Sustainability and progress in an increasingly competitive world is largely dependent on the capability and performance of the individuals in a society. Countries that have trained and enabled a majority of their citizens to meet the standards and demands of modern societies have generally performed well in the global community. The process of managing a nation begins by enlightening the common man to efficiently manage his household.
Effective social management empowers and enlightens the masses to plan their lives well and ensure economic sustainability for themselves. Competence and literacy breeds self-reliance and confidence, as the masses gain a respectable stature. Such evolved communities are fully aware of their skills, rights and responsibilities.
Because of several decades of apathy towards literacy and skills development among the rural and underprivileged segments, Pakistan is facing numerous challenges today and is at the cross roads where we have to quickly and accurately select the most viable path for robust progress.
Since almost 70 percent of our population dwells in the rural areas that are devoid of modern day social structure, it is critical to educate this sector and improve their capabilities by nurturing a progressive attitude among them. Providing quality education across these vast rural expanses might appear to be a tall order, but there are several methods of strategically promoting the basic and essential skills with literacy programs in towns and villages that hold commercial significance.
Such programmes can be supported through public-private partnerships or by the global community. For instance, the government can encourage basic financial literacy among the rural populace to enable them to make effective commercial and economic decisions. Through basic training and literacy, the under-privileged villagers can also transact and invest wisely, by keeping in mind the principles of value-addition, profitability, sustainability, productivity of capital and time-value of money.
Our low literacy rate has been one of the reasons why any local, international or agricultural bank finds it difficult to promote its services and explain to the small farmers, the advantages of modern banking and financial understanding. There is much about life in rural Pakistan that has not changed for hundreds of years. People living in the countryside, have not been able to create the basic facilities for themselves like; clean drinking water, proper drainage, electricity, education, health care etc.
Due to lack of awareness about the modern methods of optimising the productivity of capital, the farmers hesitate to take loans from the banks, and depend on their old patterns of saving money in pillows, underground pots and other age-old traditions.
In Pakistan, the rural credit market primarily consists of informal providers of credit which include professional money lenders, financial assistance from friends and relatives, village shopkeepers and commission agents etc who usually charge extremely high rates of mark-ups on loans. Due to these primitive financial management practices, generations of small farmers are forced into working without remuneration, simply to pay off the high interest on loans or mortgages provided by the big landlords.
Keeping in view that 33 percent of Pakistan's population lives below the poverty line, the poor community is prone to consume a greater part of its output. They focus on a small amount of money to such an extent that they miss opportunities to save or make large amounts.
To overcome such challenges, rural social networks can be created where rural and remote communities can meet to discuss and resolve their common issues. These people simply need advisory help and occasional support to remove unnecessary barriers that restrain their development. A few changes in their habits and a little more awareness can revolutionise their lives. They just need a little encouragement to make their savings and investments more fruitful and secure. The recent floods across Pakistan caused the poor villagers to helplessly watch their lifetime savings being washed away from their houses. If they had kept this money in a bank, it would have remained safe, secure and accessible.
Farmers should be encouraged to invest in a farm mechanism, use of tractors, threshing machines, deep boring and irrigation pumps. To enable them to purchase such inputs the rural credit system should introduce a micro-finance system and self-help groups. Thus a basic form of financial support becomes easily available for all.
Special schemes can be introduced to support regional craft businesses, by collectively branding and marketing their products. This will allow rural areas to maintain high growth in craft industries, which form an integral part of their cultural heritage.
These rural projects will enable local people to participate in community development by pursuing sub-projects and smaller scale activities on a local level. Some rural areas can also promote their serenity and highlight their natural ambience to increase tourism. This way, the rural poor can be encouraged to prioritise their needs and decide how best to manage common resources.
A strategic initiative for financial literacy is the most essential need for the progress and development of Pakistan. The government, along with banks and international donor organisations can promote saving habits among rural farmers and bring the rural masses into the mainstream financial channels. Effective training, education and awareness campaigns should focus on financial planning, household budgets, Family planning, communications, community involvement and other important aspects of life.
It is heartening to note that recently the Asian Development Bank has collaborated with the State Bank of Pakistan to initiate a "Nationwide Financial Literacy Program" (NFLP) across Pakistan. It aims to impart knowledge among the masses about the basic financial concepts such as budgeting, savings, investments, debt management, financial products and branchless banking. The pilot phase will target about 50,000 beneficiaries, with a strong focus on the low-income groups of society.