Immigrants have to live, work and raise their families in a country that is new to them; a country with another language, other customs, another way of life, and often a more sophisticated and complex financial system. Everyday, they face many obstacles, such as lack of necessary documents, lack of credit history, as well as specific objective difficulties such as understanding the language, stereotyped social perceptions, different laws, the risk of fraud and so on.
Immigrants are undoubtedly a very vulnerable social group. Therefore, their smooth integration requires a special emphasis on their financial education from the very first time they come to the host country, with a tailored approach.
One of the most vulnerable social groups in today’s global environment is immigrants. This category faces many challenges on a daily base, such as adapting to a new social environment with a different language, religion, customs, as well as a complex financial environment.
Therefore, immigrants should be able to manage their finances in their host country, understand the characteristics and risks of the various financial products and services (including savings and insurance products), as well as online payment services. They should also understand the risks and particularities of their loan and contracts and finally be able to know and understand their employment rights.
The aforementioned daily problems tend to persist and be transferred from older generations of immigrants to younger ones. The OECD PISA study shows that students with immigrant background have lower levels of financial literacy compared to national students.
Regardless of their access to financial products, refugees and immigrants must be able to effectively manage their financial situation, income and expenditure, directly and in the long run. Even if most transactions are in cash, it is useful to understand and know how to calculate exchange rates, the way to set up a budget, and how to use the various financial resources efficiently, keeping track of the money they send and receive, smoothing out the fluctuations in their cash inflows and outflows. They also need to be aware of the money transfer fees even when they send money through informal channels and how they are deducted from the final amount received by the recipient. Managing migration concerns a range of issues such as different currency and inflation level, different taxation rules and different labour rights and makes the financial education of the immigrants particularly important in the long-term.
Proper financial education of immigrants helps to alleviate poverty, increase their financial well-being, eliminate social inequalities and smoothly integrate them into society.
The most serious challenges that the immigrants face are:
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