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Innovations In Financial Literacy and Consumer Empowerment – A Malaysian
Experience
Nirmala Supramaniam
AKPK
2
Contents
• Introduction
• AKPK
• Challenges
• Innovation
• Conclusion
Contents
Private consumption
has strengthened
Increase in level of
household indebtedness
Household indebtedness
remains within prudent level
Household sector NPL
Despite prudent lending and borrowing, there are cases where consumers are unable to meet financial obligations
3
Background
Establishment of AKPK
Credit Counselling and Debt Management Agency
(popularly known as AKPK) was set up by Central
Bank of Malaysia in April 2006 part of the
Framework for Consumer Protection in the Financial
Sector Master plan to provide credit counselling
and financial education as well as debt management
services to individuals
6
AKPK’s Objectives
7
• Provide an avenue for individual borrowers and
potential borrowers to seek advice and assistance in
managing their credit through financial education,
counselling and specific advice services
• Promote a sound and robust banking system by
facilitating debt repayment efforts and minimising
incidences of non-payment arising from bad debt
management
8
Debt
Management
Program
(DMP)
Financial
Counselling
Scope of Services
- One-to-one counseling & advice
- Assistance in analyzing financial situation & identifying options available
- A personalized programme
- Review fin. condition & tailor solutions
- Ongoing counseling and education
9
Description %
Poor financial planning 22.6
Failure/slowdown in Business 16.5
High medical expenses 15.1
Lost control on usage of credit cards 11.1
Lost job/retrenched 9.9
High cost of living 6.5
Others 6.0
Unexpected financial commitment 5.6
Not stated 4.8
Death and/loss of breadwinner 1.1
Failed investment 0.9
TOTAL 100
Financial Literacy
Financial Education Programme
- Public Briefings
- Infusions
- Online Learning Portal
21,376
2011
117,943
2012
231,175
243,661
1,936,994
2013
2014
93,419
2015 Jan - April
677,110 Financial Awareness
Programme
- Website
- Facebook,Twitter, E-
newsletter
- Press,TV,Radio
- Theatres
11
Financial Education Programmes
Personal Financial Management
- Why Everyone Needs Financial Planning - Borrowing Basics
- Power From Your Money - Living Your Life
- Financial Products and Services - Getting Out of Financial Trouble
- Building Your Wealth
- Planning for Uncertainties
POWER! Managing Debts Effectively
- Cash Flow Management - Managing Debts
- Borrowing Basics
- Wise Usage of Credit Card
- Buying A Car
- Buying a House
Delivery Method were
mainly classroom
facilitated methods –
trainings were on
request basis
12
Challenges
Issues Actions
Engaging
Consumers
• How to best engage consumers in
Financial Education
• What type of information is needed
• Delivery method
• Study consumers need
• Develop programmes to suit target
group
• Multiple channels of delivery
Huge Target How to reach more people quickly
and effectively
• Involve private, public sectors and
NGOs through collaborations
• Awareness of Financial Education
through media
• Train of trainers
Entrenched
attitude and
behavior
How to make people practise &
internalise what they have learnt?
• Form focus group to continue
monitoring
• Develop attitude changing
programs
Assessment How to measure achievement? • Pre and post studies
• Impact Studies
13
Engaging Consumers – Major Concerns
Students ( 18-25 years)
Adults ( 20-45)
Entering workforce, Starting
and Raising a Family
Lack of awareness
issues
Education Debt
Rising trend of young
adults getting into financial
difficulty as result of
lifestyle pressure & lack of
financial management
skills
• 7.9 mil (household <
RM4,000) under BR1M
• Malaysia’s household
debt increasing @
86.8% of GDP - driven
by property & motor
vehicle loans
• MDI - Bankruptcy Statistic (2012)
Those declared bankrupt are getting
younger
‒ Age 25 – 44 = 56.9%
‒ Age 45-54 = 29.1%
• AKPK DMP Statistic (May 2014)
‒ Age 20 - 30 = 17.1% (n=17,096)
‒ Age 30 - 40 = 39.8% (n=39,811)
‒ Age > 40 = 43.1% (n=43,048)
14
Retirees > 40
HSBC Survey (2012)
• 43% of respondents inadequately prepared
• 10% not prepared at all for retirement
• Biggest fears were financial hardship (68%)
and poor health (59%)
• Biggest obstacle to save
- Cost of living (50%)
- Buying house (48%)
- Children’s education (33%)
Retirement issues
• Malaysians expected to live 20 more years after
