Commonwealth Central Bank Governors discuss fostering financial literacy

Financing for women and financial literacy for legislators and the citizenry formed the basis for the discussions when Commonwealth Central Bank Governors met Monday morning at the Central Bank.

As of Thursday, 44 of the 53 members of the Common-wealth had confirmed their attendance at the Common-wealth Finance Ministers Meeting (CFMM), but Stabroek News could not confirm how many countries were represented at the Governors meeting.

Central Bank Governor Lawrence Williams in an interview yesterday morning during the break of the first plenary session at the CFMM at the Guyana International Conference Center (GICC), Liliendaal, described the meeting of Central Bank Governors as quite informative and fruitful, explaining that it went very well.

The focus, he said, was on the whole question of promoting financial literacy, that is, education that can be provided to ordinary people to understand basic terms in finance and commerce and to interlink this in business plans when applying for a loan.

He referred to the need to understand implied terms on contracts for ATM cards and why interest rates are calculated in a certain way.

Governor Williams told Stabroek News that the International Finance Corporation (IFC), a member of the World Bank Group that finances and provides advice for private sector ventures in developing countries, examined the barriers to women accessing financing and some of the programmes that the IFC are putting in place to ensure more access to financing by women.

The Commonwealth, the governor reiterated, is huge and there are cultural differences. For example, delegates from Swaziland and Lesotho revealed that women traditionally do not own land and as such cannot go to the bank to borrow without the permission of their husbands, since their husbands have ownership of the land.

There was also recognition at the meeting that a lot of households are headed by women. This was supported by the programme coordinator of the Caribbean Regional Technical Assistance Centre (CARTAC) based in Barbados, which examined what can be done to improve financial literacy among legislators.

Williams also explained that the programme coordinator noted that although Central Banks produce a lot of reports, which are even available through their websites, some attention must be given to having more focused interaction with legislators. In support of this point practices in South Africa, Australia and the United Kingdom were mentioned, he said. Williams also indicated that there are opportunities in these practices to improve the basic thinking of legislators to understand finance and enable legislators to plan better, “so that some of the debates in Parliament are more informed.”

The United Kingdom (UK) Department for International Development (DFID) at the meeting disclosed, according to Williams, that it is prepared to provide financing for initiatives discussed, but is going the route of setting up a fund. Stabroek News was unable to ascertain which of the initiatives discussed would likely be eligible for financing.

Williams said financial literacy will lead to a more informed public which knows its rights and understands clearly its obligations; and a synergy that can be developed into the generation of income and wealth.

To this end the pioneering work in Trinidad and Tobago in promoting savings by youths were examined, exploring ways that youths can improve their financial stake.