Financial education training builds on MoU for Lusophone countries

AFI, in collaboration with Banco de Portugal (BdP) and Banco Central do Brasil (BCB), held a second round of training to help Portuguese-speaking countries develop and implement national strategies for financial education (NFES). The training is part of efforts to build knowledge partnerships between AFI network and regulators from developed countries.

It reinforces a Memorandum of Understanding (MoU) signed by monetary authorities and financial regulators from seven Portuguese speaking countries and AFI in July 2017. The MoU promotes financial inclusion and education in Lusophone countries through the exchange of information, studies, research, activities and materials. The first training was held early last year.

Sessions focused on the common interests and challenges faced by participating countries in promoting financial education and integrating it into school curriculums as well as the importance of using behavioral economics to improve consumers’ financial decisions.

“The challenge of raising people’s financial literacy is great, but the challenge of changing attitudes and behaviors is even greater,” BdP Vice Governor Dr. Luís Máximo dos Santos told participants. “Therefore, it is important to develop structured projects that will last in time”.

Seventeen participants, mostly from AFI member institutions, attended the three-day event earlier this month in Lisbon, Portugal, including Banco Nacional de Angola, Banco Central de Timor-Leste, Banco de Moçambique and Banco Central de São Tomé e Príncipe.

BdP hosted the training and acted as a technical lead along with BCB. Both central banks have enacted strategies that promote financial education in their jurisdictions, with those experiences and best practices being used to as the basis of the training.

Reiterating the importance of financial education, AFI’s Head of Latin America and the Caribbean, Zaira Badillo, said that it “can be an effective way to promote financial inclusion because it boosts the understanding of financial products, encourages responsible financial behavior and gives people the confidence to take control of their finances.”

Echoing this sentiment, dos Santos noted: “How people deal with money, how they make their consumption decisions, what motivates them to save or borrow money depends on their financial knowledge, attitudes, and behavior; and these are not only for their well-being, but also for the allocation of resources in the financial markets and for the stability of the financial system”.

Some AFI member institutions have expressed interest in gaining the expertise of developed country regulators to advance their own financial inclusion aims beyond access and into more complex issues such as usage, quality and impact assessments. Through knowledge partnerships and MoUs, such knowledge exchanges can help address the need for practical policy solutions and improve the understanding of emerging risks.

In response to the training, a participant said: “I consider it especially important that the failures and mistakes that occurred in the implementation of financial education in Portugal and Brazil have been shared, since they will certainly help other countries avoid similar difficulties”.

The training is part of AFI’s capacity building efforts, an approach that supports member institutions in gaining and translating knowledge about financial inclusion policies, regulation and supervision into concrete actions through a peer-learning approach.