UAE is in ‘first division’ of financial literacy

Reuters

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The UAE is in the ‘first division’ when it comes to financial literacy, according to Alex Fraser, CEO of the London Institute Banking and Finance (LIBF).

With just one third of adults worldwide being financially literate, according to Standard & Poor’s Ratings Services Global Financial Literacy Survey, the LIBF is involved in the global challenge to raise financial literacy.

Fraser said: “At the moment, the UK is in the second division, the UAE is in the first division, and there are a few around in the premier league that you wouldn’t necessarily expect.

“Some parts of the world are strict on financial education as a core life skill, you learn it at school and you get assessed on it.”

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The LIBF provides financial education at A-level and GCSE/O-level equivalent in the UK, although their current reach extends to only 600 out of roughly 4,500 schools.

Fraser praised the actions of some banks for their partnerships with UK schools, but said the good work being done to provide teenagers with sound financial knowledge is often being undermined by a failure to follow-up on initial progress made.

This is in marked difference to his experiences in the UAE.

He said: “Organisations like Barclays and Santander do a great job going into schools and helping people. But what’s the situation like six months later?

“That’s the difference from what we’re seeing in the UAE. There’s a real interest among the parts of the government in the social enterprise space about seeing the impact of what they’ve done.”

Glen Radojkovich, education director at Taaleem, said the UAE schools provider was exploring partnership opportunities to strengthen their provision of financial literacy teachings to students.

He said: “For the younger students there’s been an increasing awareness of the need for financial literacy and that’s been woven into our schools on a case by case basis with programmes where we may partner with organisations like National Bonds to deliver financial literacy units.”

Keren Bobker, a Dubai-based independent financial advisor and senior partner at Holborn Assets, said a simple understanding of basic banking and how credit cards and loans work would prevent problems at a later date.

“It is far too common to come across people who have got themselves into excessive debt at a young age. This is often due to not understanding how credit cards really work and just how much interest they will end up paying,” she said.  

“I have also seen too many young people fall for the marketing of poor financial products or very risky investments and some basic understanding might prevent them losing what money they have.”

According to the 2022 Arab Youth Survey more than a third of young Arabs struggle to meet their basic expenses, rising to more than two-thirds in the Levant. A quarter said they were in personal debt, with student loans, car loans and healthcare bills the top reasons.

In addition, 75 percent of those in Oman said they receive regular financial support from their families. This was followed by 72 percent in Saudi Arabia, 69 percent in Kuwait, 67 percent in Qatar, 62 percent in the UAE and 60 percent in Bahrain.