KUALA LUMPUR (Oct 3): Bank Negara Malaysia (BNM) is currently working toward formulating a 5-year national strategy to elevate financial literacy in Malaysia, especially among the younger generation, according to its Deputy Governor Abdul Rasheed Ghaffour.

"Our vision aims to shape the society characterised by responsible financial behaviour, the ability to manage finances well, and to achieve financial security," he said during his keynote address at the Federation of Malaysian Consumers Associations (FOMCA) Conference 2017. 

Rasheed said the aspiration and objectives of the national strategy for financial literacy have been articulated by the Financial Education Network (FE Network), which was established in late 2016.

"The national strategy for financial literacy have identified five strategic priorities which cover all life stages — from nurturing values amongst young children, to inculcating positive behaviour for adults and preparing Malaysians to retire comfortably. Specific action plans would be formulated to reach out to the masses, as well as meeting the needs of specific target groups," Rasheed said.

He highlighted the importance of financial education, as the level of financial literacy in Malaysia is in a worrying state. 

"Malaysians tend to have low financial resilience and are vulnerable to financial shocks.

"In cases of emergencies, Malaysians resort to cutting down on spending; or borrow from external sources, such as friends and family members; or even depend on credit lines, such as credit cards and installment plans. An ideal situation is to have a financial buffer that is sufficient to cover living expenses of at least three to six months, in the event of loss of income," Rasheed said. 

Additionally, Rasheed revealed a significant number of Malaysians like to "live for the moment" and thus, lack the practice of long term financial planning. 

"Only 40% of Malaysians consider themselves financially ready for retirement, despite the steadily increasing life expectancy of Malaysians," he added. 

As such, Rasheed said the financial education initiatives are to address the state of financial literacy in Malaysia, in order to improve consumers' understanding of financial products and services, as well as to develop skills and confidence in order to make informed financial decisions in their daily lives. 

"Financial education initiatives under the national strategy will be inclusive, be evaluated and enhanced over time, to ensure they remain relevant and impactful," Rasheed added.