PRESS RELEASE
Second Deputy Governor Ahmetaj: Address at the Forum ''Empowering Financial Inclusion through Financial Education” organized by the Albanian Association of Banks and the Bank of Albania

As a representative of the Bank of Albania, it is my pleasure to be part of this forum, because the Bank of Albania is among pioneering central banks in the region for concrete involvement in financial education.

There is a compelling reason for this commitment: for anyone living in a market economy, making the right financial decisions is an essential skill not only for individual but also for social welfare. These very same skills guide the decisions that individuals make every day, thus helping to shape a good economy.

In recent years, there has been a shift of emphasis, from traditional education on the economy, to knowledge on finance. This shift comes as a result of the sophistication of financial products and services, as well as the increasing involvement of fintech in this industry, making it more urgent.

Everyone needs more knowledge, including us who work in this industry. For example, we may need clarification regarding mortgage contracts.

Likewise, the expansion of the financial market with new products, such as pension funds, health and assets insurances, are increasingly shifting the need for long-term financial protection from enterprises to households, making financial knowledge more necessary for them.

Alfred Marshall's simple concept of economics, as a study of humanity in the business of life, remains relevant. This means that if we want to have a strong economy, we should help people use the knowledge of the economy in their everyday life, what Marshall calls "the business of life."

The Bank of Albania's efforts on financial education begins with the intention to do away with the mystery that has historically surrounded the real activity of a central bank. By doing this, it aims to build and strengthen the public's confidence in its decisions and actions.

This has begun with opening the bank doors to the public for various activities and, in particular, the creation of a museum with facts and artefacts, at the roots of the Albanian monetary system creation and its current situation. We are very proud of this museum.

As a country that is still in the first steps of this increasingly demanding process, we can gain some valuable experiences from countries, which have been already actively involved in financial education.

This experience shows that success begins with the involvement in the process of the highest management levels, such as the Governor, the Minister, and other heads of central financial and education institutions. Along the way there is a need for ongoing human and financial resources, therefore the support from decision-makers is twice as necessary. The personal involvement of the Governor and the Minister of Education during the Money Week and beyond, testifies to a clear implementation of this experience.

This very experience has shown us that, in order for the communication to be efficient, it should be addressed toward a broader audience. So, there need to be as many activities as possible that use plain and clear language for the public and as many media outlets that convey this communication. Meetings with financial agents, press releases, public interviews and open lectures are widely-used instruments in this context by the Bank of Albania, which of course, need to be intensified and be as simple as possible for the public.

Cooperation with as many partners as possible is another need of this process. Reputable institutions, such as the Bank of Albania, play a fundamental role because they have more capability to bring together organizations and contributing individuals in events which are open to the broader public. The Bank of Albania has used this asset extensively.

Alongside the active involvement of the Albanian Association of Banks and international partners, the Bank of Albania, brings together several times a year in conferences, experts, different interest groups and media representatives to help cultivate economic thinking, explain its policies and inform the public on the latest developments regarding the global economic debate.

Financial education, like any sustainable education, needs more literature and didactic materials, but these materials need to be easily understandable by the teachers. Teachers of each educational level are the best channels of this information, not just because of the extensive contact, but especially because they address to the new generation.

For more than a decade, also thanks to the relentless contribution from the Ministry of Education, Sports and Youth, and on behalf of the Bank of Albania, I would like to thank the Minister for this, we have held seminars for primary and secondary school teachers and we have designed the elective module "Personal Finances in Your Hands" for both teachers and students of high schools. Also, the Bank of Albania has drafted a series of brochures available to the public, such as: What do you understand by price stability?; Build your future-Plan your income; Short lessons on money, etc.). It has also organized many competitions for pupils and open lectures for students.

Experience has taught us that the methods used to convey knowledge and information should be as fun as possible, so that they can be easily accessible by the public as well as shedding light upon the image of the world of finance. The Bank of Albania’s publication "1,2,3 Çufo Piglet is learning to save" dedicated to the pupils of the elementary school is a success in this regard, but it needs to be followed by other publications of this kind.

The inclusion of as many contributors as possible and the incorporation of this mission into all of our everyday activities are to the benefit of everyone. But, in particular, the process of public education is very important for the central bank itself.

This because:

• a more educated public makes more efficient decisions regarding financial stability,
• it becomes more involved in the financial market, making the key interest rate, as instrument of monetary policy, more efficient,
• the rational use of financial products of deposits and loans makes the long-term planning of consumption more balanced, and thus, the prices more stable,
• through this education it is able to explain to the public what does the central bank's independence means and why is it an essential element of its ability to fulfil its mission as the authority of monetary policy.

Through the financial education of the public, the Bank of Albania makes it easier to communicate the monetary policy decisions, actions and non-interventions, the purpose and the strategy for achieving it. Only through this education, the public may build confidence in central banks and understand why price stability, which is its primary objective, is ultimately a common good.

We need to be clear on our mission: we do not intend to show the public what to think or what to decide on different issues, but simply to provide them with a set of knowledge on the basis of which individuals may make assessments and take their own decisions.

Because an individual that has more knowledge on economy and finances:

• is able to be better oriented in the labour market,
• is able to make more rational decisions to enrich himself or herself and, consequently, the country,
• will be more responsible in his role as a voter, as a consumer, as a taxpayer, and these tasks are very important for every citizen.

But is there any indicator by which we may measure the efficiency of the financial education process?

There may be several, but the most obvious and notable is only one: financial inclusion. This indicator for Albania speaks for a low level of this literacy. So that is why we are here today: to discuss and improve it.

The Bank of Albania ensures that the system provides financial services and access to credit as fairly as possible. On one hand, it regulates and supervises the system, and on the other hand, it engages many of its own capacities in the field of economic and financial education.

Regulation also ensures the fair treatment of clients by banks, enabling them to serve the whole community, including low-income groups.

If financial inclusion is improving, it means that the public is increasingly becoming part of the financial system, is using its products, and is giving its contribution to the expansion of financial intermediation.

If this intermediation expands, the economy is enriched with funds, new projects are being implemented, and the potential of the economy is expanding. Isn't the growth of well-fare the ultimate goal of everyone?

Then let us all understand that financial education means everyone being able to optimize their own welfare. This will make us all more actively involved in this process.