Final Exam, Is it Needed?

My daughter is now having final exam at school. My daughter is just almost seven and she is just in the first grade of Primary School. Why do they need to give her final test? In Europe, the final exam or test at school normally start when the student are around 12 years old. That's what my husband said. But here, they already give the exam too early in our opinion. I just tell my daughter that she should not worry about the test. As long as she will do her best, no matter what will be the result, we will be proud of her.