Financial Literacy for the Overlooked

The delegate of the Kingdom of Sweden (Sweden) initiated the discussion on integrating financial literacy as a key element to enhance the understanding of microfinance, providing a case study in which three different individuals – an ex-convict, a drug addict, and a student with debt – were grouped under a single financial program (or domain). The delegate further elaborated on how this led to conflicting financial needs and priorities, proposing assessment by non-profit banks as the way forward.

The delegate of the People’s Republic of Bangladesh (Bangladesh) sided with the proposal, adding the suggestion that pre-loan financial tests be undertaken by borrowers. The delegate of the Swiss Confederation (Switzerland) seconded this proposal and added that the pre-loan financial tests should be administered not only to borrowers but also to lenders, to ensure high standards of financial literacy among all parties. The delegate further proposed peer-to-peer lending as an initiative to help alleviate financial distress.

The delegate of the People’s Republic of China (China) supported Switzerland’s proposal and proposed utilizing Artificial Intelligence (AI)-powered loans that assess the borrower’s ability to pay by incorporating factors such as payment history and social media activity. The delegate of China further proposed incorporating blockchain as a means to assist people.

The delegate of Sweden strongly refuted China’s proposal, adding that blockchains are essentially banned in Algeria and face heavy restrictions enforced by many developed and developing countries. The delegate concluded by proposing the involvement of World Bank schemes and programs to ensure strong financial literacy on a global scale.