A first of its kind assessment
of financial literacy conducted among women in the Asia-Pacific
region has turned up some surprising results. Not least of these is
that women in many markets with long histories of financial
sophistication are often found seriously lacking when it comes to
financial savvy .
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Intuitively it
would seem that in the Asia-Pacific region women with the highest
level of financial savvy would be found in developed countries such
as Japan, Australia or Singapore.
But in reality this is not the
case, as global payment card company MasterCard Worldwide’s
inaugural Index of Financial Literacy among women in the
Asia-Pacific region reveals.
The most financially savvy women
were, in fact, found by MasterCard to be in Thailand. Thai women
achieved an overall index score of 73.9 out of a possible 100.
MasterCard’s overall index is made
up of three components:
- Basic money management
weighted at 50%. This is to determine the level of basic money
management skills in terms of budgeting, savings, and
responsibility of credit usage; - Financial planning weighted
30%. This is to assess the level of knowledge of financial
products, services, and concepts and the ability to plan for
long-term financial needs; and - Investment weighted 20%.
This to determine basic understanding of the various risks
associated with investment, different investment products and
skills required.
Notably, Thai women also had the
highest scores in financial planning (87) and investments (69.3),
outshining their peers in the other 12 Asia-Pacific markets
surveyed by MasterCard.
Of the three components that make
up MasterCard’s survey, women across the 13 Asia-Pacific countries
as a whole scored the best in financial planning (average score
74.6), followed by basic money management (63.9) and investment
(56.7). The overall average score across the 13 markets was
66.3.
Vietnamese women rank
high
Also of significance was that women
in another early-development stage market, Vietnam, also performed
well to take sixth place with an overall index score of 70.1.
Georgette Tan, vice-president,
communications for MasterCard, Asia-Pacific, Middle East and
Africa, said: “There is something to be said for the strong
performance of Thai and Vietnamese women in the rankings.
“These are markets where rapid
socio-economic advancement has given women vital and valuable
first-hand entrepreneurial experience and exposure to financial
planning and money management concepts.”
Women in three other developing
markets surveyed were also in the MasterCard’s index’s top-10: The
Philippines (overall score 68.2), Indonesia (66.5) and Malaysia
(66).
Bringing up the rear in the survey
were women in the developed markets of Korea, with the lowest
overall index score of 55.9, and in Japan with the third-lowest
overall index score of 59.9. Women in Korea and Japan were also the
only ones in the region with financial literacy index scores of
below 60.
Specifically, Korean women had the
lowest financial literacy score of 55.9 and also ranked the lowest
in basic money management (51.1) and financial planning (65.7).
Japanese women had the lowest investment score (38.4).
Analysing its finding in Korea,
MasterCard noted that only 40% of Korean women said they understood
the concept of compound interest rates; 36% did not understand the
concept; and the remaining 24% were not sure or did not know.
Adding further concern, MasterCard
observed that when it came to investments, only 22% of Korean women
had a basic understanding of inflation and its impact on the future
value of money.
Also of concern, emphasised
MasterCard, was that the majority of Korean women polled were the
household financial decision makers.
In other major developed markets,
women in New Zealand had the second highest overall index score
(73.8) followed in fourth position (71.6) by Australian women. New
Zealand and Australian women led the field in basic money
management with scores of 76.7 and 75.8 respectively.
But New Zealand and Australian
women fared poorly on financial planning – coming in under the
overall survey average – and on investments with scores of 58.3 and
55.2, respectively.
Women in Singapore were in third
overall place with a score of 72.4. This was thanks to good scores
on basic money management (70) and financial planning (80.4). But
they fell short in terms of investment skills and knowledge,
scoring of 51.5, well below the regional average.
In the most populous developing
markets, India and China, women had overall index scores of 62.5
and 60.1, respectively. This ranked Indian women fourth lowest and
Chinese women second lowest. MasterCard found that Indian and
Chinese women are particularly weak in basic money management,
scoring 58.8 and 54.4, respectively.
As an overall observation,
MasterCard noted that the more financially savvy women in the
Asia-Pacific region are generally to be found in the over-30,
married, working group.
“There is a close correlation between financial knowledge and
planning; women who exhibited higher levels of financial literacy
were more likely to be proactive in planning for their future,”
stressed MasterCard.
