There was a time when financial education was regarded as a specialization subject and, in fact, the common people actually had not much need for it either. Life was simpler back then and financial literacy was actually not a necessity. Things, however, have changed a lot today and one is now considered handicapped if they are not financially literate. This change, to a large extend, is due to internet penetration and the availability of affordable data leading to a digital economy. Unfortunately, in India, it is reported that more than 75 per cent of adults do not adequately understand basic financial concepts. According to Asian Development Bank, only 27% of Indian adults – and 24% of women – meet the minimum level of financial literacy as defined by the Reserve Bank of India. The percentage in most likelihood could be much lesser in Nagaland.
As per the National Centre for Financial Education Report 2015, financial literacy in Nagaland is only 8% and it is reported that only 24% of the Indian adult population is financially literate. Naga people, especially the young people aren’t able to manage their income. There’s a misbalance between consumption and savings. Savings and investment are alien concepts for the majority of the Nagas. In schools, financial education is selectively taught to students who want to pursue a career in the same. Most of the people as well as organizations make flawed financial decisions as they lack financial planning. Only with financial education can people manage their finances effectively. The need for financial education in Nagaland today is so dire that it can be argued that schools need to make financial education compulsory for all. If you ask 100 students if they were ever taught about financial literacy and management in school or college, the answer would most probably be zero percent. That is why most Naga people even today do not know the definitions of financial terms like investment, income, savings, budgeting, etc. Financial literacy is one of the biggest assets of any country or state and it is directly proportional to economic growth. The slow economic growth of Nagaland is directly proportionate to the low level o bf financial literacy among the Naga people. Apart from the government, efforts must be made by all sections of the society to strengthen financial education in Nagaland. The ongoing financial literacy campaign undertaken by the Ongpangkong Kaketshir Mungdang is a much needed and laudable exercise.
Many people in Nagaland lack financial education which is why they resort to loan sharks exposing them to cycles of debt or fall easy prey to scams and frauds. People being lured to the Ponzi scheme of Zolando recently is a classic example. Financial literacy is important because it equips us with the knowledge and skills that we need to manage money effectively. Without it, our financial decisions and the actions we take—or don’t take—lack a solid foundation for success. And this can have dire consequences, both to the individuals and to the society as a whole. We can be financially empowered only when we are financially literate.