Ministry of Finance and Bank of Russia discuss financial literacy as part of national projects

This decision was made on 28 December at the meeting of the Interagency Coordination Commission (ICC) tasked with the implementation of the Strategy for the Improvement of Financial Literacy in the Russian Federation in 2017–2023. The ICC will consider suggestions from the meeting participants already in 2021.

 ‘Financial awareness is closely related to the progress towards the national goals. If a household is financially sustainable, it is much easier for it to plan its life, achieve personal goals and make progress, improve living conditions, and keep up with digitisation,’ said Russia’s Minister of Finance Anton Siluanov.

The ICC co-chairpersons proposed to amend the Strategy for the Improvement of Financial Literacy in the Russian Federation in 2021–2023 taking into account the goals for enhancing Russian households’ financial sustainability. ‘Programmes aimed at improving Russians’ financial literacy should be part of long-term planning components, public finance issues, and tax and budget culture. People’s financial security is a crucial task of financial awareness. To this end, Russia’s Ministry of Finance and the Bank of Russia expand awareness-raising work with regulatory measures. Amendments to the law ‘On Consumer Loans’ have already been prepared and considered in the first reading. Banks will be prohibited to impose any additional services, whether insurance or legal services, for instance,’ said Anton Siluanov.

According to Bank of Russia Governor Elvira Nabiullina, it is essential to pay more attention to investment literacy. ‘This year, we have a significant inflow of retail investors, and we have revealed unfair sales of complex financial instruments, misselling, and other unfair practices. We are currently devising measures that would protect newcomers in the investment market. However, it is critical to help people grasp how the financial market operates and how to correlate their personal financial goals with financial instruments that would enable them to address particular issues,’ stressed Ms Nabiullina.

Participants in the meeting discussed issues related to how integrate into the strategy the components of investment and digital financial literacy, the programmes for self-employed and small and medium-sized enterprises.

‘The sticking point is that people only start to search information after they have faced problems in their lives, when they have been defrauded, or are unable to repay loans,’ Ms Nabiullina explained. ‘We need to ensure that information is provided to people before they face hardships. People should have a certain knowledge base. Therefore, we should enhance communication channels and focus more on the advancement of online formats. This is needed not only due to the effective anti-pandemic restrictions, but also because these formats enable us to reach people in the most remote areas.’

The ICC co-chairpersons also emphasised the need to take joint efforts in order to combat telephone and cyber fraud in the financial sector.

The participants in the meeting summed up the results of the implementation of the previous stage of the Strategy. By the level of financial literacy, Russia became one of the top ten countries among those surveyed by the OECD in 2020. Russia has created conditions for the most large-scale outreach campaign in Russia’s contemporary history.

Efforts taken for over ten years to improve financial literacy have enabled the country to build a mature infrastructure. The methodological centres of Russia’s leading economic universities, including the Lomonosov Moscow State University, the HSE University, the Russian Presidential Academy of National Economy and Public Administration, and the Financial University, are developing educational programmes and materials and upgrading instructors’ skills.

According to the recent study by the Public Opinion Foundation, Russians’ financial literacy index has risen from 52 to 54 points since 2017, which is rather significant progress over this short period. This index reflects the level of Russians’ financial knowledge, their financial preferences and behaviour. The key driver of this improvement was the change in Russians’ financial behaviour that has become more conscientious and rational. Furthermore, studies show that the regions implementing comprehensive financial awareness programmes demonstrate better progress compared to the country-wide level.  A large number of Russia’s constituent territories have established regional centres promoting financial literacy and expert councils. Over one-half of the constituent territories have launched and are successfully carrying out relevant regional programmes. 32,000 Russian schools have financial literacy lessons, which are mandatory in every fifth of these schools. More than 5.7 million schoolchildren were taking lessons under financial literacy programmes during the past academic year. Over the three last years, more than 73,000 teachers were trained to conduct such lessons.

The ICC members stressed the need to ensure the system-level implementation of such comprehensive programmes in all regions.

The ICC invited new participants to attend the meeting, including from the Ministry of Digital Development, Communications and Mass Media and the Ministry of Labour of the Russian Federation, the Federal Service for Supervision in Education and Science, the Agency for Strategic Initiatives, the Financial Literacy Development Association, and the Financial Research Institute of the Ministry of Finance of the Russian Federation. The Financial Research Institute is the coordinator of the Strategy on behalf of Russia’s Ministry of Finance.

The ICC made the decision to update the approaches to implementing the Strategy and prepare a coordinated action plan for 2021 H1.

Background information

The Strategy for the Improvement of Financial Literacy in the Russian Federation was approved on 25 September 2017. The Strategy was developed for the period until 2023 and is aimed at increasing the number of financially aware people. This is the first strategic document of such a scale in the area of financial literacy in the Russian Federation that will ensure coordination and system-level partnership among all stakeholders, including federal and regional authorities, the business community, and the educational community.

The Interagency Coordination Commission tasked with the implementation of the Strategy for the Improvement of Financial Literacy in the Russian Federation in 2017–2023 was established in 2018 to coordinate measures taken within the implementation of the Strategy by federal executive authorities, regional and municipal authorities of the Russian Federation, the Bank of Russia, and organisations. In its activities, the ICC is governed by the Constitution of the Russian Federation, federal laws, regulations issued by the President of the Russian Federation, and the regulations of the Government of the Russian Federation. The ICC’s key tasks include the coordination of communication between stakeholders in the course of the implementation of the Strategy and control over its implementation, as well as the analysis of the progress towards the implementation of the Strategy, and the preparation of suggestions on how it may be enhanced.

The Federal State Budgetary Institution Financial Research Institute is subordinate to the Ministry of Finance of the Russian Federation and has been providing research and expert support to Russia’s Ministry of Finance for over 80 years by now.