The Role of Financial Institutions in

Financial Education

Shariq Mukhtar

Citi Country Officer, Indonesia

OECD-Bank Indonesia International

Conference on Financial Education

October 21, 2008

Bali, Indonesia

2

Financial Literacy in Indonesia

• Indonesia’s “Fin-Q” score: 52.2 (out of 100)

• If they lost their jobs tomorrow, most respondents said their savings would last them less than 11 weeks

• 6 out of 10 Indonesians do not plan for their retirement

• Less than 25% have a formal retirement plan

• 39% believe that they will rely on their children as they get old

• 58% admitted an “average” understanding of personal financial management

Source: Citibank Indonesia Fin-Q (Financial Quotient) Survey - 2007

3

Our Rationale

Leverages our financial expertise

Leverages our knowledge of consumer needs

Develops more informed and responsible

consumers

1

3

2

4

• Is more confident

• Saves for their retirement

• Develops financial goals

• Balances their checkbook

• Is concerned about their credit rating

• Lives within their means

• Follows a budget

• Is a home owner

• Establishes good relationships with financial institutions

• Loyalty factor

A Financially Literate Customer…

5

Use Credit Wisely

Citi’s Parallel Approach

Save & Invest Wisely Community

• Educational websites

• Credit tools & advice

• Media outreach

• Publications & seminars

• Industry investment fairs

• Financial literacy surveys

• Country/regional

programs for youth and

adults

• Capacity building of the

financial education

community

Responsible advice to customers and other consumers

BUSINESS RESPONSIBILITY

Support for:• Low-income/disadvantaged• Advocates/practitioners

COMMUNITYRESPONSIBILITY

6

www.usecreditwisely.com

Australia, India, Indonesia,

Korea, Malaysia,

Philippines, Singapore,

Taiwan, Thailand

Citibank India’s website

Citibank Indonesia’s website

available in Bahasa

Use Credit Wisely – Educational Websites

7

Use Credit Wisely – Localized Credit Tools & Advice

10.000 booklets produced and distributed

8

• Journalist classes

including financial

education

• Involving various media in

major cities of Indonesia

• Participation and support

of regulators and partners

Use Credit Wisely –

Media Outreach

9

Additional Media Outreach –

Consumer Protection

10

Save & Invest Wisely – Publications & Seminars

• Alliance of Experts series – Hong

Kong, Korea, Singapore, Taiwan,

India, Indonesia and Philippines

• Regular publication to inform

customers on the latest trends,

financial tips, banking products and

services

11

Save & Invest Wisely – Industry Investment Fairs

• Outreach to investors in collaboration

with major industry players

12

“Fin-Q” Surveys

6 out of 10 Indonesians do not

save for their retirement

Regional Financial Quotient survey to

analyze financial literacy, and consumer

behaviour in savings, investing, insurance

and retirement

13

Community – Agent Penny in Primary Schools

Primary school children – comic, drama,

teacher’s kit, website

Implemented in China, Hong Kong, Indonesia,

Malaysia, Singapore, Taiwan

14

Community – Financial TV Show for General Public

TV Program with weekly financial

tips

Topics: credit cards, investing,

consumer finance, insurance, etc.

Audience can ask questions online

according to financial needs

15

Community – Financial Education for The Poor

• Launched in 2007, aimed at helping

microentrepreneurs expand their

businesses

• US$131,000 Citi Foundation grant for

Indonesia to reach 150 microfinance

providers in Bandung, Jogjakarta,

Surabaya, Denpasar, Makasar and

Balikpapan

16

Community – Developing Finance Sector Talent

• Citi University

Banking Course has

become part of the

university curriculum

• Similar banking

courses are running

across the region

University of

Indonesia

Lectures by Citi

Indonesia management

17

Community – Financial Education Partnerships

Partnership with Bank Indonesia to

support 2008 Financial Education

Year

Educating the general public by

disseminating information and using

AYO ke BANK mobile units

18

Community – Financial Education Capacity-building

Citi-FT Financial Education Summit - New Delhi, December 2007

19

Citi’s Long-term Commitment to Financial Education

• “Knowledge is Your Greatest Asset”

• Creation of the Citi Office of Financial Education in 2004

• 10-year global US$200 million commitment to financial education programs (funded by the Citi Foundation and Citi businesses)

– US$121 million spent to date

– US$36 million spent in 2007 in 65 countries

– over 9 million “lives touched” in 2007