Women’s financial literacy will have long-term implications for society

On the occasion of the official launch of ‘Let’s Talk Money: Little by Little Campaign’, an initiative to empower Cambodian women with a focus on improving and increasing their access to finance and financial literacy, HE Thoeun Sarkmarkna, Director of Women’s Economic Development, Ministry of Affairs, responded to a series of questions posed by the Khmer Times in conjunction with the special edition to mark the dissemination workshop on the implementation of the strategy of financial inclusion 2019-2025. Extracts:


How will financial literacy contribute to the lives of people, especially women?

Financial literacy is becoming increasingly important for all Cambodian families who are trying to stretch and balance their budgets with multiple demands and spending priorities such as food, shelter and education among others. In a typical Cambodian household, it is the woman who manages the daily household expenses and thus bears enormous responsibility for the consequences of her choices such as housework and caring for family members, while at the same time she often supports the male head of the family. household to earn additional income for the family. On the one hand, the growing sophistication of financial markets means that consumers are not only choosing between the interest rates of two different bank loans or savings plans, but rather are offered a variety of complex financial products for borrowing and save, with a range of product options and service providers, especially with the increasing availability of digital finance. According to Neary Rattanak 5 (2019-2023), improving the financial literacy of Cambodian women will have a greater positive impact, not only on households and communities, but on the labor market and the economy in general. Among other things, the Ministry of Women’s Affairs is proud to support the ‘Let’s Talk Money: Little by Little’ campaign, as it highlights the benefits of shared financial decision-making between men and women in the family, to through a 4 part video drama series that is both entertaining and educational. When women are educated and skilled in financial matters, they are more likely to pass it on to their children and other members of the community.

Do Cambodians know how to manage their money effectively and efficiently?

A working paper released by the Asian Development Bank Institute (ADBI) in 2017 suggested that Cambodia’s overall financial literacy score is 11.5, which is in the lower end of the range compared to to the 30 countries where the OECD / INFE International A survey of adult financial literacy skills was conducted. The paper further cites four key determinants / influencing factors for financial literacy: education level, income, age and professional status (employment). These four key determinants of financial literacy all relate to significant issues and barriers that women in Cambodia continue to face, and it is not surprising to know that Cambodia has a lower rate of financial literacy than in Cambodia. ‘other countries. An example of these challenges is that Cambodian women continue to earn, on average, 19% less for the same job as men. It is about women’s equality rights, and more specifically the right to equal pay for equal work – but it is also about the possibility of creating a more effective and efficient labor market for the benefit of women. Cambodian economy and society, as quoted in a report launched by the UNDP in March 2021. This is one of the reasons why the new campaign “Let’s talk about money: little by little” offers awareness training sessions financial support to 1,000 garment workers. Another important issue relates to society’s expectations of women / girls in household chores and care, alongside the expectation of supporting family income generation as well.

Why a majority of Cambodians do not yet have a bank account?

Financial inclusion has become essential to meet the country’s economic growth, reduce inequalities and reduce overall national poverty rates. Access to finance has become an essential policy tool for national and global policy makers. As segments of the population are excluded from access to finance, there is a potential loss of deposits or savings and investable funds capable of enhancing credit creation and capital accumulation, resulting in loss of funds. ability to generate socio-economic development. However, many Cambodians still do not have an official bank account, especially those residing in the countryside and in hard-to-reach areas. This is also and especially true for women across Cambodia. Reasons for financial exclusion include, for example, low level of financial awareness, literacy and skills, physical accessibility, low level of income and the ability to meet the demands of the service provider. First, the ability to interact with and process information about financial services / products is an important precursor for efficient and informed use and decision-making related to financial services / products. Cambodia has a financial literacy rate of 18%, which is quite low compared to other countries in the region. This rate implies that the wider population has limited access and / or less capacity to engage in financial services / products. The distribution contact points of formal financial service providers are primarily centered near key markets in urban areas and use a number of channels to distribute their services through branches, ATMs, point-of-sale and banking services. electronic devices, which is difficult to achieve for the population concentrated in remote areas. areas.

What must be done to promote financial literacy?

Being financially literate simply means having the ability to understand and effectively apply a variety of financial skills to make informed financial decisions and choices, including, for example, on personal financial management, budgeting, saving and investing. investment. This foundation and these basic knowledge and skills are extremely crucial not only for families and family well-being, but also for individuals, communities, society and the economy. Additionally, financial literacy helps people understand financial products and services, and this understanding builds their confidence and ease in using the product appropriately to meet their needs. In addition, financial literacy promotes informed planning and budgeting for personal finances. Second, more financially literate individuals will increase the number of financial accesses and uses, and the more people understand financial products / services and know about financial information, the more likely they are for formal financial inclusion. Finally, it helps to enhance safety and promote public confidence in the financial system. A final but major benefit of financial literacy, and in particular women’s financial literacy, is that it contributes to the well-being of women and can lead to greater investments in human capital and can have a significant impact on children’s health, nutrition and education, with important long-term implications for families and society.

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Louis R. Hancock