“Rewarding from Nothing” Resource Construction through Financial Literacy


Mir Murtaza Jamali
Now a day, Resource construction (searching and managing) is a big problem in every developing country of the world. Individuals with different capabilities like creative thinking could be the best entrepreneurs but due to lack of knowledge of optimal resource construction, they are effortless, inefficient, and ineffective. Financial literacy is the big source of resource construction as when individuals will be equipped with the knowledge of financial environment, financial system, and financial skills they will be developed with from low quality of life to high quality of life. One day I was chatting with an old person aged above 50, he said to me that banks have ruined to our country. He totally mean that from whenever banks have emerged in Pakistan, the economy of Pakistan have
declined to crisis. I was looking on his face and said financial literacy is very crucial to economic development and prosperity of a country. As a quote “an investment in knowledge can pay better interest but an investment in financial knowledge can leads to highly rewarding opportunities”. Many people are creative thinker and they could be the best entrepreneur if they had their own resources. The purpose of this article is behind this line that one can search and manage the resources for different
opportunities available in the surrounding business and financial environment and for that proper financial literacy is a blessing to common people of the developing countries. Majority of population living in the developing countries are poor and middle class families. Their basic needs even not fulfilled in many societies of the world. Vicious cycle of poverty is circulating and causing poor is becoming poorer. In this calamity, resources like low or high but misused. Resource construction by poor or illiterate family is a big problem developing countries are facing now. Financial literacy is a big source to over the problem of resource construction as when individuals have knowledge of roles, importance and
activities of financial institutions and markets (banks, insurance companies, finance companies, investment banks, bond market, stock market, foreign exchange market) and its instruments they will find opportunities of big return in business or financial environment and will try their best efforts to manage resources from different sources available in every corner of the world now. Because a common people makes decision every day related to earning, consumption, saving and investment if he/she has
knowledge of his surrounding business and financial environment and its system he/she can find many opportunities and can improve his/her optimal decision making ability. This way a common people can prosper his/her living standard and improves quality of life even he/she doesn’t own single rupee. In developed countries of the world, nearly 95% of the population is aware about the trading, saving, and investment activities of the financial institutions and markets as compared to developing countries where merely 40% of the population is aware and takes part in searching and managing the resources

for many available opportunities (resource construction). Through financial literacy, resource construction opportunities (which are available but unknown to many common people or known but misused in any way) can be used effectively that ultimately leads to economic growth, economic development, improve quality of life, and expansion in capital stock (machinery, buildings etc) of the country.
Now a day, state bank of Pakistan (SBP) has taken part in financial literacy program on the national level but due lack of effectiveness in content managing (what should be told to a common people) the NFLP is not increasing the literacy rate in the country. Instead of telling them the regulatory mechanism of commercial, Islamic, microfinance, zarai , investment, and development banks and its links and co- ordination with state bank and state government together with financial services and products offered
by them and their cost and benefits of different group of banks (necessary for optimal decision making) because different banks pay different interest rates even with different compounding like quarterly, semi-annually and annually, they are telling the common people only financial services and products offered by commercial and microfinance banks without their cost and benefits and terms and conditions (incomplete knowledge).Conclusion and suggestionsFinancial literacy is a big source to overcome the
problem of resource construction and it can ultimately leads to economic growth, economic
development, economic prosperity, growth and effectiveness of financial institutions and markets, high quality of life, better investment opportunities, proper use of resources and sources, cost and benefit analysis of credit facilities offer by different banks and much more.I also give my suggestion to federal and provincial government of Pakistan to have a look on this problem that is a root of many problems and government must implement a proper financial literacy program on national level that meet international standards and design a content for program that is necessary to share with common
people so that they must have understanding of basic mechanism of business and financial environment and cost and benefit analysis of different banks together with financial services and products offered by them. A proper budget and check and balance system should be set on this program every year or particular time period. State bank should revise and redesign the contents of this program and should implement the program effectively on national level.