Studies\nconducted by Bank Negara Malaysia (BNM), the OECD International Network on\nFinancial Education (OECD\/INFE), Credit Councelling and Debt Management (Agensi\nKaunseling dan Pengurusan Kredit [AKPK]) and the Malaysian Financial Planning\nCouncil (MFPC) between 2015 and 2018 show that the level of financial literacy\namong Malaysians has yet to reach a satisfactory standard.<\/p>\n\n\n\n
The\n2015 BNM\u2019s Financial Capabililty and Inclusion Demand Side Survey, for instance,\nreveals that despite the availability of a well-developed financial\ninfrastruture to promote access to financial products and services in the\ncountry, consumers still lack the ability to make good financial decisions. <\/p>\n\n\n\n
The\nfindings of the BNM\u2019s survey concurred with the outcome of the OECD\/INFE International\nSurvey Of Adult Financial Literacy Competencies conducted in 2016. In the\nOECD\/INFE report, the level of financial literacy is indicated by combining\nscores on knowledge, attitude and behaviour. While the average score across all\nparticipating countries is 13.2 out of possible 21 (a combination of a maximum\nof 7 for knowledge, 9 for behaviour and 5 for attitude), Malaysia only scored\n12.3 (3.6 for knowledge; 5.7 for behaviour and 3.0 for attitude)\u2014a below\naverage mark which ranks it at a lowly 26 position among 30 surveyed countries.\nIn its executive summary, the OECD\/INFE report recommended Malaysia to raise\nthe level of financial knowledge among its population to enable them to fully\nunderstand the financial decisions they make.<\/p>\n\n\n\n
Perhaps\none might argue the findings do not necessarily reflect the current reality in\nMalaysia as both BNM and OECD\/INFE findings were released back in 2015 and 2016\nrespectively. Nevertheless, the most recent studies by AKPK and MFPC also show\nthe same conclusion.<\/p>\n\n\n\n
The\nAKPK Financial Behaviour Survey 2018 which focuses on the financial behaviour\nof Malaysian working adults (MWAs) in terms of their spending, savings and debt\nmanagement reveals that there is much room for enhancement in terms of their financial\nwell-being. In fact, Deputy Prime Minister, Datuk Seri Dr Wan Azizah Wan Ismail,\nin her speech during the launching of the report at AKPK Financial Literacy\nSymposium 2018 in November last year used the term \u201cdismal levels\u201d to describe\nthe state of the financial well-being of the respondents. This was cited due to\nthe inability of respondents to save for emergency needs, high percentage of\nborrowers of personal loans especially among government employees and more than\nhalf of those about to retire were still servicing housing and car loans. <\/p>\n\n\n\n
The\nlast study concerns the Financial Capability & Utilization of Financial\nAdvisory Services in Malaysia released by MPFC in 2018. The objectives of the\nstudy, as the subject implies, mainly have to do with the Malaysians\u2019 levels of\nliteracy on capital market and their preferences with regard to financial\nadvisory services. However, in addition to the two objectives, it also\ninvestigates the general financial literacy and financial capability of the\nrespondents. <\/p>\n\n\n\n
Among\nthe worrying findings from the study is that almost 83.7% of the respondents feel\nthat it is all right to allow expenses to be occasionally higher than income in\ntheir general management of cash flows. While the Employee Provident Fund (EPF)\ndata shows that more than two-thirds (68%) of its members aged 54 have less\nthan RM50,000 in their EPF savings and the amount could sustain them for 4.5\nyears; 43.8% of the respondents believe that they could rely on EPF savings for\ntheir living cost after retirement. Another disturbing discovery is that 57% of\nrespondents are illiterate in risk management that makes buying insurance\npolicy less significant in their list of priority.<\/p>\n\n\n\n
Similar\nto what had been suggested by the OECD\/INFE, the AKPK and MPFC reports stress\non the importance of financial education for it can improve the level of\nliteracy which subsequently shape better financial behaviour among individuals.\n<\/p>\n\n\n\n
Indeed,\nin a living environment where most of us are cornered by several economic\nchallenges and risks ranging from the escalating cost of living, inflation, and\nslow wage growth among others, it is paramount to have a good understanding and\nequip ourselves with the right skills on how to take care of our hard-earned\nmoney. <\/p>\n\n\n\n
In\naddition, being financially literate will not only help us to weather economic\ndifficulties we encounter in our lives, but also open opportunities for\nindividuals\u2014through informed financial decisions\u2014to grow or protect their\nwealth if they choose products or services that able to deliver their\nexpectations.<\/p>\n\n\n\n
Knowledge\nliberates man from ignorance and prejudice. In the Quran, the manifestation of\nreading in Surah al-Alaq<\/em> (the first revealed verses); and\nwriting in Surah al-Qalam<\/em> (the second revealed verses) strongly\nsignify that Islam gives a strong emphasis on the quest for knowledge. The\ngatekeeper to knowledge is education and literacy. With knowledge, man can\nempower himself and excel in any field or endeavour he undertakes. This\nincludes, but is not limited by any means to financial matters as cited here . <\/p>\n\n\n\n Nevertheless,\nMuslims should observe the principles of halal and haram in all their actions\nand behaviour including financial affairs. Indeed, perpetuating the\nconventional financial systems will not contribute to the progress of the\nIslamic financial system. Besides, the conventional financial system tolerates riba,<\/em>\nmaysir<\/em> (gambling) and gharar <\/em>(uncertainty) which are strictly\nprohibited in Islam. Being involved in whatever form associated with such three\nelements will bring nothing positive but sin upon oneself.\n<\/p>\n","protected":false},"excerpt":{"rendered":" Studies conducted by Bank Negara Malaysia (BNM), the OECD International Network on Financial Education (OECD\/INFE), Credit Councelling and Debt Management (Agensi Kaunseling dan Pengurusan Kredit [AKPK]) and the Malaysian Financial Planning Council (MFPC) between 2015 and 2018 show that the level of …<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_analytify_skip_tracking":false,"_wpzoom_pinterest_image_url":"","_wpzoom_pinterest_hidden_image":"0","_wpzoom_pinterest_description":"","footnotes":""},"categories":[232],"tags":[],"class_list":["post-24565","post","type-post","status-publish","format-standard","hentry","category-bernama","category-232","description-off"],"_links":{"self":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts\/24565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/comments?post=24565"}],"version-history":[{"count":0,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts\/24565\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/media?parent=24565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/categories?post=24565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/tags?post=24565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}