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Compliance Training for Financial Institutions in El Salvador Leads to Significant Drop in Financial Education Gap

El Salvador’s National Financial Education Strategy has achieved remarkable success in promoting financial education among its citizens, resulting in a significant reduction of nearly 15% in the country’s financial education gap. This milestone was achieved through the joint efforts of the National Council for Financial Inclusion and Education (CNIEF), comprising Banco Central de Reserva de El Salvador and ten member institutions.

The Origins of the Strategy

Established in 2019, the CNIEF aimed to address the lack of financial inclusion and education in El Salvador. One of its primary objectives is consumer empowerment and protection, which has led to significant advances in financial education. The country’s first National Financial Education Strategy was developed following a national survey conducted in 2016, revealing that:

  • 49% of the population considered credit problematic
  • 94% lacked any form of financial education

The National Financial Education Strategy

This comprehensive strategy consists of 81 activities divided into three strategic areas:

Priority Segments

  • Education sector
  • Micro, small and medium enterprises and businesses
  • Salaried population
  • Migrant communities
  • Vulnerable groups

Cross-Cutting Initiatives

  • Financial education and related activities
  • Accessibility and communication

Communication and Accessibility

  • Virtual classroom courses
  • Interactive financial calculators
  • Apps for personal finance management
  • Interactive games on financial education for children

Implementation and Results

In October 2022, the CNIEF created a financial inclusion and education website to facilitate access to these resources. Additionally, 20 supervised financial institutions signed a Technical Cooperation Agreement on financial inclusion and education, aiming to coordinate the creation of financial education programs.

To monitor progress, the CNIEF conducted the National Financial Capabilities Survey in 2022. The results showed that:

  • The Financial Education Indicator has increased to 11.75 points, representing a 14% improvement compared to 2016

This success is attributed to the coordination among institutions in promoting financial education activities and implementing them across a broader extent of the Salvadoran population.

Conclusion

El Salvador’s National Financial Education Strategy serves as a testament to the power of coordinated efforts in promoting financial and social well-being by encouraging the dissemination and implementation of basic but crucial financial knowledge. This strategy has positively impacted the long-term financial attitudes and behavior of Salvadorans, leading to a significant drop in the country’s financial education gap.