FINANCIAL EDUCATION IN ROMANIA

The Romanian Association of Banks (RAB) is of the opinion that financial education should become a national priority. After 14 years since the integration in the European Union, Romania is the European state ranking last in the EU as regards financial inclusion (67%), financial intermediation (26.8%), the level of financial education (22%) and, with some exceptions, the level of economic welfare (69% of the EU average). At global level, about one out of three citizens has some financial education, while in Europe, 52% of adults have financial education.

Between the level of financial intermediation & inclusion and the level of financial education there is an intrinsic link. During the pandemic, we have remarked an increase in financial inclusion. Two out of three Romanians (67%) use all types of banking products and services, show the conclusions of the survey ‘The Romanians’ perception of banking sector digitalization’ drawn up by the Romanian Institute for Evaluation and Strategy (IRES). The low level of financial inclusion has as cause the low level of financial education. An OECD survey from 2020 mentions that Romania has a low score as regards financial literacy. The average score for financial literacy in the countries participants to the OECD survey stands at 12.7 in 21 countries and at 13 in the countries that are OECD members. Lower scores belong to the adults from Italy (11.1), Romania (11.2) and Columbia (11.2).

A low level of financial education represents one of the main barriers for a country’s economic development. A better level of financial education leads to an increase in people’s financial welfare. The absence of mentors bringing about people’s adequate educational development can have as consequences more pauperization. In Romania, almost one out of four people live on the verge of poverty. The poverty risk rate stood at 23.5% in 2018, being the highest in the EU27, where the average was then 16.8%. In Romania, GDP/capita – the indicator that measures individual economic welfare – stood at €8,780, being one third of the EU-27 average of €26,290, in 2020, obviously on a downward trend compared to 2019, contemplating the economy’s shrinking in the context of the pandemic.

Other structural problems are related to the budget allocated for education and the absence of any progress. We should worry about the indicator included in the ‘Education and Training Monitor’ 2019 mentioning that over 40% of the learners aged 15 do not possess adequate competences in reading, maths and sciences, contemplating the fact that the European average is half this percentage; this situation mentioned above is more or less similar to the situation one decade ago. But there are some positive aspects here as well.

Romania is one of the forerunners among European states as regards fostering and introducing financial education as a mandatory school discipline. Starting with last year, financial education has become a mandatory discipline for the learners in the 8th grade, being included in the “Social Education” discipline. Romania, the Czech Republic, Denmark, Portugal and Sweden are some of the European Union Member States which have introduced financial education as a standalone mandatory discipline or via other disciplines. What is important here is the word “mandatory” because it is the word that will generate certain long-term outcomes for the future generations.

At European level, there are about 20 states which took action as regards the compulsoriness of this discipline, as a main topic or as a sub-topic. Moreover, in Romania, all the learners enrolled in undergraduate education can benefit from optional courses on financial education. Here as well, we have been witnessing a multitude of projects, lately. In order to carry out the objectives under the strategic pillar called ‘Financial Education’, RAB aims at consolidating its partnership with the authorities in charge and at carrying out programmes on financial education which have included a component on digital education. In 2018, the Ministry for Education and Research (MER), the National Bank of Romania (NBR), the Ministry of Finance (MF), the Financial Supervisory Authority (FSA) and the Romanian Association of Banks concluded a Collaboration Agreement for the carrying out of common activities in the financial education field and for the drawing up of a National Strategy on Financial Education (NSFE). The main common projects in progress are:

• The Financial Education Committee draws up the draft of the National Strategy on Financial Education, draft that is to be posted for public consultation during 2021, so that all stakeholders can bring their contribution.
• NBR, RAB and FSA via the Romanian Banking Institute (RBI) accredited at the Ministry for Education and Research the only complete course on financial education written for the teachers who teach the learners in the 8th grade the mandatory discipline “Social Education”. Thus, the banking industry contributes directly to the training of the young generation and to increasing the level of financial education. This year, we expect to train 350 teachers, the course being accredited for a period of four years.
• RAB, in a partnership with some public institutions (NBR, FSA, MF, MER), has built the site on the National Strategy on Financial Education www.edu-fi n.ro where all project developers can promote at national level their educational programmes in an integrated manner. The five partner institutions have invited the entities engaged in projects on financial education to post their own programmes starting with the year 2018 on the platform www.edu-fi n.ro, under the section The White Book.
• The Financial Supervisory Authority, the National Bank of Romania, the Ministry of Finance and the Romanian Association of Banks roll out as partners the FinClub programme, a programme on financial education targeting high school learners in the 10th-12th grades with a passion for the financial market.
• In parallel, RAB’s own programmes on fi nancial education deployed this year include, among others, the following (the list is not exhaustive):
• RAB has continued its Programme on Ongoing Training called “Financial & Banking Education for Teachers” having already trained 550 teachers who teach the learners in the 1-12 grades financial education. The course is the first crash course dedicated to the Romanian teachers having as aim to understand and to deepen key concepts as regards the operating of the banking sector, concepts taught to learners during educational, economics and financial /entrepreneurship classes.
• RAB has become an affi liate member of the Organization for Economic Cooperation and Development (OECD) – the International Network for Financial Education. The granting by OECD of the affiliate member status in the International Network for Financial Education represents the recognition of RAB’s actions related to financial education programmes, in line with the aim we committed to as an organization, namely to support Romania’s economy and to enhance the level of financial education in the country.
• The platform DreptulLaBanking – a project of the banks operating in Romania – has already rolled out the third season of the online show on financial education in Romania called “La Taclale și parale”. The online show which is devised as a financial knowledge contest was launched last year and was hosted by Cabral. Since the start of the “La Taclale și parale” show and to date, awareness exceeded 3 million Romanians who have read the messages on the organizing of this show, while 1 million people have watched it. In the second semester 2021 the show’s fourth and fifth seasons will be broadcast, so we kindly invite all the people interested to test their financial knowledge.
• Over 1,600 learners aged 13-15, from 125 schools, high schools and national-level colleges attended the third edition of the national final of the contest called the ‘European Money Quiz’ organized by the Romanian Association of Banks; the number of participants and of education providers doubled compared to last year. Two students from the Timișoara “Emanuil Ungureanu” Technical College and the Bucharest “Avram Iancu” Secondary School represented Romania in the European final of the financial education contest the ‘European Money Quiz’ which took place on-line in April 2021 and was attended by 28 European states. The ‘European Money Quiz’ is a common financial literacy initiative of the European banking associations under the coordination of the European Banking Federation (EBF). In Romania, this project is implemented by the Romanian Association of Banks in its capacity of EBF member, via an educational partnership with the Romanian Banking Institute.

All these programmes are developed by the Romanian Association of Banks on behalf of its member banks. Many of these projects can be found on the platform www.edu-fi n.ro, next to the financial education projects developed by credit institutions. A public-private common effort is needed here and the banking sector aims at contributing to enhancing the financial education level in the country.

A solution for a better financial integration is, among others, the implementation of a European programme on increasing the financial education level. As such, the cornerstone of this harmonization should be the introduction of financial education in the school curricula as a discipline mandatory for all the European Union citizens. The more affected some EU economies are by the low level of financial education, the more negative consequences need to be annihilated by the European family, such as an increasing level of poverty and of social exclusion, the migration phenomenon etc. And Romania has to fully face all these phenomena.

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