Dear Minister of Finance, President of the SEC, President of MAPAS (Agency for Supervision of Fully Funded Pension Insurance) and representative of the ISA, distinguished representatives of the MBA and the media,
It is my great pleasure that the National Bank is hosting today's event that we organize together with the other regulatory institutions in order to promote the new Memorandum, which will continue to promote our cooperation in the field of financial education and financial inclusion, but also in order to bring our planned activities in these important segments closer to the public.
In the period after the beginning of the global financial crisis, financial education is among the new challenges and activities of central banks. Namely, the crisis period pointed to numerous vulnerabilities of the financial system underlining the need for strengthening of the regulation and the risk management by financial institutions, but also pointed to the need for financially educated population that understands the advantages from using the various financial products, but also knows to protect itself against the potential risks during their use. Consequently, central banks around the world have already developed various forms of financial education, aimed at strengthening the ability of the population to make the right financial decisions.
Hence, for several years now, the National Bank has been implementing activities in the field of financial education, mainly aimed at the youngest, who are still in an early stage of education and skills acquisition, by organizing lectures and publishing various educational materials. In the past six years, meetings were held with about 9,000 students from the primary and secondary schools and with students, thus holding specialized lectures on specific economic topics for the students, and the Museum of the National Bank educates its visitors for the history of money in these areas.
In the spirit of the trends in this area, with the new memorandum of cooperation that we sign today, in addition to the financial education, which was covered by the previous memorandum, our activities also include the support for greater financial inclusion. The link between the two areas is more than obvious - the financially educated population has more knowledge of the advantages from using various financial services, which ultimately ensures greater involvement of the population in the financial flows and easier access to finance.
The need for achieving higher financial inclusion is a global issue given the estimates that around 1.7 billions of the population on a world scale still do not have access to a banking system. Given that the access to finance is considered as one of the key determinants to reduce poverty, this issue becomes increasingly important.
The international indicators for measuring the level of financial inclusion (the index of the World Bank for 2017) indicate the need for making further efforts to increase the financial inclusion of the population in our country. Although there is a solid financial inclusion in terms of holding a transaction account (around 77% of the adult population hold a transaction account, which is completely comparable with the average for Europe of around 82%), yet several other indicators point to a more significant gap: only 17% and 53% of the population hold credit and debit cards, as opposed to the European average of 35% and 71%, respectively; only 37% of the population use their cards for purchase and sale transactions, which is twice less than the European average (63%); only 12% of the population use electronic access to accounts, and only 17% of the citizens make Internet transactions, which is twice less than the average in the EU.
The need for greater financial literacy is especially pronounced in conditions of strong growth of the fintech industry. In global terms, the past years registered proliferation of small companies that offer technologically advanced financial products that are easily available for consumers. Actually, one of the main advantages of this new wave of financial innovations is exactly the easier access to new, more competitive financial products or forms of financing of the population and the small companies, as additional sources of financing of the economic growth. However, in addition to the numerous benefits, this wave of innovations poses new challenges to both regulators and financial institutions, but also to customers. We should not forget one of the lessons drawn from the crisis: the easier access to financial services in the short term offers numerous advantages to consumers, but in the long term it can lead to taking excessive risks, especially if there is no adequate level of financial literacy by the population.
The greater financial inclusion in various segments of the financial system also requires joint engagement - of regulatory institutions in terms of education and regulation, but also of the private financial institutions in terms of ensuring greater availability and better information about the offered financial services, including about the accompanying risks. Therefore, I think that it is especially important that towards the end of the last year, the National Bank signed a Memorandum of Cooperation in the field of financial education and inclusion also with the Macedonian Banking Association, whereby the private banking sector, as a dominant segment of the financial system of the country, confirmed its willingness to make efforts for these aspects.
We sign the new expanded memorandum in the eve of the Global Money Week, in which, as the previous years, we plan several activities that will strengthen the awareness of the need for financial education and will promote the advantages of greater financial inclusion. During next week, the National Bank will launch an educational caravan - we invited and provided transport to the students from several schools, mainly from rural areas of the country, who have not been in our institution so far, to visit the National Bank and other regulatory institutions. During the visit to the National Bank, the students will have an opportunity to attend educational presentations, to receive educational materials that will enable them financial education adequate to their age, as well as to visit the Museum of the National Bank. We will also be visited by children from one kindergarten, for the first time in the context of financial education, in an endeavor to bring the meaning of money closer to the youngest generations. All that we accomplish and will accomplish in the field of financial education of the youth, is also our investment in the future. As institutions, we are obliged to adopt policies to develop and support the financial system and the economy in the long term. The activities for enriching the financial knowledge of the youth contribute to building the capacity of the generations that will be the future engines of the economic and financial flows in the country.
A special event in the Global Money Week will be the national competition within the European Money Quiz, which will be held for the first time in our country. We started this activity towards the end of the last year, on the initiative of the Macedonian Banking Association, in cooperation with the Securities and Exchange Commission and the Ministry of Education and Science, within the European competition in this area of children at the age of 13 to 15 years. We have already familiarized the public with the Quiz and we informed of the great interest and the massive involvement of the students from the country. In February, the National Bank, together with the four Quiz organizing institutions, hosted a preparatory meeting with the teaching staff, which is the first training of the teaching staff in the area of financial education for the National Bank. In the national competition next week, the national winners will be chosen who will represent the country in the final to be held in Brussels, organized by the European Banking Federation.
We would also like to announce the publication of the series of short educational texts, called Economy for Everyone. As the name implies, it is intended for all segments of the population, including adults. These texts, in a simple language, will try to explain certain terms or phenomena in the field of macroeconomics, finance and banking. We hope that this series of educational texts will bring our work closer to the public and will contribute to better understanding of multiple economic issues that have an impact on the everyday living, and are directly or indirectly related to central-banking operations.
At the end, I would like to express my gratitude to other financial regulators and commercial banks for the cooperation, but also to our colleagues who are involved in the promotion of this area and also, to express my strong assurance that our cooperation will continue to contribute to raising the quality of human potential, as a key prerequisite for prosperity in society.
Each area has its own challenges, and in modern conditions, democratic societies make efforts for development and inclusion in every area of social action - inclusion in education, in the economy, inclusion in the enjoyment of human rights and freedoms. Our challenge as regulators is the financial inclusion, which means increased, yet sustainable, public access to the financial system, without excessive risks, which in the long term should contribute to a comprehensive economic growth beneficial for all.
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National Bank of the Republic of North Macedonia