Sydney: Almost three-quarters of Asia’s adult population don’t have a clear grasp of key monetary ideas including inflation and risk diversification, according to a study conducted by Standard and Poor’s.
In China, 63% of adults with a credit card are financially illiterate and only 28% of Chinese respondents were identified as financially competent, it showed. Singapore had the highest percentage of people in the region with a good understanding of the key concepts, at 59%, while Cambodia and Nepal had the lowest at 18%.
“There are correlations between financial literacy, financial access, and the strength of markets,” Courtney Geduldig, executive vice president of public affairs at McGraw Hill Financial, parent of S&P Ratings, said in a statement Wednesday. “Addressing financial literacy is a key strategy in building stronger, more accessible and sustainable markets around the globe.”
Financial inclusion is a challenge and an opportunity in Asia, with about 47% of adults in India—or 415 million people—lacking a bank account, S&P said. While the array of financial products available in Asia is growing rapidly, citing China where credit card ownership has almost doubled since 2011, people still struggle with simple concepts like interest, it said.
The survey also showed:
- 61% of Chinese adults don’t save for old age.
- 6 out of 10 Chinese adults don’t have formal savings, and about 20% of the adult population is “unbanked”
- 73% of Indian men—and 80% of Indian women—are financially illiterate. Combined, only 24% of Indian adults are financially literate, the lowest score among the Brics (Brazil, Russia, India, China, South Africa) nations. Bloomberg