them,” said Nathalie Barbancho, Deputy Country Director of the Swiss Cooperation Office in Tajikistan which finances this initiative. “It will also help banks to expand their client base and portfolio quality.”
Educational materials focus on household budgets and personal finance management, and include smart borrowing tips, steps to prevent over-indebtedness, savings strategies, remittance advice, and details on the benefits of credit information reporting. The program is being implemented across the country in cooperation with local partners through banks and microfinance organizations, local TV and radio channels, and at airports.
“Financial literacy is about developing efficient household budgets and making sure people save enough money for productive use,” said Patricia Veevers-Carter, World Bank Country Manager for Tajikistan. “It’s also about understanding your rights as a borrower and making smart financial decisions.”
The initiative is part of the IFC Central Asia Micro and Responsible Finance Project and the World Bank Group Finance and Markets Global Practice’s Central Asia Financial Markets Infrastructure Project, and are funded by the Government of Switzerland.
