An extensive recent survey of 10 countries – Consumer Resourcefulness Study – by ING Group has showed that Indians have a very sound financial literacy level of 55% which was only second to Japan. Most of the Indians seem to have managed their entire household budgets in a better manner as compared to their counterparts in countries like USA, Mexico, Netherlands, Romania, Belgium etc.
So what was the aim of the survey?
The main aim was to find out the way the financial literacy of a person affects his attitudes and behaviour on buying or financial products or simply making financial decisions.
What was the sample size and the countries in which the research was done?
The survey was conducted across a sample of around 5000 respondents across 10 major nations namely India, the USA, Mexico, The Netherlands, Romania, Poland, Belgium, Spain, Korea and Japan.
A Financial Quotient tool was set up to understand the financial literacy of the respondents.
Though there were different results for different countries, the results for India are very significant to us. First among them was the fact that financial literacy in our country is in the top 2 of the 10 countries surveyed. This goes with the fact that we Indians always have a habit of making sure that our bank balances are safe in whatever situation we are in. Be it insurances, loans, investing in shares and stock markets, Indians are always ready to learn more to be safe.
The Indian tendency of planning well for the future whether it is children’s education loans or pension schemes is shown by the fact that among the 10 we are the best in making sure that our retirement benefits are present. With more and more senior citizens being thrown out of their houses by their children, retirement benefits has become that much more important. Indians are also the largest buyers of insurance products (87%) as compared to 54% globally.
The Indian tendency of saving money for the problematic times is also proven by the fact that on a question “What would do with US$ 100 in the end of the month”, Indians say that they would put it into the savings account. They are among the top most in the world to have an emergency fund (87%), proof of the fact that they seem to be always read to face any eventuality. That’s why it’s said that we are always prepared for all the stages of our lives.
On the other hand, the Americans have turned out to be the exact opposite. With not much importance being given to retirement benefits and having an emergency fund, their notoriety of being conspicuous consumers has again come to the fore.
Now we know, why the recession affected India way lesser than the other countries around the world, isn’t it?