Sri Lanka has shown a high literacy rate of about 92% compared to other south Asian countries, and is on par with other developed countries. However, there is a noted dearth of surveys and studies that assesses the financial literacy level in the Sri Lankan context. It is observed that people with low levels of financial literacy suffer from that lack of knowledge at every stage of their lives and studies also assert that people with a high degree of financial literacy are more likely to plan for retirement, and that people who plan for retirement have more than doubled the wealth of people who don’t. On the other hand, the quite alarming fact noted is that even some educated professionals had fallen prey to financial scams in Sri Lanka, questioning the financial literacy of such intellectuals.
Thus, a study was carried out involving the undergraduates in the Sri Lankan state universities (due to being one of the major sources of future leaders) to find the level of financial literacy and how different specializations impact financial literacy levels. In the research conducted by the authors, the undergraduates were tested on their fundamental financial knowledge on dimensions of general finance, saving & borrowings (i.e., banking products), insurance and investment, and nearly 653 students from the five main state universities in ten main disciplines (business and non-business disciplines) were selected, where the data was collected over a period of 1 1/2 years. Undergraduates of the business discipline included undergraduates from accountancy and business management and non-business discipline included undergraduates from the fields of engineering, physical sciences, humanities and social sciences and information technology.
The findings indicate that the overall financial literacy level was on average 69.58% out of 100% of undergraduates in the business discipline. In terms of the sub-dimensions of financial literacy, these undergraduates scored the highest of 74.51% in the savings and borrowing sub-category, while they scored the lowest of 59.08% in the investment sub-dimension. When compared with the general literacy rate of 92% of this country, the findings of this study indicate that their overall average is quite low as well as knowledge in the investment sub-dimension is even lower.
The alarming finding is related to the undergraduates coming from the non-business majors, where the average financial literacy level was only 42.83% out of 100%, which is even lower than 50%. This we see as a major concern. Their knowledge in the investment related sub-dimension was just 28.16% out of 100%.
When considering these findings of the research conducted by the authors, it is clear that the undergraduates coming from the business management discipline had a better knowledge than students from non-business management disciplines. Although the students coming from the non-business disciplines may be conversant in their own areas of study, they were lacking an awareness in fundamental financial aspects that any citizen should possess to continue normal day-to-day life.
The authors observe that there is a systematic deficiency of personal finance education in our local education system. Introduction of subjects related to financial literacy for all students (regardless their discipline) in their formative stages as well as introducing course components related to accounting and finance in the curricula of non-business majors at universities (and other tertiary institutions) could be suggested to remedy this dire situation.
Authors– S.S. Edirisinghe (firstname.lastname@example.org) and S.S. Samarakkody,
Department of Accounting, Sri Lanka Institute of Advanced Technological Education, Sri Lanka,
Senior Prof. DBPH Dissa Bandara and Dr. AR Ajward,. Senior Lecturer
Department of Accounting, University of Sri Jayewardenepura, Sri Lanka
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Unlimited music streaming platform in Sri Lanka
SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
Sri Lanka using ‘sovereign power’ over economy: CB Governor
by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
CSE on the rebound; indices close positive
By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.