Objectives of National Financial Literacy Program achieved: SBP

KARACHI: The National Financial Literacy Program (NFLP) of the State Bank of Pakistan (SBP) has achieved all the targets for the last fiscal year (FY20) despite the outbreak of COVID-19 pandemic since March 2020.

Financial inclusion has always been a challenge for Pakistan keeping in view the socioeconomic demographics, low income levels, cultural barriers, gender inequality, low literacy levels and presence of informal economy.

The level of financial inclusion in Pakistan up until 2015 was one of the lowest in the world as only 16 percent of the adult population had a bank account and the account ownership was even lower for women at 11 percent. Now, unique account ownership in the country has increased to 66 million with 60 percent active accounts by December 2019. The target of 50 percent accounts has been accomplished well before the deadline of 2020

In order to address the challenge of financial exclusion, the Government of Pakistan adopted a National Financial Inclusion Strategy (NFIS) in 2015 with the aims to enhance formal financial access to 50 percent of the adult population by 2020.

Accordingly, with the core objective to enhance access to finance in the country and encourage usage of formal banking channels, the State Bank of Pakistan took the lead in implementing the measures suggested vide the NFIS and incorporated the same in its Strategic Vision 2020. Among other measures, one major initiative was the launch of NFLP.

NFLP, which has completed its third year at the end of FY20, is SBP's flagship program that is focused on imparting basic financial education to un-banked/underserved segments of population, especially women and youth. Keeping in view the diversity and literacy level of target audience, the NFLP program has been segmented into two components, National Financial Literacy Program for Adults (NFLP-A) and the National Financial Literacy Program for Youth (NFLP-Y).

The objectives of this program are to provide financial education to around 2.6 million beneficiaries over five years, 1 million through NFLP-A and 1.6 million through NFLP-Y with gender mix of 50:50, and to open bank or mobile accounts of the beneficiaries.

Under NFLP-A, despite the prevailing pandemic of COVID-19, 250,000 participants were given financial education during FY20 against the target of 226,000 beneficiaries through almost 10,000 classroom sessions and 300 street theatre programs. This comprised of 70 percent participants located in rural area with significant improvement in female participation (42 percent in FY19 to 57 percent in FY20). The number of participants who opened a bank or mobile account at the end of the session also showed remarkable improvement from 53 percent in FY19 to 83 percent in FY20.

Since the initiation of NFLP-A in August 2017, more than 600,000 adults have been imparted financial education.

Under NFLP-Y, since its inception in October 2018, around 300,000 students have been trained against a target of 240,000 students by end of March 2020. This program envisages imparting of financial education to three age groups, 9-12 years, 13-17 years and 18-29 years, across 45 selected districts of Pakistan.

Copyright Business Recorder, 2020