Written by Sanath Nanayakkale
Barriers to financial inclusion have been a long-standing issue in Sri Lanka, as financial literacy has traditionally been the privilege of only the country’s wealthy.
But ultimately, the Central Bank of Sri Lanka, 40 other national institutions, the country’s public and private sectors, as well as the United Nations Development Programme (UNDP) and the International Finance Corporation (IFC) are working to spread financial literacy among the general masses of the country so that financial literacy does not remain an exclusive right but rather enables citizens to achieve financial freedom.
This was revealed during the launch of the Sri Lanka Financial Literacy Roadmap (2024-2028) by the Central Bank of Sri Lanka on 21 May 2024.
The roadmap, developed based on the financial literacy and capacity building pillar of the National Financial Inclusion Strategy (NFIS), explicitly incorporates a set of actions proposed by the United Nations Development Programme and the International Finance Corporation (IFC), which were outlined by Central Bank Governor Dr John Johnson. Nandalal Weerasinghe has been a key partner in rolling out the roadmap.
Introducing Sri Lanka’s financial literacy expert, Beewise, on Sri Lanka’s first Financial Inclusion Roadmap, the multi-stakeholder knowledge tank explores two aspects that lead to financial inclusion in Sri Lanka: Promote knowledge, skills and attitudes of the general public.
“Honeybees, skilled in foraging for and utilizing resources, reflect the value of knowledge to navigate day-to-day life prudently. Their skill in collecting nectar and producing honey reflects the practical skills needed to manage finances, budgeting, savings, investments and debt. And that is why we refer to the analogue of honeybees in this context,” said Azusa Kubota, UNDP Resident Representative in Sri Lanka.
“One of the mandates given to the Central Bank is financial inclusion and our efforts towards this national agenda are strengthened and supported by the United Nations Development Programme (UNDP), the International Finance Corporation (IFC) and members of the National Financial Inclusion Council,” said Dr Nandalal Weerasinghe, Governor, CBSL.
He further added:
“Financially literate people make informed decisions about saving, investing and borrowing. They better understand the impact of the monetary policy decisions we make and respond appropriately in line with the monetary policy stance. , is likely to contribute to the implementation of effective monetary policy.”
“Second, there will be no need to constantly regulate financial institutions because financially literate consumers will make informed choices and demand an efficient, transparent and accountable culture from financial institutions. Financial literacy increases public trust in the financial system by helping individuals understand how it works. This understanding is crucial for citizens to make financial decisions. Moreover, financial consumers will be empowered to protect themselves against financial fraud, which is on the rise with new technologies. More importantly, financial literacy helps reduce over-indebtedness and alleviate poverty.”
“Informed access to financial services allows people to better manage their finances, save for the future and invest in opportunities that benefit them. In the long run, society It reduces the burden on the government in terms of providing security and improves people’s living conditions. Financially literate people can rise out of poverty by making their own financial decisions. The Aspects therefore advocate for equipping future generations with the financial skills they need to be financially resilient when they reach adulthood. It’s important to learn.”
“An investment in financial literacy is therefore an investment in higher social and economic returns. Therefore, there are clear social and economic benefits from financial literacy in any country. Against this backdrop, the Central Bank of Sri Lanka is striving to improve the financial inclusion environment in Sri Lanka through various initiatives.
“The National Financial Inclusion Strategy, which the central bank will introduce in 2021 with the cooperation of all stakeholders, is currently in the implementation phase. This is an important milestone. The CBSL is empowered to formally promote financial inclusion. This roadmap is an evidence-based policy aimed at positively changing financial behavior for the well-being of ordinary citizens in Sri Lanka. It provides a framework.”
“Thirdly, to ensure consumer protection, it is important to cultivate careful consumers. Overall, the implementation of this roadmap will be critical in realizing Sri Lanka’s financial inclusion aspirations. It will be,” he said.
