Letters | Hong Kong’s poverty alleviation campaign should include financial education

Readers discuss improving financial literacy among the disadvantaged groups in Hong Kong, and call for a more sympathetic attitude to the city’s homeless

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An elderly woman collects cardboard in Sham Shui Po on November 15. Photo: Sam Tsang

Published: 7:30am, 18 Nov 2021

According to the latest Poverty Situation Report, released by the government last week, the city’s poverty rate reached the highest level since record-keeping began 12 years ago. The poverty rate for 2020 was 23.6 per cent before government interventions – such as Comprehensive Social Security Assistance and cash payouts – and 7.9 per cent after these interventions were taken into account.

Government poverty alleviation measures can meet the immediate needs of the poor and help the government achieve certain goals. However, in addition to the direct distribution of money, poverty alleviation should also enhance disadvantaged people’s ability to help themselves – that is, it should enable them to give full play to their ability to lift themselves out of poverty.

Improving financial literacy, rational money management, financial planning and making full use of financial skills are all ways to help alleviate poverty.

In 2020, the Hong Kong government’s recurrent and non-recurrent cash expenditure on poverty alleviation was HK$169.1 billion (US$21.7 billion). Apart from meeting basic expenses, households also need to manage and use money reasonably. Improving this group’s financial literacy requires targeted education.

Many people misunderstand personal financial management as simply making investments. Financial planning also includes daily money management, retirement protection and resource management, including planning credit, reasonable consumption, savings and other skills. This is the kind of financial literacy that poor people need.

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Even so, the financial education needs of the poor are often neglected, with most financial education programmes in Hong Kong focusing on investment. As a result, many people from low-income groups come to believe financial education has nothing to do with them.