KOTA BHARU: A national study by the Employees Provident Fund has identified Kelantan, Sabah, and Terengganu as having the country’s lowest financial literacy rates.
EPF East Region director Rahmat Ali stated that the 2022 research considered several factors including limited exposure to financial management and savings practices.
The study revealed that the financial literacy rate in Kelantan was just 15%, followed closely by Sabah at 16% and Terengganu at 17%.
These figures contrast sharply with Kuala Lumpur’s significantly higher financial literacy rate of 41%.
Rahmat Ali explained that residents in these states may have savings but often keep them in unproductive places.
“They may have their own savings, but the savings are kept in unproductive places, such as at home or in banks that do not provide high returns.”
He emphasised that improved financial literacy would help people choose better savings instruments.
“If their financial literacy were better, they would know how to choose savings instruments that provide higher returns, such as the EPF.”
The EPF is now focusing on raising awareness particularly among the self-employed who don’t make formal contributions through employer deductions.
Rahmat highlighted specific facilities designed to help this group build their retirement savings.
“Among the facilities offered are i-Saraan and i-Suri.”
The i-Saraan programme provides government incentives for those who save regularly through the scheme.
“Through i-Saraan, the government provides an incentive of RM500 every year for 10 years if contributors save RM2,500 annually.”
These contributions offer multiple benefits beyond just savings growth and government incentives.
“These contributions not only enable them to enjoy incentives and dividends, but also provide various other benefits such as withdrawals for housing purchases, education, and protection in cases of disability or death.”
Current participation numbers show 18,385 contributors registered under i-Saraan and 431 individuals under i-Suri.
Rahmat urged more people to take advantage of these programmes as a valuable future investment. – Bernama
