Financial illiteracy, the cause of high poverty levels -Appiah

Financial illiteracy among traders and others in the informal sector has been identified as a major contributory factor to the high level of poverty in the country.

Mr. Emmanuel Mensah Appiah, Head of Audit and Risk Management Department of the Securities and Exchange Commission, said the lack of adequate knowledge by most petty traders, craftsmen, artisans and those in other vocational trades about how to manage their incomes, save and invest in other profitable ventures, was the cause of poverty among majority of them.

He was speaking at a forum on finance held in Kumasi on Friday as part of the third national financial literacy week celebration.

The literacy week seeks to raise awareness on the range of financial products and services available to consumers to help them better understand and manage their personal finances.

The Kumasi forum was on the theme: “Financial literacy- creating wealth and financial stability”, and it brought together members of trade associations, cooperative credit unions, market women, artisans and other small scale-business groups.

Representatives from the Bank of Ghana (BOG), National Insurance Commission, Insurance companies, Securities and Exchange Commission and the National Pension Regulatory Authority, took turns to educate the gathering on the various financial and insurance products and services as well as the legal and regulatory framework of the financial sector.

Mr. Appiah said reasonable level of financial literacy would help traders and small scale entrepreneurs to cultivate the culture of savings to aid the expansion of their businesses.

He advised that they saved their monies with credible and licensed financial institutions in order not to fall victim to fraudsters.

Ms Marian Mensah, Coordinator of the Programme, said one of the most important and prudent lessons of life bordered on how to achieve and maintain financial security.

She said it was important for individuals to avail themselves to opportunities to learn personal financial skills.

Ms Mensah said it was the conviction of the government that promoting financial literacy would empower consumers and small businesses to manage risk, deal effectively with market complexity and take advantage of increasing competition in the financial sector towards a strong economic growth.**