CITI FOUNDATION and Kenan Institute Asia have launched a special project, "Literacy Improvement for Better Finance in Thailand", calling for collaboration among the government, the private sector, civil society and academics to tackle the problem of perso
“Thailand is now facing a problem of mounting personal debts, largely due to overspending,” said Darren Buckley, Citibank country head and Citi country officer. “Over the past decade, overspending has increased substantially while income growth continues to move upward at a slower rate. This is due in no small part to the lack of financial-literacy education.
“Despite many ongoing financial-education projects operated by the government and other agencies, problems persist in changing people’s behaviour to promote savings and responsible credit management.
“Financial-literacy skills are a key means of promoting financial health. This is why Citi Foundation, in partnership with Kenan Institute Asia, has initiated a special project, Literacy Improvement for Better Finance in Thailand, or LIFT, to improve financial literacy in the country,” he added.
A key activity under LIFT is a research study examining existing gaps in financial-literacy education as well as best practices in the delivery of financial-education services.
Building on efforts undertaken by the Bank of Thailand, the Fiscal Policy Research Institute Foundation and other governmental units, the study aims to identify the causes behind low financial literacy in Thailand as well as solutions to the problem.
The study will also include interviews with key figures in the field of financial literacy to analyse the problems and circumstances leading to low savings rates and poor credit management in Thailand.
Piyabutr Cholvijarn, president of Kenan Institute Asia, said: “The fact that Thai people lack financial knowledge and skills, coupled with Thailand being a consumer-driven society, has led to problems of mounting personal and household debt.”
According to a 2013 survey by the Organisation for Economic Cooperation and Development on financial literacy, the level in Thailand was 58.5 per cent, below the study’s average score of 62.3 per cent, taking into account 14 participating countries.
An in-depth study by the Thai Ministry of Finance indicated that students, people with low incomes and farmers were those with the most pressing need for financial-literacy education. Furthermore, Thailand’s household debt-to-GDP ratio rose to 82.3 per cent at the end of last year, a significant increase from the 55.6-per-cent level in 2008.
“The Kenan Institute and Citi Foundation are calling for collaboration from all sectors to develop concrete education guidelines for financial literacy to be used throughout the country,” Piyabutr said.
The project’s first stakeholder meeting, titled “Direction and Trend of Thailand’s Financial Education Development”, was held as a forum with representatives from the government, the private sector and civil society in attendance to discuss and exchange information to be used as guidelines for the provision of financial literacy to the public at all levels.
In the longer term, the project will encourage stronger financial-knowledge skills for the general public and establish a “national agenda” on financial literacy with cooperation from the government, the private sector and civil society. Citi Foundation has organised a suite of educational projects focused on personal financial management. Last year, the foundation provided more than Bt720 million worth of financial support to organisations to help improve financial-literacy education globally.