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Improving awareness and understanding of financial issues and services, as well as consumer rights, is a first step to re-building public trust in the financial sector.
The financial crisis has hit hard low- and moderate-income households, and emerging middle class citizens. Borrowers are having difficulty making loan payments, and some have lost a portion of their deposits to failing banks. Public trust in financial institutions is very low among Ukrainians, undermining efforts to create a resilient financial sector that can channel savings into productive investment and economic growth.
In order to improve financial education and consumer awareness among Ukrainians, the Project is developing educational materials to be distributed in cooperation with both private and public sector institutions. This material will cover a range of subjects, from family budgeting to calculating a mortgage and to understanding the risks and obligations that Ukrainian consumers take on when they sign up for consumer loans, mortgage loans, and other products. The Project is also launching a Financial Awareness Toolkit which is aimed at providing consumers and NGOs with easy-to-use educational material about key financial matters. The on-line toolkit will include brochures, booklets, calculators, tests, quizzes and will be accessible to all interested parties as freely downloadable in printer- and reproduction-friendly formats. ...
As the media is a prime source of information for a majority of Ukrainians, it can play a key role in transmitting clear and objective information about financial services. However, to increase and improve coverage of financial issues by non-specialist media outlets, journalists need technical support. A series of specially tailored media programs, implemented with the support of journalists’ organizations and banks, will provide Kyiv and regional journalists with essential knowledge and new insights into the financial sector. ...
Helping Ukrainians understand the new pension system is another object of FINREP’s mission. The Government plans to implement a mandatory pension scheme in January 2012 where young workers’ contributions will be invested in capital markets.
Much of the financial education and consumer protection program developed by FINREP is informed by a baseline survey of financial awareness and a series of tailored focus group discussions held in September - October 2010 to establish a detailed picture of financial knowledge and financial consumer rights’ awareness. These survey results constitute part of FINREP’s support to public and private institutions helping them develop their own financial education strategies. Other research initiatives will include analyses and diagnostics reviews to assist state and private sector institutions in their work to promote strengthening financial consumer protection and financial literacy. ...
Protection of consumer rights in the financial service sector is also a key part of FINREP’s agenda. At this stage it is crucial to improve Ukraine’s regulatory framework for consumer protection through amending several laws/legislative regulations. This will help to create an institutional structure for financial consumer protection. FINREP supports improvement of Consumer Protection Law and relevant banking legislation by including requirements which provide for more balanced provisions in consumer loan agreements, and for effective legal remedies. ...
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