Skip to main content

India's financial literacy worse than Sri Lanka, Myanmar, Pakistan, BRICS nations: Top rating agency S&P

By Our Representative
A new survey released by well-known rating agency Standard & Poor (S&P) has found that just 24 per cent of the adult Indians are financially literate, which is worse than not just the “competing” BRICS economies but two of its important neighbours Pakistan and Sri Lanka. Pakistan’s 26 per cent and Sri Lanka’s 35 per cent adults are financially literate, it says. Bangladesh's financial literacy rate is 19 per cent.
What makes the survey particularly significant that two the three authors of the report based on it, titled “Financial Literacy Around the World”, are with the World Bank – Leora Klapper and Peter van Oudheusden, both belonging to the World Bank Development Research Group. The third author, Annamaria Lusardi, is with the prestigious George Washington University School of Business.
As for the BRICS countries, the report says, “In the major emerging economies—the so-called BRICS (Brazil, the Russian Federation, India, China, and South Africa)—on average, 28 percent of adults are financially literate. Disparities exist among these countries, too, with rates ranging from 24 percent in India to 42 percent in South Africa.”
Contrasting this with the developed world, the report says, “On average, 55 percent of adults in the major advanced economies–Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States–are financially literate, though adding, “But even across these countries, financial literacy rates range widely, from 37 percent in Italy to 68 percent in Canada.”
The report finds that “Denmark, Germany, the Netherlands, and Sweden have the highest literacy rates in the European Union: at least 65 percent of their adults are financially literate”, though adding, “Rates are much lower in southern Europe. For example, in Greece and Spain, literacy rates are 45 percent and 49 percent, respectively.”
The report does not think that incomes explain worldwide differences in financial literacy. It says, while it true that “in richer countries, proxied by GDP per capita, financial literacy rates tend to be higher”, however, it underlines, “The relationship only holds when looking at the richest 50 per cent of economies. In these economies, around 38 percent of the variation in financial literacy rates can be explained by differences in income across countries.”
As for the poorer half of economies, the report says, “With a GDP per capita of $12,000 or less, there is no evidence that income is associated with financial literacy. What this likely means is that national-level policies, such as those related to education and consumer protection, shape financial literacy in these economies more than any other factor.”
The report finds that “financial literacy rates differ in important ways when it comes to characteristics such as gender, education level, income, and age”, saying, “Worldwide, 35 percent of men are financially literate, compared with 30 percent of women. While women are less likely to provide correct answers to the financial literacy questions, they are also more likely to indicate that they ‘don’t know’ the answer, a finding consistently observed in other studies as well.”
Pointing out that this gender gap is found in “both advanced economies and emerging economies”, the report says, “Women have weaker financial skills than men even considering variations in age, country, education, and income. The average gender gap in financial literacy in emerging economies is 5 percentage points, not different from the worldwide gap, though it is absent in China and South Africa.”
“There is also a gap in financial literacy when looking at relative income in the BRICS economies. Thirty-one per cent of the rich in these economies are financially literate, compared to only 23 percent of the poor”, the report states.

Comments

TRENDING

Young environmentalist's arrest 'sinister', even parents not told of her whereabouts

By Our Representative  The Coalition for Environmental Justice in India (CEJI), a civil society network, has said that it is “highly disturbing” that Disha Ravi, a young woman climate activist from Bengaluru was “picked up” in what is referred to as a “closely guarded operation” of the Delhi police. Disha, 21, has been remanded to police custody for five days after she was taken from Bengaluru to Delhi.

Mukesh Ambani's earnings during Covid 'can lift' 40% informal workers out of poverty

By Dr Gian Singh*  The Inequality Virus Report released by Oxfam, a non-profit organization, on January 25, 2021 on the growing inequalities in different parts of the world, sheds light on the growing economic, educational, healthcare and gender inequalities in India. The report has revealed that the wealth of billionaires has increased by 35 per cent during the lockdown period in the country.

US forensic revelation enough evidence to release Sudha Bharadwaj, others: Civicus

Counterview Desk  Civicus, a Johannesburg-based global alliance of civil society organisations and activists claiming to have presence in 175 countries with 9,000 members and working for strengthening citizen action, has sought immediate release of Sudha Bharadwaj, arrested in 2018 under the anti-terror Unlawful Activities Prevention Act (UAPA) and accused of having links with the banned Communist Party of India (Maoist).

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Golwalkar's views on tricolour, martyrs, minorities, caste as per RSS archives

By Shamsul Islam*  First time in the history of independent India, the in-charge minister of the Cultural Ministry in the current Modi government, Prahlad Singh Patel, has glorified MS Golwalkar, second supremo of the RSS and the most prominent ideologue of the RSS till date, on his birth anniversary, February 19. In a tweet he wrote : “Remembering a great thinker, scholar, and remarkable leader #MSGolwalkar on his birth anniversary. His thoughts will remain a source of inspiration & continue to guide generations.”

Evolution of Sardar Patel's understanding of those 'involved' in Gandhi's assassination

By Shamsul Islam*  As the world mourns the 73rd anniversary of MK Gandhi's assassination by Hindutva terrorists on January 30, 1948, RSS, the most prominent flag-bearer of Hindutva politics, whose cadres rule India today, is found reacting angrily to the reality – that the criminals who assassinated Gandhiji were not only part of the ideological world-view of Hindu Mahasabha (led by VD Savarkar) and RSS brand of Hindu nationalism but were also connected with these. 

No Election Commission safeguard against electromagnetic hacking of EVM: Study

Counterview Desk  Releasing a new study simultaneously in Chennai and Kolkata in view of the forthcoming elections in Tamil Nadu and West Bengal, the Citizens’ Commission on Elections (CCE) – a civil society initiative – has regretted “lack of integrity of EVM voting”, pointing out, the Election Commission of India (ECI) does not appear to safeguard against the possibilities of ‘side-channel attacks’, i.e, hacking electronic devices through electromagnetic and other methods.

20% of FIRs against journalists in 2020 alone, targeted attacks in 2021 'too many to count'

Counterview Desk  Condemning what it calls “alarming rise in state repression and clampdown on news outlets and journalists” that “expose” the anti-people nature of the establishment, India's top civil society network, National Alliance of People’s Movements (NAPM) has demanded “immediate release of arrested journalists, withdrawal of arbitrary charges and protection of media persons facing threats.”

'Viability' of agricultural cooperatives vs govt proposed pro-corporate economic model

Dr Gian Singh* The farmer struggle started from Punjab against the promulgation of three agricultural ordinances by the Union government in June 2020 and the enactment of three bills by Parliament in September 2020 to replace these ordinances is unique in many respects. There is no other example of such a peaceful and democratic farmer struggle.

Whither right to food? Social security scheme allocation for woman, child 'reduced'

Counterview Desk Pointing out that women and children have been ignored in the Union Budget 2021-22, the advocacy group Right to Food Campaign (RtFC) has said that the Government of India should have taken into account the fact that even after the lockdown was lifted, distress among marginalized communities continues, with people having lower incomes and reduced food consumption.