Annual Conference

2019
Financial Inclusion, Financial Literacy and
Fintech

SESSION V
EFFECTIVENESS OF FINANCIAL
EDUCATION – CASE STUDIES IN ASIA

Malaysia Case Study

LIM Hsin Ying
Consumer and Market Conduct Department
hylim@bnm.gov.my
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute
(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

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 Why financial literacy matters

“Living within one’s means and the practice of

moderation are essential values to lead healthy,
productive and fulfilling lives”

“…equipping Malaysians to be financially capable is

as important as mastering the ability to read, write
and count”

“For Malaysians to live well and contribute

productively to the building of a resilient and
inclusive economy, they need to be financially
literate.”

Excerpts – Message from the Prime Minister of Malaysia

Tun Dr. Mahathir Mohamad
National Strategy for Financial Literacy 2019 – 2023 Report

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 2015 - Measuring financial literacy

2015-2016 International survey on

adult financial literacy using
OECD-INFE toolkit
• 30 countries, including 17 OECD
members
• Involving 51,650 adults aged 18 to
79
• Maximum score of 7 for knowledge,
9 for behavior, 5 for attitudes.

Malaysia, ranked 24th

• Malaysia’s average score [12.3] <
ALL Countries [13.2] < OECD [13.7]
• Score for each component under
65% of maximum component score
• Knowledge weakest component
< attitude < behavior

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 2015
2015 - Measuring financial literacy

Source: Financial Capability and Inclusion Demand Side Survey 2018, BNM

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Empowering financial consumers a key desired outcome Strategies: The last decade
in the Bank’s Financial Sector Blueprint 2011-2020

1 Promote FE as essential life skill from an

early age Financial Capability Programmes
(FCP) throughout life stages
2 Financial capability programmes available
at all life stages for adults 1 2
FE in FCP for
schools adults
3 Establish robust Assessment Framework
to measure progress
Enabling infrastructure:

4 Wide public access to relevant and 3 4

credible information to support informed Assessment Access to
decision-making Framework information

5 Strengthened cross-sector collaboration

through FE Network
5 FE Network

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 Strategies: The last decade
The Bank’s Structure, Initiatives and Achievements

Karnival Kewangan (Financial Carnival)

Consumer and Market Conduct
• Financial conduct authority, FTFC
• Risk, policy, supervision, enforcement
• Financial capability surveys &
strategies, FEN Secretariat
BNMLINK & Regional Offices
• Customer service, advisory,
complaints management
• FE implementation, FEN partner
Development Finance & Inclusion
• Access to financial services by
MSMEs and vulnerable groups
• ‘Edutainment’ exhibition to elevate public awareness
on financial matters, improve financial literacy
• Public-private initiative conducted nationwide
Key Small Financial Inclusion Programmes
Initiatives • Targets rural underserved
communities nationwide
• Improve financial literacy and inclusion
Financial Education Sessions
• FE awareness for civil servants
Implementers • Train-the-Trainers/Counsellors
FE by Trained Counsellors
• FE awareness for civil servants by
trained counsellors
Achievements Online Personal FE Module (EPSAR)

• FE implementation partner 2016 - 2019 • Accessible online by all civil servants to

promote personal financial management skills
• 2-hour module, topics include
money management, loans, credit ratings, scams

 13 financial carnivals, outreach to over 217,000 people (2017 to 2019)

 477 Small Financial Inclusion programmes, outreach to over 77,000 civil servants (Up to 2017)
 439 FE Sessions for civil servants, over 42,000 civil servants trained
 1,000 FE Sessions by trained counsellors, almost 40,000 civil servants trained
 Over 1,500 civil servants enrolled on EPSAR since August 2018

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Elevate financial capabilities, promote financial well-
being of Malaysians through awareness and education
Formed in November 2016
In line with Rec. 5.2.2 of the
Bank’s Financial Sector
Blueprint
Membership
Founding members : 7 agencies
(BNM, SC, MOE, AKPK, PIDM,
EPF, PNB)
 committed to drive the financial
education agenda as part of its
mandate
 have resources and expertise
 direct reach over target groups
and the masses
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Strategies: The last decade
Governance Structure
Two-tiered governance framework
High Level Inter-Agency Steering Committee
(HLSC)
• Co-chaired by BNM and SC
• Platform for strategic and policy coordination
Working Group (WG)
• Co-chaired by BNM and SC
• Reports to HLSC
• Drives policy formulation, implementation
and collaboration
Supported by FEN Secretariat
 Strategies: The last decade
FEN Members, Initiatives and Achievements
Integration of FE elements in school curriculum
since 2014
• 6 financial literacy elements integrated into subjects at
primary and secondary school level

