The financial literacy of the population in Bosnia and Herzegovina is continually gaining importance due to the rapid development of the sector of financial intermediation, through which citizens are exposed to the increasing supply of diverse financial products, and given the fact that new products are increasingly targeting population that was traditionally not active participant of the processes, such as school-age children. Today, it’s hard to imagine life without using financial products and services, such as accounts, debit and credit cards, loans, insurance, leasing …
Bearing this in mind, as well as the fact that socially responsible business is one of its basic principles of operation, the Central Bank of Bosnia and Herzegovina (CBBH) implements activities aiming at the financial literacy of the population through the preparation and distribution of educational materials, the implementation of targeted educational activities and organizations of visits to the CBBH , as well as informing citizens about responsible practices of financial behavior. Governor of the Central Bank of Bosnia and Herzegovina, Senad Softić, speaks about financial literacy and other activities of the CBBH for the Visit B&H magazine.
What is the financial literacy of B&H citizens and what can the CBBH do to increase it?
– In formal education plans there is no subject that would teach pupils and students about the basic concepts, characteristics, advantages and disadvantages of certain financial products and services, and taking into account the experience of the consequences of overindulgence of individual citizens in Bosnia and Herzegovina in the past, it can be assumed that the level of financial literacy of citizens is not satisfactory. This is a potential problem for the whole society – it is difficult to find someone financially responsible if it does not possess the knowledge and skills that assist him/her in responsible personal finance management. Such persons are a potential social and economic problem. Bearing this in mind, it is very important to establish the planned comparative action of educational, financial, non-governmental organizations, media and other institutions in promoting the idea of importance of learning about financial literacy as a preventive behavior that contributes to the financial stability of the individual, the financial sector, and the society as a whole. The basic task of the CBBH is monetary and financial stability. By participating in the financial education process, the CBBH helps create a financially educated population that, rationally using this knowledge, will make rational financial decisions that will, as such, provide an additional pillar of stability to the entire system.
Introduction of a financial education literacy course in schools is often mentioned, and students are often led to banks and other financial institutions in order to obtain some basic information on finances. Is CBBH visited by students and what do you talk to them about?
-Financial literacy of children and young people is very important and useful, because it represents a quality basis for acquiring knowledge of money management, as well as the skills necessary for making daily financial decisions. In interviews with pedagogues and teachers of primary and secondary schools who visited CBBH, it was often pointed out that the introduction of a course related to financial education would be very useful, because financial education creates the possibility for a person to be financially literate and therefore responsible for managing money. Through activities of the CBBH, we are trying to achieve a higher level of financial literacy and inclusion of children and youth. Visiting primary and secondary school students and students from all over Bosnia and Herzegovina is an integral part of the financial education that the CBBH has been conducting in recent years. We carry out various activities of financial education through interactive workshops, quizzes, where students are introduced to the work and role of the CBBH, how to relate to money, savings and we aquaint them with the basic characteristics of financial products. We believe that financial education of children should begin as soon as possible, to learn how to differentiate wishes from needs, to understand the concept and priority of savings. These activities are currently being realized in cooperation and with the support of the European Fund for Southeast Europe – EFSE, and within the framework of this cooperation, we created and published a publication for children called “Novko i Novčica u svijetu novca”, which is the first publication of this type for children of elementary school age in Bosnia and Herzegovina. Every year we celebrate the ‘Global Money Week’ organized around the world at the initiative of the International Movement for Financial Education for Children and Youth, which aims to teach children and young people about the value of money, savings and other issues in the field of finance. This year we organized a debate of high school students on the topic ”Gotovinsko plaćanje je povoljnije od bezgotovinskog“ (Cash payment is more favorable than non-cash). High school students from the Catholic school center “St. Josip” from Sarajevo and secondary school “Istočna Ilidža” from East Sarajevo have shown excellent preparedness and knowledge in the field of payment systems. Also, every year we celebrate the World Savings Day. Currently, we are educating 172 pupils and students of the third grade secondary school of the Third Gymnasium in Sarajevo who have the opportunity to get acquainted with the work and activities of the CBBH, how to spend their money more rationally, the advantages of early savings and the basic characteristics of financial products. Also, as part of marking the 20th anniversary of the work of the CBBH, in cooperation with the National Museum of Bosnia and Herzegovina, we organized a numismatic exhibition called “Tragom Novca“ (The Money Trail), which was set up at the National Museum in the period from August 11 to September 22, 2017 and it has caused great public interest. The exhibition had coins, paper money, and securities, and certain exhibits originated from the 4th century before the new era. The exhibition was formed from a collection of money owned by the National Museum of Bosnia and Herzegovina and the CBBH. As part of the organization of this exhibition, an appropriate brochure was published, with which, we hope, we gave additional contribution to the education of money and its history on the territory of Bosnia and Herzegovina.
CBBH also promotes financial inclusion. What is this and what is achieved by financial inclusion?
-Financial inclusion or inclusion implies, in short, the proportion of citizens using financial products and services. The percentage of financial inclusion of citizens in one society can be an indicator of the very economic structure of individuals in one society and can be an indicator of the level of development of the financial sector itself, that is, financial products and services that are available to the users. In practice, financial inclusion is directly related to financial education. Through education process, it is trying to influence the increase in the share of the population using financial services, with a special emphasis on those strata of the society that until now had no access to financial services. It provides an opportunity for people who have not yet had the opportunity to access funding sources to get the resources so they can start a private business or finance some of their other needs. It also directly affects the reduction of the share of the informal economy and has a positive impact on the financial stability of the country. Greater financial inclusion and financial literacy can have an impact on business policies in terms of increasing macroeconomic stability and growth. Financially educated consumers and entrepreneurs make more reliable financial and business decisions. With all this in mind, CBBH tries to promote the importance of financial inclusion of individuals through various models of education and information. Financial inclusion remains a major challenge globally – according to available data, nearly two billion people have no account opened in a formal financial institution, which confirms that this topic will certainly be up-to-date in the future.
Recently, students of the prestigious US Yale University visited CBBH. Have there been more student visits from world universities and how significant are those visits?
– In addition to the visit you mentioned, recently we had a visit of the Karl-Franzens Universitat Graz students from Austria. Some of these visits, such as Yale University, are repeated every year and have become a kind of tradition. We consider them very important because they give students of the world’s top business programs the opportunity to become familiar with CBBH and the economy of Bosnia and Herzegovina in general, and to somehow represent the promotion of the activities of our institution and state. In the organization, we always try to put the knowledge of our experts at your disposal, so that students can receive the information they need first hand. We must say that in spite of the visits of large world educational institutions, our focus remains on cooperation with BH. Universities. This year we already had five student and student visits from Sarajevo, East Sarajevo, Široki Brijeg and Mostar. To give young people the opportunity to see firsthand the functioning of an institution such as the CBBH, to learn on concrete examples, directly ask questions to experts in the field that our institution covers, we consider it as big capital and a supply for the future.
