It is clear from the AKPK event as well as studies by the Consumer Research and Resource centre, Asian Institute of Finance and Bank Negara Malaysia as well as other institutions that Malaysian consumers are facing severe financial stress. It was reported at the AKPK event that financial wellbeing of Malaysian consumers was at a dismal level, three out of ten consumers had to borrow to pay for essential goods and many consumers did not set aside money for emergencies.

Malaysian consumers were facing three challenges- low and stagnant incomes, increasing costs of living and poor financial planning and financial management practices. One critical way forward to face these three challenges is through empowering consumers through financial education. In the twenty first century, the ability to deal effectively with money and financial matters is increasingly important for every person responsible for managing his financial affairs in everyday life.

The increasing importance of financial literacy is attributable to several demographic, societal and economic trends such as decreasing incomes while costs of living increases, increase in life expectancy, pressure on consumers especially children to consume through aggressive marketing techniques, greater responsibility on consumers on retirement as well as the complexity and increase in the number of financial products and services. Overall more responsibility for financial decisions is being shifted to the individual. How successfully people adapt to these changes will be affected not only by their skills and knowledge but also by their access and skills to use effectively financial products, services and information. People need help to make the choices that are right for them, and to understand the consequences of the choices they are making.


Given the magnitude and complexity of these trends and subsequent demands on consumers and citizens, it is reasonable to assume that they imposes challenges of financial knowledge and skills that certainly cannot be tackled only by family socialisation and every day experience, Thus the promotion of financial literacy should become a core concern for political and educational action in every country.

As at June 2015, 62 countries globally are implementing some form of national financial education strategies.

According to the Malaysian National Financial Blueprint 2011-2020, under the subject of “empowering consumers” (Section 5.2), it has been declared that “a comprehensive approach towards consumer protection and education is essential. Over the recent decade, financial consumer protection and education has received greater recognition as having an important role in contributing towards a sound, stable and competitive sector”.

The Blueprint emphasises that strengthening the financial capability of Malaysian consumers would continue to be an important priority so as to support well-informed, effective and responsible financial decisions”.

Despite the declaration in the Financial Blueprint, progress in financial literacy in Malaysia has been slow and inadequate.  Efforts are fragmented. There is lack of visionary and strategic direction to develop and implement a national financial education strategy. Progress has been extremely slow. There is a lack of government leadership providing strategic direction to achieve the objective of financial education for all, especially those on need.

Since 2011, whence FOMCA launched the Financial Literacy Month, FOMCA has been advocating for a long-term and strategic approach towards financial education in Malaysia.

Malaysia needs a Financial Education Strategy. The Strategy should be built around a collective impact, a strong emphasis on evidence and evaluation and a clear plan of what would happen.  Collective impact is where large scale social change comes from cross-sector coordination, not isolated intervention of individual agencies or organisations.

A collective impact involves a coordinated approach to ensure that resources devoted to building financial capability are focused on interventions that are proven to work and will achieve a significant impact in improving financial capability.

The Strategy could focus on children and young people, young working adults, retirement planning and people in financial difficulties.

A National Financial Education Strategy in Malaysia is sorely needed.  What is needed is effective Leadership and Vision to realise the Strategy for the benefit of all Malaysians but especially young workers and young families.

Despite the explicit commitment to financial education in the National Financial Blueprint, FOMCA strongly believes that the policy makers have neglected to provide focus and leadership to evolve a strategy and move forward to implement the strategy.  FOMCA calls on the national leaders and policy makers to strengthen the resolve to make financial education accessible to all, especially to those in need.

Dato’ Dr. Paul Selva Raj
Chief Executive Officer, FOMCA