The precarious nature of being employed during a pandemic has shown many people that saving for a rainy day is a matter of survival, perhaps more than ever before.
Being able to earn, live, save and plan ahead are crucial life skills that every responsible adult must learn – and the journey towards financial literacy begins in the classroom.
Children must be taught from an early age that financial literacy equals financial empowerment: the financial freedom to travel, buy a house, get married and retire comfortably. And yes – to survive when the global economy falls apart.
Yet most school leavers are woefully ill-equipped to manage their finances and plan for the future.
According to a 2019 financial literacy survey by Visa, 43 percent of respondents in the UAE aged between 16 and 24 said they are not ready to manage their own money, while 53 percent said schools didn’t prepare them enough to take care of their finances.
The reality is that schools are not required to include financial literacy in their curricula, so the number is likely to be much, much higher.
These statistics partly explain why the UAE launched a new financial literacy program in November 2020 to equip UAE nationals with the knowledge and skills needed to manage their finances and contribute to economic growth.
The message is clear – individual financial literacy is part and parcel of collective prosperity.
The three-month program called Ghaya (meaning ‘goal’ in Arabic) was developed by the Abu Dhabi government in partnership with the Abu Dhabi Global Market Academy, the London Institute of Banking & Finance and the UAE Banks Federation.
To improve financial literacy and equip tomorrow’s adults with the tools to live their lives as financially empowered individuals, we need to see multi-stakeholder action from the public and private sectors – not just government initiatives like Ghaya.
Yet there are common challenges for all those involved in promoting financial literacy: a lack of resources, credibility, and lack of continuity.
Within the private sector, it is the banks that have the ability (should they wish to) to deliver on all three of these shortfalls.
As a pioneer Islamic financial institution and the largest Islamic bank in the UAE, Dubai Islamic Bank has taken measures to deliver on its responsibility towards engendering a culture of financial education.
Through its partnership with KFI Global – a financial education provider for teenagers and young adults – DIB has created a children’s financial literacy initiative for the next generation of banking customers called #Readyfortomorrow.
The idea behind #Readyfortomorrow is to provide participating schools with the opportunity to receive high-quality financial education crafted to modulate and even challenge the way students think about money.
It teaches young students the basics of money management and the importance that finance plays in our lives in an environment that they are accustomed to – their schools and classrooms.
The initiative is immediately differentiated because it delivers the entire financial education program to participating students, way beyond awareness building.
It sets out to create actual change in the students’ lives through world-class content and engaging discussions.
And this is supported by the overwhelming response that the initiative has garnered from both students and educational institutions since it started in 2021.
As part of the bank’s commitment towards the community, 23 educational institutions have warmly welcomed #Readyfortomorrow, and over 2,000 students, including 300 Emiratis, have benefitted from the program since its launch.
Thanks to the groundbreaking partnership between DIB and KFI Global, thousands of students across the UAE are now setting themselves up for a more financially secure future.
It is fantastic to see so many of the nation’s youth benefitting from the program, and DIB is strategically committed to expanding its work in financial literacy. But the scale of the challenge is so great that much more focus is needed.
Action is needed because, time and again, analysis shows that the Middle East and North Africa (MENA) region has the lowest rate of financial inclusion worldwide.
According to Global Findex 2017, only about 37 percent of adults in the MENA region own a bank account.
Gulf countries such as the United Arab Emirates, Bahrain, and Kuwait feature financial inclusion rates close to 80 percent, while they do not exceed 25 percent in Yemen, Djibouti, Sudan, Mauritania, and Syria.
Not only are these figures of major social and economic concern, but they are disappointing – because the conversation about financial literacy is far from new.
As far back as the G20 Summit in Seoul in 2010, financial inclusion was recognised as one of the main pillars of the global development agenda. It was considered to be of such importance that the leaders of the G20 countries endorsed a concrete G20 Financial Inclusion Action Plan.
Indeed, financial inclusion is a critical enabler for at least eight of the 17 sustainable development goals (SDGs).
Every bank and financial services organisation has a moral responsibility to do their part and act now to give the next generation the tools it deserves to thrive, prosper, and deliver sustained economic growth in a drastically changed post-Covid digital economy. Those that fail to do so fail our children.
Adnan Chilwan, group CEO of Dubai Islamic Bank.
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