Financial literacy and inclusion: Results of OECD/INFE survey

Report
MEASURING FINANCIAL
LITERACY: RESULTS OF
OECD/INFE SURVEY
Empower Consumers of Financial Products and Services
through Improving Financial Literacy/Capability and
Effective Consumer Protection
G20 Russia, OECD, World Bank
13 - 14 June 2013, Moscow
CHIARA MONTICONE – OECD
with the support of the
Russia/World Bank/OECD Trust Fund
Results of the OECD/INFE survey
Monograph collecting results
on the 14 countries that
undertook the initial
OECD/INFE survey about:
• Financial literacy
• Analysis by gender and
other socio-demographics
• Financial inclusion
Financial knowledge
Simple division: most people can do it, basic maths is not
a problem
Simple interest + compounding: problematic for a
relatively large proportion of respondents across all
countries
– In Albania and Peru, fewer than 1 in 5 people were
able to apply their knowledge to this
– In every country except Norway, at least half of the
population failed to identify the impact of
compounding
Diversification is another key difficulty in many
countries
Financial knowledge
• Eight knowledge
69%
61%
57%
60%
58%
57%
53%
51%
49%
45% 46%
40% 41%
BVI
• In AL, AR, NO, PE, ZA
fewer than half of the
respondents achieved a
“high” score
United Kingdom
South Africa
Poland
Peru
Norway
Malaysia
Ireland
Hungary
Germany
Estonia
Czech Republic
Armenia
Albania
33%
questions – rescaled to 0100 – “high” knowledge
with at least 3/4 of correct
answers
Percentage of respondents who gave at least ¾ correct answers to the
financial knowledge questions
• No country had more
than 70% of their
population who could
answer at least 3/4 of the
questions
Financial behaviour
Shopping around for financial products is uncommon
(UK most likely at just 16%)
Setting long term goals and striving to achieve
them is also quite uncommon in some countries (e.g.
Albania 30%)
Borrowing to make ends meet is not widespread, but
still a problem for a large minority in certain countries.
– 47% of Armenians had resorted to borrowing the last
time their income fell short of their expenditure
– in Albania, Peru and South Africa over a quarter of
respondents had also done so
Financial behaviour
71%
67%
67%
positive behaviours
(rescaled to 0-100) relatively high score if
exhibit 2/3 of the
behaviours
59% 60%
57%
51%
48%
43% 43%
39% 41%
38%
BVI
United Kingdom
South Africa
Poland
Peru
Norway
Malaysia
Ireland
Hungary
Germany
Estonia
Czech Republic
Armenia
27%
Albania
• Overall we looked for 9
Percentage of respondents who exhibit at least 2/3 positive financial
behaviours
• At least 30% of
respondents in each
country exhibit fewer
than 6 of them
Financial attitudes
• Three attitudinal statements
– 54% of respondents in South Africa have attitudes
that tend towards the longer term compared with
just 10% in Armenia
– 64% of Peruvians and 61% of Albanians found
saving satisfying against only 8% in Armenia
and 19% in Poland
– About half of Albanians and Peruvians disagree
that money is there to be spent, but only 2%
of Armenians and 12% of Polish respondents
Results by socio-demographics
100
Male
• Women typically
Female
have lower levels of
knowledge. Average
overall scores in every
country are either lower
for women, or the same
for both genders
80
60
40
20
BVI *
UK *
South Africa *
Poland *
Peru *
Norway *
Malaysia *
Ireland *
Hungary
Germany *
Estonia *
Czech Republic *
Armenia *
Albania *
0
Average financial knowledge score by gender – Score based on 8
questions and rescaled on a 0-100 scale
• Higher income and
higher education are
associated with higher
overall scores, as is
middle age
Financial literacy and inclusion
Incorrect
• The survey allows to
97%
90%
90%
76%
95%
87%
83%
86%
76%
69%
51%
34%31%
31%
29%
25%
20%
20%
20%
14%
10%
8%
BVI
UK
South Africa
Poland
Peru
Norway
Malaysia
Ireland
Hungary
Germany
Estonia
Czech Republic
1% 1%
Armenia
• For instance, knowing
about interest
compounding is
associated to holding
savings or investments
97%
83%
Albania
study the correlation
between financial
literacy and financial
inclusion:
o product awareness
o product holding
o active choice
98%
92%
Correct
Percentage of respondents who hold a savings/investment product by
ability to answer the interest compounding question
Way forward: revised OECD/INFE
questionnaire
Initial OECD/INFE
survey instrument
Albania, Armenia,
British Virgin
Islands, Czech
Republic, Estonia,
Germany,
Hungary, Ireland,
Malaysia, Norway,
Peru, Poland,
South Africa,
United Kingdom
Revised survey
instrument
Part/all questions to the national
population: Iceland, Jamaica,
Lithuania, New Zealand, Puerto Rico,
Serbia, South Africa, South Korea,
Turkey
Part/all questions to subpopulations: Canada, India, United
States
THANK YOU!
Questions and feedback welcome
[email protected]
OECD INFE www.financial–education.org
Russia/World Bank/OECD Financial Literacy and Education Trust
Fund http://www.finlitedu.org/

similar documents