Financial Literacy in Nepal

If you don’t understand the language of money and don’t have a bank account, you’re just an economic slave. Financial literacy means learning basic financial matters, understanding money payments, depositing into and withdrawing from financial institutions, and earning and expenditure under a given set of curricula. In other words, financial literacy is a lifelong concept and emphasizes the development of the human ability to understand money and make decisions about financial problems.

Financial literacy is an important part of avoiding financial mistakes and planning for a strong secure financial future. People with low financial literacy standards are often unable to take their ideas and create assets out of them. Thus, financial literacy is one of the important parts of human life. Financial literacy empowers marginalized people. It strengthens the economic sector and stability. Through Financial education, customers can enhance their financial well-being. It also helps in market expansion, capital formation, and proper use of scarce resources. The financial needs of the consumer have been complicated and only with appropriate knowledge and skill in the field of finance and understanding of finance and understanding of financial products and services, one can make good decisions. It educates us to economize spending, save money and keep money safe because we need money to safeguard our family in near future and spend money on our society and family.

The number one problem in today's generation and the economy is a lack of financial literacy. Studies indicate that financial literacy in Nepal is very low. Nepalese people living in rural areas have no financial plan. They believe that money is just for current living. Thus, they spend money right away with no vision for the future and are uninterested in the banking sector resulting in a poor level of financial literacy. Overall financial knowledge of the students is affected by educational and personality characteristics. As a result of an illiterate financial society, students have little knowledge about general banking skills. Nepalese people prefer to keep idle cash or dishoarding rather than saving in the commercial bank. We can say that only 60% population of Nepal has a bank account. Thus, their love of money has rooted in many evil activities.

However Nepalese financial sectors' policies and practices are focused on establishing financial institutions to increase people's access to finance. IT-based channels like mobile banking, internet banking, and branchless banking have been gaining popularity in Nepal. We often hear the news of banking transactions reaching the highest point in history. The current generations are interested in investing in shares resulting in high share transactions. This improving news about financial activities shows that Nepal is slowly learning financial education.

Financial literacy and behaviour are emerging personal financial agendas both in education and finance. Financial knowledge is unaffected by gender, university affiliation, financial behaviours, and influence, ensuring a greater deal of financial literacy in Nepal requires the active engagement of three parties: regulatory agencies, banking, financial institution, and educational institutions. For enhancing financial behaviour, contemporary and contextual financial literacy programs are necessary to educate the individuals. Thus, these institutions should organize financial literacy campaigns in the different rural parts of the country. The government should formulate financial literacy national strategy. It is important to include financial education in the syllabus of an educational institution as knowledge and skills transferred at a young age will come in handy throughout life. Stakeholders should consider imparting financial literacy to the targeted customers to assure that the customers receive service well. Financial service provides different kinds of training on financial matters for their customers/ group members.

 

Though we are literate people of the 21^st century, we are still illiterate when it comes to financial literacy. Financial literacy is the only way to enjoy breathing fresh air to become independent. It begins the process of earning more for what you know and less for what you do. Spending everything you earn without any means of saving is a money disorder. Thus, financial education is more valuable than money, with globalization, Nepal is slowly learning about financial education which is good for its people’s standard of living.