Financial literacy is an understanding of how money works and the ability to manage one's finances effectively. Although not a new concept, it's a thoroughly modern phrase and commonly used in the UAE.
Why? Because it seems we are a not a financially literate society.
This can be seen in our level of debt, which continues to rise. Despite the Central Bank introducing more stringent criteria for personal lending in 2011, banks are still permitted to approve loans of up to 20 times an individual's monthly income, with instalments not to exceed 50 per cent of monthly income.
The value of personal loans in the country increased by 3.8 per cent to Dh270.7 billion between January and May this year alone, according to the Central Bank. That total is on top of the Dh8.8 billion rise in personal borrowing reported during 2012.
What's more, a survey by The National Family Status Observatory in 2012 found that almost 60 per cent of Emirati families spent about a quarter of their monthly income repaying debts from credit cards and personal loans.
Those numbers are too high, says Keren Bobker, the financial adviser who writes The National's "On Your Side" column.
"A significant percentage of people have total monthly debt obligations that exceed their income," she says. "Inevitably this will lead to missing payments and the attendant consequences."
So why is the UAE so financially illiterate? "Several factors are to blame," Ms Bobker says. "These include having to deal with financial products in a second language; a lack of transparency in relation to many financial products; lack of assistance from banks, and too much hard selling when inappropriate."
Being in debt has become part of the culture, she says. "Too many people here seem to think that having large unsecured debt is normal and end up paying large amounts of interest without really considering the true cost of spending and indeed whether the debt is necessary."
Having fewer consumer safeguards than in other developed nations, as well as no regulatory body that people can turn to with complaints, doesn't help, she adds.
It is no wonder then that financial literacy has become a major talking point in the Emirates. And with part of the country's economic-development plan being to create a financially literate society that will support a sustainable, diverse economy by 2030, a number of financial institutions have introduced programmes to tackle the problem.
Banks, organisations such as the Emirates Foundation and the Abu Dhabi Council for Economic Development, and private companies are among those to step forward.
The Emirates Foundation, an independent philanthropic organisation set up by the Government of Abu Dhabi to facilitate public-private funded initiatives to improve the welfare of people across the country, is working with financial experts, banks and the private sector to encourage people to better manage their finances.
Through a financial literacy campaign called Isrif Sah (Spend Right, in English) it hopes to build a cadre of 100 Emiratis who will be trained to become experts in personal finance and then help others. At a later stage, the foundation plans to tour the country, reaching out to students in schools and universities and consumers in the malls to help spread the message.
Sheikh Sultan bin Tahnoon Al Nahyan, managing director of the Emirates Foundation for Youth Development, says: "Financial literacy has emerged as an increasingly important issue notably in light of the global recession, where managing debt effectively emerged as a very salient subject. We want to be able to help young people in the UAE learn how to avoid excessive debt and manage their finances such that they can provide for themselves and their loved ones throughout their lifetime."
Banks, too, are playing their part. Last year, Emirates NBD launched a social media campaign called Pay Yourself First. It encourages people to save by making minor lifestyle changes that result in significant savings over time.
Another company working to educate its customers in managing their money is the credit card company Visa, which for the past 10 years has run financial literacy programmes in more than 30 countries.
Naamat Baradhy, a spokesman for Visa Middle East and North Africa, says the company aims to teach people how to spend, save and budget responsibly.
Each of Visa's financial literacy programmes is tailored to suit its country and takes into account the local economy, level of debt, spending habits, education levels and culture.
In the Middle East, Visa has set up the My Money Skills website at ehsib.com. Available in Arabic and English, it offers advice on budgeting, saving, bank account management, how to use debit and credit cards wisely, shopping online and guarding against fraud. It also has a section for students.
The company plans to launch a new version of its Fifa World Cup-themed financial literacy video game in the region. The Financial Football video, available in English, Arabic and French, is aimed at children and adults, educating them about budgeting, saving, responsible spending and the wise use of credit cards, in a fun way.
Mr Baradhy says there are two reasons for these initiatives: they benefit society and they increase awareness of financial products and therefore create more business for the company in the long run.
"Financial inclusion moves people from being untapped and isolated members of our economic system to thriving and contributing participants," he says.
"Through access to financial products and services and the tools and knowledge to manage their finances, people have the opportunity to become more entrepreneurial - to create economic opportunities for themselves, their families and their communities."
Another company working to improve personal finances is National Bonds, a UAE-based Sharia-compliant investment scheme.
Saif Ali Al Shehhi, the executive director of human resources and administrative affairs, says the corporation runs financial literacy programmes for bondholders and staff.
"If employees are free from debt and managing their finances well, it means they're generally more content and this leads to their being more productive in the workplace," he says. "It therefore benefits the company to hold financial seminars which explain how to manage budgets and provide tools to do this."
Employees at National Bonds can take advantage of one-to-one counselling about personal financial issues. Mr Al Shehhi says people are often embarrassed to come forward at first but once they do, they reap the benefits.
"This advice is open to all our employees free of charge. It is our pleasure to be in a position to help them become financially literate," he says.
