FINANCIAL EDUCATION PROGRAMMES ORGANISED BY MOSQUES AS A PLATFORM TO INCREASE FINANCIAL LITERACY IN MALAYSIA

Abstract

Financial literacy is the education and understanding of various financial areas including topics related to managing personal finance, money and investing. A financially literate person will be able to manage personal finance matters efficiently, including making appropriate decisions about investing, insurance, real estate, college fees, budgeting, retirement and tax planning. In Malaysia, (1) many are still without the recommended minimum savings of three months salary; while (2) many others take out debt more than the recommended debt service ratio (DSR) of 40 per cent. In fact, more than 100,000 people had been declared bankrupt between 2010 and 2015; and, (3) many others who are not able to make ends meet. Unfortunately, the majority of those affected were Muslims. Hence, one of the ways to help society deal with such a financial problem is to make them financially literate through financial education. One of the institutions with the potential of doing so is the mosque. In Islam, mosques are not only for worship, but also as centres for developing the ummah. Through knowledge-based activities such as talks and lectures, mosques can develop the minds of congregants for their benefit in the worldly life and the Hereafter, including that of financial literacy. Mainly through Friday sermons (Malay: khutbah Jumaat), mosques can start to create awareness among their congregants on personal financial management. However, more can be done to increase the financial literacy of the ummah. This article looks into the state of financial literacy in Malaysia and its implications as well as provides recommendations on how mosques can play their roles in increasing financial literacy.