Indians are among the least financially literate people across the globe with youngsters and women struggling most with their knowledge of finance due to lack of discussions within the families on money management issues, says a report by credit card firm Visa.
As per the ‘Global Financial literacy barometer’, India ranked 23rd among the 28 countries surveyed, with 35 per cent of its population termed financially literate.
Brazil topped the ranking with 50.4 per cent of its population as financially literate followed by Mexico (47.8 per cent), Australia (46.3 per cent), the US (44.6 per cent) and Canada (43.8 per cent).
The study, conducted among over 25,000 people in 28 countries, expressed concern that Indian families do not frequently talk to their children about money management issues discussing finances with their children only 10 days a year compared with the global average of 19 days a year.
“Despite this, Indians felt confident that teenagers and young adults are adequately prepared to manage their own finances,” the survey said.
However, the reality reflects the contrary as 41 per cent of the younger respondents aged between 18-24 were more likely to have no emergency savings at all compared to the older respondents.
Moreover, the survey found that the average savings set aside by Indians for an emergency is 1.9 months – close to the survey average of 2 months.
While, China was leading in the barometer with 3.9 months of savings for an emergency, followed by Taiwan with 3.7 months, Hong Kong with 3.5 months and Japan with 3.3 months.
The barometer observed that Indian women may not be taking steps to protects themselves with 34 per cent of the respondents having no savings at all, in comparison to 29 per cent of the male respondents.
“The Barometer clearly demonstrates that more needs to be done in advancing financial education in India especially among women and young people,” Visa Group Country Manager (India and South Asia) Uttam Nayak said.
When asked why families did not talk about financial issues, 43 per cent women said they do not understand personal money management issues. Similarly, 20 per cent males did not comprehend personal finances.
In the bottom five financially literate countries – Morocco (34.4 per cent), South Africa(34 per cent), Vietnam (31.8 per cent), Indonesia (27.7 per cent) and Pakistan (27.3 per cent).
In the Asia Pacific region, Australia, New Zealand, Japan, Thailand and Malaysia formed the top five markets which were financially literate.