Financial literacy

Financial literacy is a key enabler of sustainable national and global socio-economic growth

Financial literacy is a key enabler of sustainable national and global socio-economic growth

There is a significant shift in attitude towards managing personal finances in Saudi Arabia, largely driven by a young population. The next generation wants to save, invest and better manage their finances and now has more resources and access to a range of savings and investment products.

In fact, one of the objectives of the financial sector development program, which is part of the Kingdom’s Vision 2030 economic and social strategy, is to promote and enable financial planning. While the public sector has a key role to play in ensuring the right reforms to achieve this goal, it is incumbent on the private sector to also help bridge the gap between demand, which stems from knowledge and awareness, and the offer, which stems from innovation and product development.

At SEDCO Holding, we have been championing financial education through our dedicated financial literacy program, Riyali, since 2012. By empowering young people across the Kingdom to take control of their finances, we enable prosperous socio-economic progress, helping the countries to achieve their national goals, while contributing positively to the achievement of the United Nations Global Sustainable Development Goals.

The Riyali Financial Literacy program – which loosely translates to “my money” – aims to build financial awareness in the community, develop people’s skills and equip them with the knowledge and tools to enable them to make financial decisions. wise investment. What began as a corporate social responsibility initiative by a Saudi Arabia-based family Sharia investment powerhouse, has evolved into a nationally recognized and rapidly growing program endorsed by the Ministry of Kingdom Education.

With the unwavering support of SEDCO Holding shareholders, the hard work and dedication of Riyali’s team, coupled with the ministry providing access to public schools, Riyali’s impact has been enormous. To date, the financial literacy program has taught over 1.8 million people its courses are available in almost all parts of the Kingdom targeting a range of age groups from first graders to young adults.

As part of our effort to measure the impact of the program, we surveyed 25,000 participants to find out how the program affected their financial knowledge, attitude and behavior. The survey results revealed that most of those who used the program gained greater confidence in managing their personal finances and significantly increased their financial knowledge. Most of the participants were able to apply what they learned to improve their financial situation. The survey showed that 68% said they started or thought about investing, 81% started making personal budgets and 86% started saving after taking his courses.

We are already seeing how improving the financial literacy of the Saudi population is changing investment and spending habits. For example, the latest data from the Capital Market Authority, the regulator of Saudi markets, shows that assets under management in mutual funds are increasing and retail investor activity in the Saudi stock market has also increased. .

There is also a significant increase in the number of female investors. The amount of investment portfolio accounts held by women rose from around one million in the third quarter of 2019 to 1.5 million in the same period last year.

October 2021 statistics from SAMA, Saudi Arabia’s central bank, also point to higher levels of development activity in the small and medium enterprise sector, with funds for micro, small and medium enterprises growing at a healthy pace. since 2018. The data has also indicated higher levels of homeownership, with the total number of new residential mortgages increasing significantly in recent years.

A final economic indicator that suggests a change in attitude towards spending and managing personal debt is the reduction in reliance on consumer loans and credit cards, the total value of consumer loans and credit cards that have declined over the past three years.

While several other factors come into play – such as sector reforms and policy shifts – that influence the performance of these economic indicators, we can infer that the Saudi population is moving towards greater savings and making wiser investments.

Riyali aspires to continue to expand her reach, positively influence members of society, and help young Saudis make decisions that put them on the right path to financial resilience.

But we believe that for Riyali to unlock greater potential, the time has come to turn it into its own independent foundation and become a channel through which the Kingdom can achieve its goals of enabling financial planning and supporting the world to achieve some of the UN’s enduring goals. development goals.

• Rayyan Nagadi is managing director of the investment group SEDCO Holding.

Disclaimer: The opinions expressed by the authors in this section are their own and do not necessarily reflect the views of Arab News