The financial Literacy level is at a very low level but the latest survey shows India’s Financial Literacy Level is much better than others. This survey from ING shows that India Ranks at no. 2 out of 10 leading nations.
But my question is what your target is:
- Being just better than others? If yes then enjoy you are already in the top 10% of Indians. (As 90% don’t even know what is Financial Literacy)
- Achieve your goals & be financially free? If yes then learn – still there is a long way to go.
Some time back financial portal Myiris interviewed me. When the interviewer asked, “Is there anything else you would like to share with our readers?” I was not able to stop myself to share the poor financial literacy state of our country.
I said “Financial Literacy is the key to Financial Freedom. We wish to say that Financial Literacy is very important as we miss this in our education system. We dream for a day when an investor will be financial educated before he reaches his financial advisor. Being financially aware means the client will understand his questions and will definitely understand the solutions. It is really painful to see when a client is mis-sold for penny benefits. And best way to avoid mis-selling is to get armored with Financial Literacy.”
Few Important Facts from Financial Literacy Survey:
- Indians turn out to be the second out of 10 leading nations in the world to have a basic financial literacy level(55%), just behind Japan.
- The survey was carried out among 5,000 consumers across ten major nations, including India, the USA, Mexico, The Netherlands, Romania, Poland, Belgium, Spain, Korea, and Japan.
- The survey shows that a whopping 84% of Indians prefer buying life insurance products as compared to 54% globally.
- 87% of Indian households have an emergency fund compared to 33% globally.
- Indians borrow money only in case they have to buy a house (50 percent) or a car (43 percent).
- Indians do tend to get lost in sourcing good advice to become better at money.
- The more people are financially literate, the more they experience feelings of happiness,
- Overall, the survey revealed that Asians are by far the most financially literate and also eager to learn more. They actively follow their budgets and develop habits of acquiring knowledge before taking financial decisions.
- 89% of respondents — from 10 different countries — want to do a better job managing their money; 94% of Americans want to do a better job.
Extracts from Financial Literacy survey.
87% of Indians had an emergency corpus of more than two months. Nothing new for us is that most Indians have a “CASH FANCY” and they keep the cash in saving accounts, suitcases, almirahs, goolaks, and even in pillow covers.
Globally, the problem is only 27% of people admit that they do not know where to start. Others keep on postponing, do not find it interesting, do not have time or badly need help.
I would like to share a quote from Alvin Toffler “The illiterates of the 21st century will not be those who cannot read and write but those who cannot LEARN, UNLEARN and RELEARN”. Similarly, Financial Literate will not be those who know how to save but those who can achieve their financial goals & achieve financial freedom.
Do you agree with the findings of this survey?? Do you feel you still have to learn?
Hi,
Thanks for sharing this useful information. Although the survey is good but i do not think i am still not fully financially literate.
Hi Sunil,
Learning is a life long process – it’s good that you know that there are gaps.
Good survey.
Financial Literacy is the need of hour.
But this is being interepreted differently.We might be ahead in learning, but that starts only when some problem arises.
However, Indians generally do investments for their financial goals.Be it Child Plan,Retirement or any other.The only problem is that its not quantified according to future requirement.
Take LIC.Maximum population will be holding it in some form or other.And the objective might be there but without any awareness of our exact requirement.
So this survey holds true in my view
Hi Jitendra,
Read this point
“The survey shows that a whopping 84% of Indians prefer buying life insurance products as compared to 54% globally.”
Definitely they would have counted it as a positive factor but we all know what’s the truth.
I am surprised at the findings of the survey.My feeling is that even educated Indians have very low level of financial literacy.Even I have been mostly relying on my bank relationship manager for my investments.Only recently I have started making investment decisions independently.
That’s the reason I wrote this article.
Hi Hemant
I agree with your following statement :
Financial Literacy is the key to Financial Freedom. We wish to say that Financial Literacy is very important as we miss this in our education system. If you ask a person who has just come out of the school and is about to join college to go and open a savings account in a bank, I am sure he will not be able to do that independently.If you ask him what is KYC,you will see a blank look on his face.He will not be able to fill the deposit slip.He will not be able to write a cheque correctly.This proves that even in young people the level of financial literacy is very low.Our education system is to be squarely blamed for this.
sir please send full version of this article to my email account
survey is good.
sir but my question is,
what about financial literacy of informal workers who are working in unorganised sectors and having income on daily basis?
Sir I totally agree with Mr.Purvi, as I did some survey on FI, in rural areas reg the impact of no frill accounts and services of BCs. Many open accounts out of blind faith in the BC of that village rather than the awareness of the benefits of opening of an account.
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