App to hike financial literacy to tackle household debt
THE Citi Foundation, the Kenan Institute Asia and the Labour Ministry are promoting a mobile application designed to improve financial literacy of university students, farmers and the private sector in a bid to reduce household debt in the country.
The app is called Smart Workers Smart Money.
Despite the ratio of household debt to gross domestic product declining to 81.3 per cent (Bt11.24 trillion) in the second quarter, from 84.2 per cent in the first quarter of 2014, Piyabutr Cholvijarn, president and vice chairman of the Kenan Institute Asia, said a comfortable figure would be below 50 per cent.
That is the situation in best-practice countries, he said.
“It is very challenging for the country to reduce its debt, especially the debt of informal workers who pose difficulties when trying to identify their debt situation,’ he said. “We are worried about the debt situation of university students because this segment has no income but they have high consumption particularly buying goods via the online channel.”
There are about 12.8 million students, including university students in Thailand. Kenan said that as students are finding it difficult to manage their debt, it could ask for the Labour Ministry’s cooperation to help students.
Kenan spent three years conducting research in literacy improvements for better finance in Thailand and found that many university students, farmers and private sector workers struggled with financial literacy.
There are 38.4 million workers in the private sector, the biggest worker group in the country, of which 23 million are informal workers. The research found that 83 per cent of them have low to average financial literacy.
According to the Labour Ministry, a high number of workers aged 25 to 35 between 2011 and 2013 had a high debt burden.
Vira-anong Chiranakhon Phutrakul, consumer business manager for Citi Thailand, said Labour Ministry data showed a lot of students as well as private sector workers aged 25-35 used social media.
She said that in the digit era, a digital tool like Smart Worker Smart Money was the proper way to educate those segments.
She said that Citi Foundation, Kenan and the Labour Ministry expected to make more than 3 million people in the three risky segments financially literate.
