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FINANCIAL literacy day was observed across the country for the third time on March 3 this year. In 2022, Bangladesh Bank issued a circular declaring the first Monday of March as this day to be observed annually. The same circular also introduced the financial literacy guidelines for banks and financial institutions, aimed at strengthening financial inclusion and expanding financial knowledge across the country. The guideline also included a directive to observe financial literacy week each year.

Following this policy, Bangladesh Bank has asked banks and financial institutions to observe financial literacy week from March 17 to 23 this year. However, considering the month of Ramadan, activities have been advised to remain limited in scale.

Financial literacy is the ability to understand and manage money effectively. It includes planning income and expenses, developing saving habits, understanding loans and interest rates, evaluating investment options and identifying financial risks. These skills are not only essential for individual wellbeing but are also linked to the economic strength of a country.

Globally, countries observe this day and week through various initiatives to promote financial education among their citizens. In developed countries, such initiatives are widespread and well integrated into daily life. In Bangladesh, these efforts are now beginning to gain traction, and deserve attention and support.

According to the financial inclusion department of the central bank, this year’s financial literacy day was marked through a series of offline and online events conducted by banks and financial institutions. These events aim to make people more aware of financial tools and services and help them to manage their money wisely and make informed decisions.

The importance of financial literacy cannot be overstated. It shapes how people save, invest and plan for the future. It also strengthens the economy by encouraging responsible financial behaviour. When people are financially aware, they are better equipped to face emergencies, avoid unnecessary debt and build long-term financial security.

Financial literacy helps bridge the gap between economic opportunity and financial capability. While it is a personal skill, its impact goes far beyond the individual level. It influences national savings rates, household investment trends and overall economic resilience.

Yet, financial awareness remains low in many parts of the world. The World Bank reports that around 45 per cent of the adult population globally remains unbanked. This is a significant barrier to economic progress, especially in countries like Bangladesh, where financial literacy is still developing.

Despite initiatives from the government, Bangladesh Bank, and several non-governmental organisations, about 30 million people in Bangladesh remain outside the formal banking system. Surveys indicate that only 33 per cent of adults across the world are financially literate. This means that nearly 3.5 billion people lack even basic financial knowledge, most of whom live in developing countries.

The history of financial literacy dates back centuries. In 1737, Benjamin Franklin published a pamphlet titled ‘Hints for Those That Would Be Rich’, which offered practical financial advice. ‘A penny sav’d is twopence clear,’ he wrote, stressing the importance of saving even small amounts. In that era, financial advice usually came from parents, friends, or community elders, as formal financial education did not yet exist.

In fact, banking itself has a long history. In 1401, the Italian government founded the Bank of Barcelona, marking one of the earliest formal steps in financial systems. The 1800s saw the spread of banking institutions and the gradual rise of financial awareness. By then, people had begun to understand the importance of saving and borrowing.

The modern banking system evolved over the next two centuries. Central banks and regulatory bodies were established. Banking services became more accessible to ordinary people. Financial education began to enter schools and colleges. The introduction of credit and debit cards further underlined the need for financial management.

With the arrival of digital banking, the scope of financial literacy expanded. Internet banking, mobile financial services, and digital payment systems became common. Governments and private organisations introduced targeted programmes to help people adapt to these changes. Even in developing countries, efforts toward financial inclusion became more prominent.

The formal concept of financial literacy as we understand it today began gaining momentum globally in the 1990s. In 2003, the Organisation for Economic Cooperation and Development launched a financial education programme across Europe and the United States. That same year, the United States government formed the Financial Literacy and Education Commission to promote financial awareness. European countries also began including financial education in school curricula.

India, too, took steps in this direction. In 2013, commercial banks set up financial literacy centres across the country. Earlier, in 2005, a pilot project in Mangalam village aimed to provide banking facilities to all families — a milestone in financial inclusion.

Yet, the gap remains wide. In India, while the general literacy rate stands at 77 per cent, financial literacy is only 35 per cent. The United Nations has recognised this issue, listing financial education and inclusion as key goals under its Sustainable Development Goals 2030. The World Bank and International Monetary Fund have also launched initiatives in several developing countries.

In Bangladesh, financial inclusion received a boost with the launch of various programmes by Bangladesh Bank since 2010. These include school banking, lead bank conferences, agent banking, no-frills accounts, nano loans, mobile banking and digital banking services. In 2017, Bangladesh Bank introduced the ‘National Financial Inclusion Strategy’, which expanded financial literacy initiatives to schools and other institutions.

The rise of digital banking has further broadened awareness. As of November 2024, there were over 237 million registered mobile financial service accounts in Bangladesh. In the same month, total transactions reached 652 million, with a total value of Tk 1,567.87 billion. However, only about 88 million accounts were active users, showing there is still a long way to go in terms of meaningful financial participation.

Bangladesh’s young population has started to respond to these changes. Many youths are now investing in the capital market, where 70 per cent of retail investors are under the age of 45. Still, the financial literacy rate among youth remains below 50 per cent globally. This is a serious concern, as young people will shape the financial future of the nation.

Global comparisons also reveal the gaps. In Denmark and Norway, financial literacy among adults stands at 71 per cent — well above the global average. But in many emerging and developing economies across Eastern Europe, South Asia, the Middle East, Africa and Southeast Asia, the rate is far lower.

In some countries, the figures are alarmingly low. Financial literacy rates in Afghanistan, Albania and Angola remain below 15 per cent. Such deficits can severely hamper national development and social mobility.

Bangladesh, despite progress in several economic indicators, has a financial literacy rate of only 28 per cent. This figure highlights the scale of the challenge ahead. The gap in financial literacy between men and women in Bangladesh is another pressing issue. While 62.86 per cent of adult men access formal financial services, the rate for women is only 43.46 per cent. This disparity stems from deep-rooted social norms, cultural barriers, limited mobility and financial dependence — especially in rural areas where 68 per cent of women live.

Bridging this gap is essential not only for achieving gender equality but also for national development. A financially literate population is a strong foundation for a resilient economy.

The efforts taken so far — school banking, digital finance, agent outlets and financial literacy campaigns — are commendable. But more needs to be done. Financial education must be included in mainstream school curricula. Campaigns must reach marginalised communities, especially women and rural populations. Institutions should simplify financial information so that people of all backgrounds can understand and benefit from it.

Financial literacy is not just about numbers or bank accounts. It is about empowerment. It is about knowing how to protect one’s savings, invest wisely, avoid debt traps and plan for the future. It is the key to economic independence and a more inclusive society.

If Bangladesh wants to move forward with sustained growth, financial literacy must be treated as a priority — not as an annual event but as a continuous commitment.

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M M Mahbub Hasan is a banker and development researcher.