UAE Banks Federation (UBF) on Tuesday launched fully integrated handbook on financial literacy ‘Financial Literacy for Individuals’. Being an essential element of stability and economic growth, financial knowledge helps individuals not just to have access to financial services but also to take prudent and responsible decisions when it comes to their financial transactions, UBF said in a statement.
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.
“We have decided to launch this initiative in line with our objective to promote financial literacy in UAE, and in order to emphasise the significance of financial knowledge and its role in enhancing financial inclusion of individuals,” said Abdul Aziz Al Ghurair, Chairman of UAE Banks Federation.
The UBF 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.
“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,” said Al Ghurair.
Focusing on enhancing financial knowledge, the handbook emphasis how a lack of financial knowledge can lead to poorly informed decisions, which in turn can result in mishandling of savings, as well as falling into debt with inability to repay. Also, the handbook stresses on the importance of financial planning as it provides directions that help individuals to develop plans that match their current and future financial needs and the required steps to simplify financial activities.
The handbook also provides valuable information about different types and operations of banks as well as the institutions that regulates them, in addition to their contribution to the economic development and national financial stability. Additionally, the handbook offers a general glimpse of different financial products and services that banks offer and how customers can benefit from them.
Banking and financial experts have often noted that consumer debt has been piling up, resulting primarily from a lack of financial knowledge. The ‘Financial Literacy for Individuals’ handbook highlights various aspects of borrowing, saving and the ways to manage debt efficiently. In addition, it also highlights importance of budgeting and the steps required in creating a budget, which helps in achieving a balance between income and expenditure.
Information contained in the handbook highlights the benefits of investment, including 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.