Who does not want to be both spenny-wise and money-wise? But whenever our great authors and philosophers speak of money and finance, they fall into aversion, dislike and often make a moral lecture in the end. You might think that money and planning about finance is the worst sort of crime mankind ever invented. Think of Shakespeare for example. On many occasions, Shakespeare inserted wise words about money, gold and borrowing in the mouth of his characters – both for good and bad. We can recall how the foolish old Polonius wisely said: “For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.” While Shakespeare never got tired of showing how borrowing makes you for every poorer, in his real life, Shakespeare paid off all the debts on behalf of his own father and kept the good name of his family in the town of Stratford-upon-Avon. But, we shall return to Shakespeare later on. Let’s take a look at our great poet Rabindranath Tagore, who often had to silently bear the reprimand of the rest of the world for not being poor enough.
If you are a writer of any value, then make poverty your virtue – goes the general opinion. Unfortunately, Tagore was not to grind his teeth in poverty since he managed his estate very well indeed and was famous for his management of his financial affairs. Tagore was also one of the pioneers who floated the idea of a rural bank in the early twentieth century, when banking was an unheard of institution in this part of East Bengal. Tagore singlehandedly built Shantiniketon, one of the greatest educational institutions of modern times. It was probably Marx who had a lover’s quarrel with money and finance. One of the greatest theorist of money and capital accumulation of the modern times, Marx was not known for his efficient management of financial affairs. For this he was always dependent on pawning personal belongings, borrowing, and maintaining a life of extreme hardship. Marx was an avid reader of Shakespeare’s plays. Marx loved his favourite poet so much that he quoted full-length dialogue from Shakespeare’s Timon of Athens and used this quote on money for his famous Economic and Philosophical Manuscripts of 1844. Marx wanted to show the corruptible impact of money on morals.
Ironically, throughout his entire lifetime, Marx was financially dependent on his capitalist friend Frederick Angles, who owned a number of textile mills in England and Prussia. But gone are the days of Marx and Shakespeare. We live in a time when one must be familiar with the financial rules so that one can make the best opportunities. We no longer look on borrowing in the way the nineteenth century or sixteen century writers viewed money. We live in a world where not knowing where you belong in the complex web of financial relations, can bring unnecessary hardship for you and your country. Today an individual’s personal wealth is penetratingly linked with national growth and societal welfare. Today, our economic wellbeing and financial circumstances are so much interconnected that we can no longer guard our morality by referring to the “abstract” amorality of money, which Shakespeare talks of in Timon of Athens: “… most operant poison. What is here? Gold? Yellow, glittering, precious gold? No, gods, I am no idle votarist.
Roots, you clear heavens! Thus much of this will make Black white, foul fair, wrong right, Base noble, old young, coward valiant.” Enter the World of Financial Literacy In spite of what the giants of literature, philosophy, or history say about the corrupting effect of money, none of them even uttered a word against what we know as Financial Literacy, or the skills and knowledge that an individual possesses to make sound financial decisions. The working definition of financial literacy for PISA 20121 is as follows: “Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.” The most probable dimensions of financial literacy are financial knowledge, financial behavior and financial attitude. Financial literacy has been a national issue all over the world where governments had been engaged in finding innovative ways to make their citizens good financial planners. It is because, the cost of low financial literacy rates is very high in any modern society where wealth and capital accumulation is directly proportional to financial literacy of the generation. It is very important to note that financial literacy is a desired behaviour in a free market economy where individuals are in full charge of making all financial decisions.
Financial literacy will be somewhat redundant under a planned economy where individuals do not enjoy any freedom in financial decision making. Given Bangladesh’s unique position as an emerging economy with a large internal and high-growth economy, financial literacy is one of the most important social education project we need to initiate. Financial literacy for Bangladesh should be an inclusive project where pro-poor policy initiatives should take precedence over short-term development goals. Yet, it has been noted by economists and policy-makers all over the world that Bangladesh offers a development paradox, where a comparatively high-growth economy runs alongside a growing number of the unemployed. The secret to this apparent dichotomy can probably be found in the fact that over the past two decades we have witnessed a growing interest in financial literacy among a young entrepreneurial population. Financial literacy in Bangladesh
Some of the most visible aspects of financial literacy in Bangladesh economy in the past two decades came in the form of inclusive financial service development. In the past two decades more people have gained access to banking services, school banking was introduced, and savings certificates gained popularity because of its high profitability. As more and more people now enjoy access to SME loans, growth-sector targeted government incentives, internet based financial services, and innovative financial products and services such as mobile banking, people are now able to make financial decisions with speed and efficiency. However, it must be acknowledged that for Bangladesh we need a far more articulate financial literacy program instead of developing this important policy through tidbit ad-hoc activities. There are several studies which claim that micro-finance has had a far-reaching impact in introducing financial literacy among the rural population. For this reason, it is high time the government, especially the central bank, adopts a financial literacy agenda that can be optimized by micro-financing institutions as well as by traditional financial institutions that operate on national and international financial activities. It should be borne in mind that financial literacy can have a three-fold impact on the economy – individual level, institutional level, and national level. Financial literacy needs to be instilled in the young minds through programs such as school banking, but at the same time we also need to recognize certain sectors which are not generally recognized as part of formal economy. One such sector is household activities, farm activities, and domestic services provided by women. Therefore, it needs to be understood that that financial inclusiveness also depends on recognition of women’s economic and social rights.
Financial literacy is knowledge about personal management of finances. It gives the twin benefit of protecting from financial frauds as well as planning for financially secured future. Financial literacy gives consumers the necessary knowledge and skills required to assess the suitability of various financial products and investments available in the financial market. Bangladesh has taken some initiatives to improve financial literacy, but more needs to be done in a much concerted way. Financial stress could be related to many social issues such as unemployment, large families and poor economic conditions. Stereotyping non-business major students as having a lower level financial illiteracy can be seen as being harsh especially when these students may not necessarily be financially knowledgeable in all aspects of financial matters. It was observed that individuals with higher income bracket are more financially knowledgeable and therefore, it can be concluded that financial literacy leads to higher income. Therefore, we need to understand that financial literacy does not always depend on academic background. If we want to achieve the SDG goals within the stipulated time frame, we have no other option but to adopt a national financial literacy policy framework, which will provide general and specific guidelines for institutions and businesses to formulate their own policies. Only then we can ensure equitable distribution of wealth in a democratic society.
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