April 30, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has underscored that while Sri Lankans exhibit satisfactory levels of financial knowledge compared to global standards, there exists a notable gap in financial behaviour within the island nation.
Highlighting the findings of the Financial Literacy Survey, the CBSL emphasised the imperative for enhancing financial behaviour, asserting that this necessitates careful consideration by policymakers.
Financial behaviour encompasses an individual’s approach to managing finances, making financial decisions, and navigating financial challenges.
In its recently published Annual Economic Review 2023, the CBSL pointed out that translating financial knowledge into tangible financial behaviour poses a multifaceted challenge.
Factors contributing to this gap include financial attitudes, behavioural biases, limited practical experience, socio-economic barriers, and emotional influences, it added.
Poor financial behaviour exacerbates individual vulnerability to economic shocks, the CBSL went on, adding that it fosters macro-economic instability through diminished savings and heightened debt, widens inequality, and strains public resources due to heightened reliance on government assistance programmes.
Despite a lack of gender gap in financial inclusion, the CBSL noted a modest disparity in financial literacy levels between genders in Sri Lanka.
To address the issue, the CBSL advocated for the adoption of gender-sensitive approaches to bridge this gap effectively.
Consequently, the CBSL highlighted the importance of introducing targeted behavioural interventions to facilitate the translation of financial literacy into positive financial behaviour among Sri Lankans, positioning it as a policy priority.
In response to these imperatives, the CBSL, in collaboration with over 40 stakeholders including financial sector regulators, ministries, academia, and public and private sector institutions, spearheaded the development of Sri Lanka’s inaugural Financial Literacy Roadmap.
The roadmap encompasses a comprehensive five-year action plan spanning from 2024 to 2028, with the primary objective of enhancing the financial behaviour of Sri Lankans.
It currently comprises 48 actions designed to achieve 10 objectives across four strategic priorities outlined in the roadmap.
These actions primarily focus on strengthening coordination mechanisms, standardising financial literacy materials, nurturing financial capability among school children in collaboration with education partners, and optimising existing resources for effective delivery of financial literacy interventions.
However, the CBSL acknowledged that while significant progress has been made in policy commitment and roadmap development, challenges persist, necessitating alignment with national policies, adaptation to evolving financial landscapes and global trends, fostering inclusivity in financial literacy interventions, nurturing partnerships, and establishing robust monitoring and evaluation frameworks.
Addressing these critical factors, the CBSL stressed that it is essential to maximise the impact and sustainability of financial literacy interventions, ultimately contributing to the development of a financially literate and empowered populace.
