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The EBRD is boosting financial inclusion in Moldova with an innovative financial education project to develop personal finance skills and increase the confidence that remittance recipients have in opening bank accounts. Over the past year more than 20,000 people across the country have received training in how to better manage their finances. More than 3,000 of them opened accounts, which have attracted total deposits of more than US$ 7.5 million in nine months.

Four Moldovan banks have joined the initiative: Moldova-Agroindbank, Mobiasbancă – Groupe Société Générale, Banca Socială and FinComBank. Present at bank branches that handle large volumes of remittance transactions, specially-trained financial advisors invited customers for a free, personalised consultation to help them open a bank account and manage their finances.

“Many people in Moldova depend on money sent from abroad, but few keep their savings in a bank. Improving their knowledge about personal finance can enable them to make informed economic decisions  thus improving their lives and also benefiting the economy,” said Julia Otto, Head of the EBRD Office in Chisinau. “With their money in the bank, recipients of remittances can better manage their finances, while banks can increase their ability to finance the Moldovan economy.”

About one million Moldovans are believed to have left their country in search of a better life, and the economy relies on the money they send home. In 2012, total remittances were estimated at US$ 1,494 million - about 20 per cent of gross domestic product (GDP) and ten times more than foreign direct investment during that year.

However, the flow of savings to the financial sector remains low. Remittances are sent via money transfer systems and collected at local bank branches by family members who often do not have a bank account themselves. According to the World Bank’s Global Findex Database of 2012, only 18 per cent of people over the age of 15 in Moldova have an account with a financial institution and only four per cent of them keep their savings in a bank.

National Bank Governor Dorin Drăguțanu said: “The National Bank of Moldova is committed to promoting financial education and supports this major project designed to contribute to financial inclusion in Moldova. It is important that the members of our society, especially remittance recipients, get the much needed informational support.

“The financial education will have positive results in terms of safety and efficiency, and will also bring social benefits, both in the near future and in the long term. All of Moldovan society will benefit, as channelling remittances through banks in order to promote lending to legal entities will boost economic growth.”

The EBRD’s financial literacy project, implemented by the consultancy Developing Markets Associates Limited from October 2012 to September 2013, is part of a larger programme that the EBRD has carried out in several early transition countries, including Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Tajikistan, and most recently, Moldova to strengthen the financial inclusion of remittance recipients. The series of projects, which are funded by the Bank’s multi-donor ETC Fund, help to promote a culture of saving via the banking system and teach potential bank customers how to plan their budgets.