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

India's GDP down by 50%, not 23%, job loss 200 million not 122 million: Top economist

By Our Representative  One of India’s topmost economists has estimated that India’s Gross Domestic Product (GDP) decline was around 50%, and not 23%, as claimed by the Government of India’s top data body, National Statistical Organization (NSO). Prof Arun Kumar, who is Malcolm S Adiseshiah chair professor, Institute of Social Sciences, New Delhi, said this was delivering a web policy speech, organised by the Impact and Policy Research Institute (IMPRI), New Delhi.

Youngest of 16 activists jailed for sedition, Mahesh Raut 'fought' mining on tribal land

By Surabhi Agarwal, Sandeep Pandey* A compassionate human being, always popular among his friends and colleagues because of his friendly nature and human sensitivity, 33-year-old Mahesh Raut, champion of the democratic rights of the marginalised Adivasi people of Gadchiroli, Maharashtra, has been in prison for over two years now.

#StandWithStan: It's about Constitution, democracy and freedom of expression

By Fr Cedric Prakash SJ*  It is more than three weeks now: On the night of October 8, 2020, the 83-year-old Jesuit Fr Stan Swamy was taken into custody by the National Intelligence Agency (NIA) from his residence in Ranchi to an undisclosed destination. According to his colleagues, the NIA did not serve a warrant on Fr. Stan and that their behaviour was absolutely arrogant and rude.

Stan Swamy vs Arnab Goswami: Are activists fighting a losing battle? Whither justice?

By Fr Sunil Macwan SJ* It is time one raised pertinent questions over the courts denying bail to Fr Stan Swamy, who was arrested under the Unlawful Activities (Prevention) Act (UAPA), and granting it to Arnab Goswami, editor-in-chief of the Republic TV, arrested under the charge of abetting suicide of Avay Naik, who ended his life in 2018. It is travesty of justice that a human rights activist is not only denied bail but is also made to wait for weeks to hear a response to his legitimate request for a straw to drink water, while Arnab Goswami walks free.

India performs 'poorly' in Quality of Life Index, ranks 62nd out of 64 countries

Counterview Desk “Expat Insider”, which claims to be one of the world’s most extensive surveys about living and working abroad, in a survey of 20,259 participants from around the globe, has found that of the 64 destinations around the globe, has found that while Taiwan is the best destination for persons living outside their native country, closely by Vietnam and Portugal, India ranks 59th.

Human development index: India performs worse than G-20 developing countries

By Rajiv Shah A new book, “Sustainable Development in India: A Comparison with the G-20”, authored by Dr Keshab Chandra Mandal, has regretted that though India’s GDP has doubled over the last one decade, its human development indicators are worse than not just developed countries of the Group of 20 countries but also developing countries who its members.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Namaz in Mathura temple: Haridwar, Ayodhya monks seek Faisal Khan's release

By Our Representative As many as 23 members of the Hindu Voices for Peace (HVP), including the founder president of the well-known Haridwar-based Matri Sadan Ashram, Swami Shivananda Saraswati, and a one of its top monks, Brahmachari Aatmabodhanand, have expressed their “dismay” over the arrest of Khudai Khidmatdar chief Faisal Khan and three others on charges of “promoting enmity between religions” and “defiling a place of worship” after they offered namaz in Mathura’s Nand Baba temple premises on October 29.

Government of India 'refuses' to admit: 52% of bird species show declining trend

Finn's Weaver  By Our Representative The Government of India has been pushing out “misleading” data on the country’s drastic wildlife decline, says a well-researched report, pointing towards how top ministers are hiding data on biodiversity losses, even as obfuscating its own data. It quotes “State of India’s Birds Report 2020” to note that of the 261 out of 867 bird species for which long-term trends could be determined, 52% have declined since the year 2000, with 22% declining strongly.

Dalit, Adivasi protest in Jharkhand against 'illegal' transfer of land for development

By Rishit Neogi Displacement and eviction are not new terms. It is surprising that they are still continuing and have become a tool in the hands of state backed corporates to forcibly occupy lands in the name of development.