Bank Negara Malaysia (BNM) InvestSmartR by SC

Key • Investor education programme to
Securities Commission Malaysia (SC) Initiatives promote informed and self-reliant investors
• Flagship exhibitions, seminars, website,
Ministry of Education (MOE) mobile apps, TV, radio & social media

Credit Debt Management and Retirement Advisory Services by EPF

• One-on-one financial and retirement
Counselling Agency (AKPK)
FEN Founding planning services
Employees Provident Fund (EPF) Members FE Initiatives by AKPK
• Public/employee wellness prog.
Malaysia Deposit Insurance • Financial Literacy Symposium
Corporation (PIDM) • Social Enterprise Literacy

Permodalan Nasional Berhad (PNB) Achievements for Youth (SELFY)

Government-linked investment management 2016 - 2019 FE Initiatives by PIDM
company • Awareness campaigns, briefing sessions,
outreach activities
• Community programmes, corporate outreach,
 Almost 5 million students aged between 7 to 17 equip with basic industry briefings to member institutions
financial literacy skills
 Investor education and financial planning to almost 2 million through Investment Education by PNB
InvestSmartR and PNB programmes • Annual exhibitions, seminars and
 189,000 individuals received financial and retirement advice school clubs to educate public on
 4.1 million provided credit debt management and counselling services unit trust investments, risk & return,
 78,000 educated on importance of deposit insurance financial planning

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 Financial literacy of Malaysians across all ages and 2018 - Measuring financial literacy
life-stages need attention
Financial knowledge & capability Personal Financial Management

1 in 3 Malaysians rate themselves to be 76% have a budget but 2 in 5 find it difficult to

have low financial knowledge
keep to the budget

84% who claim to save regularly do so only for

92% Malaysians have deposit products but less take-up immediate term i.e. typically withdrawn at month-end to
on investment products cover daily subsistence expenses

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In
43% of Malaysians understand that the growth of money believe they are not disciplined in managing
is compounded over time while 22% believe that money 10 their finance
grows in linear basis.

Dealing with financial difficulties Preparing for retirement Awareness on Risk and Returns

10% can survive more 41% rely on their EPF Unrealistic

savings as the main source of expectations
than 6 months if lose income on the
income for retirement
potential
returns from
Almost half of Malaysians not
52% have difficulty to raise confident of having an adequate
investments

RM1,000 as emergency funds stream of income for retirement

Source: MALAYSIA National Strategy for Financial Literacy 2019-2023 Report

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 2018 - Measuring financial literacy

Source: Financial Capability and Inclusion Demand Side Survey 2018, BNM

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 Strategies: 2020 onward
National Strategy on Financial Literacy 2019 – 2023

 5-year roadmap to improve

collaboration and effectiveness

 Formulated by Financial Education

Network – BNM, SC, MOE, PIDM,
AKPK, PNB, EPF

 Financial literacy agenda to be

incorporated in 12th Malaysia Plan
2021 - 2025 to ensure sustained
nationwide efforts

• Focus on outcomes, not

just outputs
• Enhance effectiveness,
improve literacy, influence
behaviour
• Widen outreach – digital,
collaboration

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 Strategies: 2020 onwards
Focused approach to enhance impact and outreach

Strategic Priority 1: Nurture values from young

 Expand financial education fundamentals into the curriculum for pre-school, primary and secondary
schools
 Reinforce financial education through co-curriculum activities
 Introduce capacity development and support for teachers
 Encourage financial education advocates among students, parental groups and the community

Strategic Priority 2: Increase access to financial management information, tools and resources
 Make basic financial education information easily understood, available and accessible to all
 Heighten awareness and intensify financial education initiatives through nationwide outreach
campaigns

Strategic Priority 3: Inculcate positive behaviour among targeted groups

 Impart financial knowledge to promote positive financial behaviour among the youth
 Encourage financial education at the workplace to promote financial resilience, which will have
positive impact on employees' productivity
 Foster good money management practices through community-based financial education
 Equip the self-employed with financial knowledge to encourage self and business sustainability

Strategic Priority 4: Boost long term financial and retirement planning

 Promote use of innovative guides and tools to improve long-term financial planning
 Create awareness and promote the benefits of seeking professional advice on financial planning
 Promote voluntary savings channels and platforms to encourage income diversification
 Educate Malaysians to make long-term financial plans for retirement

Strategic Priority 5: Building and safeguarding wealth

 Promote better understanding of risks and returns to build wealth
 Improve awareness on the innovation of financial products and services and its implications
 Raise awareness on financial scams and fraud
 Develop and publish materials relating to sophisticated financial products and services
End of Presentation,
Thank You.

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