The UAE Banks Federation (UBF) has continued its efforts to develop and raise financial awareness of consumers.
While a lack of financial knowledge may lead to financial distress, a comprehensive understanding of financial products and concepts becomes imperative as will empower individuals to make responsible decisions on saving, spending, investment, and achieve economic efficiency by way of balancing costs of borrowing against benefits.
Financial education is considered one of the key pillars of financial inclusion to achieve sustainable development, and the UBF has announced the release of a full comprehensive handbook, titled Financial Literacy for Individuals, in order to provide a strong structure for planning and managing personal finances. The handbook offers individuals all basics required to make efficient and coherent financial decisions based on four different aspects such as planning, borrowing, saving, and investing.
HE Abdul Aziz Al Ghurair, Chairman of UAE Banks Federation said the UBF decided to launch this initiative to promote financial literacy in UAE, and to emphasise the significance of financial knowledge and its role in enhancing financial inclusion of individuals.
“The term financial literacy refers to the ability to use basic knowledge and skills to make prudent and responsible financial decisions. Closely aligned with this, we aim to employ this handbook to further develop the skills of consumers by providing information and guidelines, which enable them to make wise decisions on their financial transactions which in turn help them reach financial independence and reduce the possibilities of financial trouble. Moreover, it elaborates on how financial planning and management will affect positively or negatively on their financial future. We hope that the handbook will contribute effectively towards building a comprehensive financial education ecosystem in order to empower individuals for taking healthy and safe financial decisions, which will benefit the society and economy,” said Al Ghurair.
Focusing on enhancing financial knowledge, the handbook emphasises how a lack of financial knowledge can lead to poorly informed decisions; the importance of financial planning; the important benefits that financial planning offers to individuals; it offers a general glimpse of different financial products and services that banks offer and how customers can benefit from them; importance of budgeting and the steps required in creating a budget; it offers an overview of different components and benefits of savings; the benefits of investment; financial security; wealth generation; financial preparedness for emergencies; as well as accomplishment of financial objectives. It also introduces the key investment products such as stocks, bonds and mutual funds.
Banking and financial experts have often noted that consumer debt has been piling up, resulting primarily from a lack of financial knowledge. The handbook highlights various aspects of borrowing, saving and the ways to manage debt efficiently; and it sheds light on the importance of taking necessary measures to prevent financial crimes, providing a list of common and potential frauds, important information about the types of financial fraud to which individuals may be exposed and several important tips to avoid becoming victims of cybercrime and repeated fraudulent attempts.
The UBF will soon launch a financial education guide for small and medium enterprises (SMEs).