By K.C. Soares, ContributorOVER THE past years, much has been said about the "poor" performance of our students in the CXC mathematics examination. Government and schools lament and parents cry, as they try to offer all sorts of reasons for the inability of our students to perform at a more than satisfactory level.
But, at the same time, mathematics educators continue to operate in the same old way. That is, advocating and teaching the subject as an isolated and abstract discipline disconnected from our daily lives. Our teachers render the teaching of mathematics outside of our cultural context and so we end up teaching our people a critical area of social life in a way that creates a fear of learning.
However, despite our weaknesses as policymakers and educators, it must be known that mathematics governs almost every aspect of our lives even those aspects that seem to be far removed from the subject, for example, designing a network of farm roads.
While this is not a discussion of mathematics, what we are trying to do, here, is to indicate the importance of the subject in building a viable small business sector. That is to say, mathematics will assist small business people in planning, budgeting, calculating interest, appreciation and depreciation of assets, computing salaries and so on.
A FEAR OF FIGURES
A fear of figures is instilled at an early age in people and so anything to do with figures and calculations is pushed aside. As such, when a business venture is to be financed, for example, by way of bank loans, most people do not understand or even try to understand the calculations and implications of the figures presented to them. This often results in bad financing decisions being reached.
Financial statements, cost reporting and other financial reports are barely used or not used at all as these represent a set of figures and calculations that are to be analysed. Again, the fear of mathematics rises to the fore.
CRITICAL TO BUSINESS
Some of the ways in which mathematics is critical to small business people is in the calculations of interest charges on loans and overdrafts and on the interest accruing on deposits (fixed deposits, savings deposits, etc.). Financial institutions tend to give the impression that interest charges on loans are low by quoting weekly interest costs or by quoting an add-on interest rate.
For instance, in micro-credit financing, interest rates quoted are usually at two per cent per week. This appears to be low but when calculated on a per annum basis the rates are extremely high. Here a two per cent interest rate per week is more than 100 per cent per annum. These are extremely high rates, but on the surface, to the average micro-borrower, does not appear so.
Then again, many financial institutions quote interest rates on an add-on basis to give the impression that rates are low. An easy way to calculate the effective interest when an add-on basis is quoted is to multiply the add-on rate quoted by two and subtract one if the loan is for a duration of three years.
So, for example, if the add-on rate quoted is 19 per cent, then two times 19 is 38 and if you subtract one that gives you 37. The real interest being charged from this example is 37 per cent. On hearing 19 per cent add-on, the unsuspecting customer clearly believes that he/she will be making small monthly payments when it is time for the loan to be repaid. This is not so and problems usually arise when the reality of the situation hits the borrower.
Having said all of this, it is imperative that we attempt to give as wide a base as possible of our population the necessary mathematical skills needed to function in this period of technological advancement. Failure to do will result in our small businessmen and women being mesmerised with figures by financial institutions, whose sole interest is profit making. In fact, some of the agents of these financial institutions are themselves in need of basic mathematical training and this compounds the problem. While our businessmen and women might have workable ideas, it takes more to convert ideas into profits.
I think we need to laud the efforts of the UWI School of Continuing Studies (UWISCS), which is taking a new approach to teaching mathematics in the Caribbean region. It is an approach which combines culture, mathematics and our everyday lives, thus making the discipline alive and relevant. In this respect, it provides an avenue for the development of mathematical skills in all learners, particularly adult learners. If we, as a people, are serious about development, then I hope the Ministry of Education will follow the lead of the UWISCS.
K. C. Soares is a former banker and is now a business consultant with Soledad Financial Services Limited.
E-mail: soledad@netcomm-jm.com
