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Financial Education in Romania

The Romanian Association of Banks (RAB) is of the opinion that financial education should become a national priority.
Fourteen years after its European Union (EU) accession, Romania ranks last in the EU in terms of financial inclusion (67%), financial intermediation (26.8%), the level of financial education (22%), and, with some exceptions, the level of economic welfare (69% of the EU average). At global level, about one in three citizens has received some form of financial education, while in Europe, 52% of adults have financial education.

There is an intrinsic link between the level of financial intermediation and inclusion and the level of financial education. During the pandemic, we have seen an increase in financial inclusion. Two out of three Romanians (67%) use all types of banking products and services, according to the survey ‘Romanians’ perception of banking sector digitalization’ drawn up by the Romanian Institute for Evaluation and Strategy (IRES).
The low level of financial inclusion has as cause the low level of financial education. A 2020 OECD survey notes that Romania has a low score in terms of financial literacy. The average financial literacy score in the participating countries stands at 12.7 in 21 countries and at 13 in the countries that are OECD members. Lower scores received adults in Italy (11.1), Romania (11.2) and Columbia (11.2).
A low level of financial education represents one of the main barriers for a country’s economic development. A better level of financial education leads to an increase in people’s financial welfare. The absence of mentors helping people achieve an adequate educational development can lead to more pauperization. In Romania, almost one out of four people live on the verge of poverty. The poverty risk rate stood at 23.5% in 2018, being the highest in the EU27, where the average was 16.8% at the time.

In Romania, the GDP/capita - the indi­cator that measures individual economic welfare - stood at €8,780, being one third of the EU-27 average of €26,290, in 2020, obviously on a downward trend compared to 2019, amid shrinking economy due to the pandemic.
Other structural problems are related to the budget allocated for education and the absence of any progress. We should worry about the indicator included in the ‘Education and Training Monitor’ 2019, mentioning that over 40% of the learners aged 15 do not possess adequate competences in reading, maths and sciences, while the European average is half of that; the situation is more or less unchanged from one decade ago. But there are also some positive aspects here.
Romania is one of the European fore­run­ners on fostering and  introducing financial education as a mandatory school subject. Starting last year, financial education has become a mandatory subject for eighth grade students, being included in the “Social Education" subject. Romania, the Czech Republic, Denmark, Portugal and Sweden are some of the European Union Member States that have introduced financial education as a standalone, mandatory subject or via other subjects. What is important here is the word "mandatory," because it is the word that will generate certain long-term outcomes for the future generations. At European level, there are about 20 states that have taken action, making this subject mandatory, as a main subject or as a sub-subject. Moreover, in Romania, all the learners enrolled in undergraduate education can benefit from optional courses on financial education. We have witnessed a multitude of projects in this area lately.
In order to carry out the objectives under the strategic pillar called ‘Financial Education,’ RAB aims at consolidating its partnership with the relevant authorities and carry out pro­grams on financial education that include a digital education component.

In 2018, the Ministry for Education and Research (MEC), the National Bank of Romania (NBR), the Ministry of Finance (MF), the Financial Supervisory Authority (FSA), and the Romanian Association of Banks signed a Collaboration Agreement in order to carry out joint activities in the field of financial education and to create the National Strategy on Financial Education (NSFE). The main common projects in progress are:
- The Financial Education Committee draws up the draft of the National Strategy on Financial Education, draft that is to be posted for public consultation during 2021, so that all stakeholders can bring their contribution.
- NBR, RAB and FSA through the Romanian Banking Institute (IBR) received the accre­dita­tion from the Ministry of Education and Research for the only complete financial education course for teachers who teach “Social Education" to eighth grade students. Thus, the banking industry contributes directly to the training of the young generation and to increasing the level of financial education. This year, we expect to train 350 teachers, the course being accredited for four years.
- In partnership with a number of public in­sti­tutions (NBR, FSA, MF, MER), RAB has built the National Strategy on Financial Education website,, where all project developers can promote their educational program in an integrated manner at national level. Starting 2018, the five organizations invited the entities engaged in financial edu­ca­tion projects to post their own programs on the  platform, under the sec­tion The White Book.
- The Financial Supervisory Authority, the National Bank of Romania, the Ministry of Finance and the Romanian Association of Banks jointly provide the FinClub financial education program, targeting high school students in the 10th-12th grades with a passion for the financial market.
In parallel, RAB’s own  financial education programs deployed this year include the following (the list is not exhaustive):
- RAB has continued its ongoing training program named "Financial & Banking Educa­tion for Teachers," having already trained 550 teachers who teach financial edu­cation to students from first to 12th grade. This is the first course dedicated to Romanian teachers that aims at helping them better understand key concepts regarding the func­tioning of the banking sector, as those concepts are taught to students during edu­cational, economics and financial /entre­pre­neurship classes.
- RAB has become an affiliate member of the Organization for Economic  Cooperation and Development (OECD) - the International Network for Financial Education. Receiving this affiliate member status is a recognition of RAB’s efforts in the area of financial education programs, in line with our objective as an organization, namely to support Romania’s economy and to enhance the level of financial education in the country.
- DreptulLaBanking platform - a project initiated by the banks operating in  Romania - has already launched the third season of the online financial education show called “La Taclale și parale”. The online quiz show was launched last year and was hosted by Cabral. Since the start of the “La Taclale și parale" show, its awareness has exceeded three million Romanians, who read the messages about the organization of the show, while one million people have watched it.  In the second half of 2021, the show will reach its fourth and fifth seasons, so we kindly invite all the people interested to test their financial knowledge.
- Over 1,600 students aged 13-15, from 125 schools, high schools and national-level colleges attended the third edition of the national final of the ‘European Money Quiz,’ organized by the Romanian Association of Banks; the number of participants and of schools doubled from last year. Two students from the Timișoara-based “Emanuil Ungu­reanu” Technical College and from Bucharest's “Avram Iancu” Secondary School represented Romania in the European final of the financial education competition the ‘European Money Quiz,’ which took place on-line in April 2021, and was attended by 28 European states. The ‘European Money Quiz’ is a common financial literacy initiative of the European banking associations under the coordination of the European Banking Federation (EBF). In Romania, this project is implemented by the Romanian Association of Banks in its capacity of EBF member, via an educational partnership with the Romanian Banking Institute.
All these programs are developed by the Romanian Association of Banks on behalf of its member banks. Many of these projects can be found on the platform, next to the financial education projects developed by credit institutions.
A  joint public-private effort is needed here, and the banking sector aims at  contributing to enhancing the financial education level in the country.
A solution for a better financial integration is, among others, the implementation of a European program on increasing the level of financial education. As such, the cornerstone of this harmonization should be the introduction of financial education in the school curricula as a mandatory subject for all the European Union citizens.
The more affected some EU economies are by the low level of financial education, the more negative consequences need to be anni­hilated by the European family, such as an in­creasing level of poverty and social exclusion, the migration phenomenon etc. And Romania has to fully face all these phenomena.

This is also available in our print edition of Business Arena.

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