THE IMPORTANCE OF FINANCIAL LITERACY

Denson Dube
First Mutual Life has embarked on a financial literacy drive to enhance the knowledge, skills and attitudes of all Zimbabweans to manage personal and family’s personal finances. This initiative is aligned to the Government of Zimbabwe’s financial inclusion strategy, which is cognisant of the significant contribution of an inclusive financial sector to the socio-economic development of the country in pursuit of the Zimbabwe national financial inclusion strategy 2016-2020. In the series of articles to be published fort nightly, First Mutual Life aims to educate readers on good money management practices with respect to investing, managing risk, and retirement planning emanating from the business’ three strategic pillars of wealth creation, wealth management and risk management. The ultimate objective is empowering consumers to take action to improve their financial well-being and raise awareness on the importance of financial literacy, enabling and empowering communities, providing ideas, skills and knowledge to make the right financial decisions.
Financial Literacy
The growing sophistication of financial markets show that people are not choosing between interest rates on two different bank loans or savings plans, but are now being offered a wide range of options to choose from. It is also important to note that the responsibility for financial decisions solely lies with individuals and has shifted from the employer due to the economic conditions prevailing and the macro environment we are operating in as a nation. If individuals become financially educated, they are more likely to save and to challenge financial service providers to develop products that truly respond to their needs. First Mutual Life provides such products as the Early Harvest Plan, a savings product whose proceeds can be used for future
needs and the University Cover Plan which secures the future education of your child. The fund caters for primary/high school/ tertiary fees and associated costs for both local and international universities/ colleges. The University Plan is an affordable product where parents determine their own level of investment. “As a tertiary financial institution we are uniquely positioned to offer financial education, with the balance of theoretical knowledge such as risk, pension and retirement, with practical knowledge, thereby enabling First Mutual to give guidance on the various financial products”.
The level of financial literacy tends to vary according to education and income levels but it has since emerged that regardless of one’s social standing everyone needs basic knowledge and appreciation of financial planning. Currently a vast number of people have limited knowledge on managing risk therefore, it is our intention to highlight our efforts to ensure there is increased knowledge and skills in managing risks and life events.
It is imperative that people have knowledge of mitigation strategies to overcome lifetime risks that affect his/her life. Through our articles we intend to give readers confidence to look for different ways to reduce the risks that can affect their life and businesses as well as encourage behavioural change in money matters.
We have also noted that a considerable number of people in our society do not have concrete financial plans for old age and retirement. It is of fundamental importance to ensure that people adopt the discipline to follow an old age /retirement plan. Planning for retirement is certainly a process and requires that (i) early in a person’s life- setting aside money for retirement; (ii) during middle age- setting money aside
and buying assets and (iii) a few years leading to retirement- focus on non-financial aspects of life. To understand the key financial products one may need in life, First Mutual Life will take you on a customer life journey, and the series shall provide various articles and testaments for the benefit of consumers covering Personal Money Management, Budgeting, Savings, Loan Management, Risk Management, Insurance and Retirement.
First Mutual Life Assurance Company Private Limited is Zimbabwe’s second largest life assurance company. It is a wholly owned subsidiary of First Mutual Holdings Limited (FMHL), one of the largest diversified financial services groups in Zimbabwe today. Its primary business activities involve the provision of life assurance, retirement benefit products and other long-term financial security products. Through its two main businesses, namely Employee Benefits and the Individual Life business, the company continues to be a pace setter in the market in producing uniquely innovative Life assurance products. Amongst the products are the flexible funeral product- Funeral Cash Plan which encompasses church schemes, the e-FML mobile insurance product, the University Cover Plan, the Ultimate Life Plan and the Early Harvest Plan. Employee Benefits has an exciting product, the Umbrella Scheme, whose major focus is the Micro market. At First Mutual Life we offer the convenience of a one-step shop while offering various packages to suit different pockets.
For further advice please contact the First Mutual Life Marketing team:
Williefaston Chibaya or Mthulisi Ncube Email: wchibaya@firstmutual.co.zw mtncube@firstmutual.co.zw