Thursday, May 17, 2012

OECD Survey: BVI First by Financial Behaviour

The findings of international financial literacy survey, which was undertaken in 14 countries around the world by the Organisation for Economic Cooperation and Development (OECD) International Network on Financial Education (INFE), were recently published in the OECD paper. According to these findings, the British Virgin Islands jurisdiction has the highest score in positive financial behaviour when compared to other countries.

The survey measuring financial literacy analyses the differences in financial knowledge, behaviour and attitude across countries and within countries, mainly by socio-demographic characteristics. The authors of the survey consider that the survey “provides the first ever rich and detailed insight into the financial literacy of diverse populations,” and say the findings also highlight reasons for concern.

The BVI shows average results in the financial knowledge section, but scores highest in the section of financial behaviour – followed by Malaysia and Germany. Financial behaviours noticeably vary across countries. BVI, Malaysia and Germany are active savers, while Hungary, Estonia and Armenia are less active in saving. The BVI, Peru and Armenia are more likely to set long term financial goals, while in Germany, UK and Ireland people choose active financial products.

In the financial attitude section, BVI follows Albania, Peru, Hungary and Norway, with their most positive attitude towards planning for the future.

Analysing financial literacy in relation to demographic factor, the authors of the survey expressed their concern about the gender gaps. In the BVI, 78% of men and only 66% of women gained high score for financial behaviour. There are also differences by age, education and income.

The 14 countries for the international pilot study were the British Virgin Islands, Albania, Armenia, Estonia, Germany, Hungary, Ireland, Malaysia, Norway, Peru, Poland, South Africa, and the United Kingdom. Among them, the BVI and Germany are the top countries with high levels of financial literacy. In 12 countries, the original survey was completed in 2010, and BVI and Albania completed the survey in 2011.

By the definition of the OECD, financial literacy as “a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual wellbeing.”

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