retirement
• May not provide sufficient retirement funds and
ability to sustain through retirement
• Retirement age increased to 60 - help to have
enough savings (not earning enough )
• 54.8% of 45-59 age group are self employed -
presumed without pension or EPF
Engaging Consumers – Major Concerns
Life
Stage
School Tertiary
Education
Entering
Workforce
Starting a
family
Raising a
family
Retirement
Exa
mp
le o
f L
ife
Eve
nts
• Opening an
account
• Getting a part-
time job
• Taking study
loan
• Acquiring
credit card
• Buying a car
• Pursue Hobby
• Providing
guarantee
• Planning for
marriage
• Honeymoon
• Buying a
house
• Getting baby
• Insurance
• Children’s
education
• Planning for
Retirement
• Family Holiday
• Change job
• Managing
retirement
fund
• Estate
planning
Common Elements: Essential financial skills and knowledge
Budgeting Saving
Spending Managing
debt
Investing Managing
risk
Rights &
Responsibilities
Products &
services
Unexpected Life Events includes losing job, untimely demise and receiving a windfall
18 – 25
years
20 -30
years
25 – 45
years 25- 45
years
> 40 years
Consumers Need
16
Topics
Cash Flow
Management
Borrowing
Basics
Managing
Debts
Managing
Risk
Investment
Retirement
E-Payment
Credit
Card
Buying Car
Buying
House
Huge Target – Delivery Mechanism
17
When?
Who & How?
> 10% < >>>>> 70% <<<<< >> 20% << Tertiary Education
18 - 25
Entering
Workforce
20 - 30
Starting & Raising
Family
25 – 45
Retirement
> 40
Delivery
Method
Facilitator Assisted
Learning (FAL)
• Briefing/talks (by
AKPK & outsource
speaker)
• Training of Trainers
(ToT)
• Booklet
FE embedded in HEI
learning curriculum
• As part of soft skills
modules
Facilitator Assisted Learning (FAL)
• Briefing/talks at workplace, seminars, road show, etc. (by AKPK &
outsource speaker)
• Training of Trainers (ToT)
Self-Directed Learning (SDL)
• Media – Newspaper, Magazine, TV & Radio, Webinar, Video clip promo,
Social media (Facebook, Twiter) & YouTube
• Website – OLP (E-learning & Mobile Apps)
• Publications – Books, Pamphlets
Collaboration with stakeholders
• Collaborate with industry players on specialised modules
• Develop product to use by third party to deliver and assess the outcome
“Help to Cope Approach” (For customer who wants to learn certain
subject urgently)
• Dedicated FED specialists within Call Center Unit to provide real-time
consultation or coaching on specific topic
18
Entrenched Attitude and Behavior –
Focus Group
Identify a group of 5 to 10 members
Financial Assessment (Pre)
Financial Education
Monitoring over a period of 3 – 6 months
Financial Assessment (Post)
OBJECTIVE : To assess the
change in financial behavior
of the selected focus group in
managing their cash flow and
increased savings
19
Case Study – Amanah Ikthiar Malaysia
- Provide Financial
Education for the
AIM members and
students,
monitoring the
progress of
behavioral change
AKPK
educated 25
members of
AIM on
Financial
Education
AKPK
educated 86
students of
Taylor’s
University
The students
used the
guidance and
guided the
AIM members
Members
learned on
improving
their
saving
and
increased
their
income
Students –
learned
hardship and
the value of
money- hands
on experience
20
Case Study – Tamil Foundation Tamil Foundation
provides a 10
module to assist
parents on assisting
their children’s
development
AKPK’s Financial
Education Module was
one of the 10 modules for
the parents
A group of 10 parents
were taken in as focus
group and their cash flow
were monitored over a
period of three months
Parents
guided
their
children
The children’s academic
results improved
Parents were able to
concentrate more on their
children as financial issues
were better managed
• Focus groups
– specific target group
– behaviour change
• Online surveys
– Pre and post questionnaire
• Supervisory visits
– Effectiveness of module and
trainers
• General survey
• AKPK’s clientele
21
Assessment
Conclusions
2017
2016
Implementation of Life Events Module
Focus Group Studies
Mobile Application Learning
Increase of online learning
methods
Financial Literacy –
Household Name
Certification of module
and trainers
E-Learning via mobile
applications
Focus group – behavior
change via mobile
applications
Authority
of Financial
Wellness
2015
AKPK aspires to make
prudent financial a way of
life for all Malaysians
“Make Prudent
Financial Management
A Way of Life”
THANK YOU
www.akpk.org.my
POWER! AKPK Info line:
1 800 88 2575