International Personal Finance Financial Inclusion and Wellbeing Report Wave 3 Results April-May 2013

International Personal FinanceFinancial Inclusion and Wellbeing ReportWave 3 Results

April-May 2013

1. Background & Method

2. Economic Outlook

3. Financial Holdings

4. Use of Credit Services

5. Standard of Living

6. Conclusions & Recommendations

Contents

Background & Method

1

IPF currently provides consumer credit to 2.5 million customers, across six international markets. The business offering is unique for the markets in which IPF operates.

This project is designed to engage with IPF’s customer base, understand the issues they have and their feelings towards the society in which they live, and how they can be better represented in the political and commercial worlds.

IPF wishes to use this research to enhance its unique position as a mouthpiece for the lower socio-economic demographic amongst key groups of decision-makers.

This was the third wave to be run using the IPF panel

Please note that any reference in commentary to ‘Czechs’ or ‘Hungarians’ specifically relates to IPF customers in those markets and not the population of the country as a whole

BackgroundBackground

& Method

Mexico only

Method The process was adjusted for this wave in order to invite new registrants

as well as the existing panel

Invitation from IPF to register for the panel

Registration survey

YES Take survey now

NOTake survey later

Reminder to take survey

No response

Complete now

Wave 2 survey

Email invitation from YouGov to

take Wave 3

Call from IPF inviting customer to take part in

Computer Assisted Telephone Interview

(CATI)

Happy to take survey

Refused to take part

IPF customers not previously invited IPF existing panellists IPF customers without email addresses

Background

& Method

Provident Communities

Czech Republic

Online completes

1,796

Hungary

Online completes

4,835Mexico

Online completes

337

CATI completes

205

Slovakia

Online completes

394

Romania

Online completes

1,478

Poland

Online completes

915

Background

& Method

WeightingFor wave 3, we have formalised the weighting process so that the data contained in this report is reflective of IPF’s customer book1. IPF customer book is the split by country of the customer database2. Market-level weighting shows the weighting used in the individual country tables3. Overall-level weighting are the weights used in the overall tables to emphasise the importance of each group in the customer book as a whole

IPF Customer Book

Czech Rep Hungary Mexico Poland Romania Slovakia% of customer book 10.5% 10.0% 28.0% 35.0% 10.9% 5.6%

Market-level weighting

Male 46.6% 42.2% 32.4% 43.5% 44.8% 44.1%Female 53.4% 57.8% 67.6% 56.5% 55.2% 55.9%

18-24 13.7% 6.4% 15.7% 12.9% 5.4% 12.6%25-34 23.3% 18.3% 28.1% 21.2% 21.2% 23.2%35-44 23.3% 24.3% 27.3% 20.5% 29.3% 23.1%45-54 18.2% 20.2% 18.7% 20.8% 19.1% 20.1%

55+ 21.5% 30.8% 10.1% 24.6% 25.1% 21.1%

Overall-level weighting

Czech Rep Hungary Mexico Poland Romania SlovakiaMale 4.9% 4.2% 9.1% 15.2% 4.9% 2.5%

Female 5.6% 5.8% 18.9% 19.8% 6.0% 3.1%18-24 1.4% 0.6% 4.4% 4.5% 0.6% 0.7%25-34 2.4% 1.8% 7.9% 7.4% 2.3% 1.3%35-44 2.4% 2.4% 7.6% 7.2% 3.2% 1.3%45-54 1.9% 2.0% 5.2% 7.3% 2.1% 1.1%

55+ 2.3% 3.1% 2.8% 8.6% 2.7% 1.2%

Background

& Method

Economic Outlook

2

Cost of living is of most concern to half of IPF customers

Cost of living

Loss of your job

Crime in your neighbourhood

Cost of health services

Cost of education

Public service cuts

Other

Not sure

I have no concerns

50%

21%

11%

6%

4%

1%

2%

2%

3%

All

Which of these is of most concern to you currently? Base: All (9,960)

• Unemployment and crime are other elements that worry people• Concern over the cost of living increases with age from 38% of 18-

24 year-olds to 59% of those 55+

Economic

Outlook

A third of people cite increases in food prices as most responsible for the rise in the cost of living• A significant group of others, particularly in Romania, believe that the

rise in utility prices is the main cause• Women are significantly more likely than men to blame the rise on the

increase of food costs (36% vs. 29% of men)• One in ten IPF customers blames increased transport costs

All

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

33%

20%

39%

30%

38%

29%

43%

29%

22%

14%

31%

28%

44%

24%

10%

6%

6%

22%

7%

2%

3%

7%

16%

18%

2%

4%

5%

8%

5%

2%

4%

5%

6%

5%

5%

4%

11%

1%

0%

5%

1%

6%

6%

9%

2%

5%

6%

8%

4%

4%

6%

15%

2%

3%

3%

5%

3%

7%

1%

2%

2%

3%

2%

Increase in cost of food Increase in cost of utilitiesIncrease in transport costs Increase in rent or mortgage paymentsIncrease in cost of consumer/household goods Increase in childcare costsOther Not sureI don’t believe there has been an increase in the cost of living

Which of the following would you say is most responsible for the increase in the cost of living? Please select one answer only. Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Economic

Outlook

Two in three Czechs are most concerned about the cost of living

Which of these is of most concern to you currently? Base: All in Czech Republic (1,796)

• Czechs in late teens/early 20s are those most concerned about losing their job

• 5% of men claim to have no concerns compared to just 2% of womenTotal

Male

Female

18-24

25-34

35-44

45-54

55+

0.64

0.63

0.65

0.58

0.62

0.64

0.67

0.69

0.16

0.17

0.16

0.27

0.15

0.17

0.15

0.11

0.05

0.03

0.07

0.06

0.03

0.03

0.06

0.08

0.11

0.12

0.1

0.07

0.15

0.13

0.09

0.09

0.03

0.05

0.02

0.03

0.05

0.03

0.03

0.03

Cost of living Loss of job Cost of health services Other No concerns

Economic

Outlook

80% of Hungarians are concerned over the cost of living, the highest of all markets

Which of these is of most concern to you currently? Base: All in Hungary (4,835)

• Contrasting to the IPF customer book as a whole, concern over the cost of living decreases with age

• Loss of jobs and cost of health services are of very little concern comparatively

Total

Male

Female

18-24

25-34

35-44

45-54

55+

0.8

0.78

0.81

0.85

0.83

0.81

0.81

0.75

0.04

0.05

0.04

0.04

0.05

0.04

0.04

0.05

0.03

0.03

0.04

0.01

0.01

0.01

0.03

0.06

0.11

0.12

0.1

0.09

0.09

0.13

0.11

0.12

0.02

0.02

0.01

0.01

0.02

0.01

0.01

0.02


Economic

Outlook

Mexico, out of trend with IPF’s European markets, is most concerned about local crime

Which of these is of most concern to you currently? Base: All in Mexico (542): Online (305) + CATI (237)

• One in three worry about neighbourhood crime, compared to only one in ten in IPF’s overall customer book – this may be driven by one of the highest murder rates worldwide

• Cost of living worries significantly more men than women

Total

Male

Female

18-24

25-34

35-44

45+

0.22

0.25

0.21

0.14

0.14

0.29

0.29

0.29

0.28

0.3

0.42

0.39

0.21

0.21

0.34

0.33

0.34

0.29

0.3

0.36

0.38

0.14

0.12

0.14

0.13

0.16

0.14

0.1

0.01

0.02

0.01

0.02

0.01

0

0.02

Cost of living Loss of job Crime in your neighbourhood Other No concerns

Economic

Outlook

Concerns of Poles broadly reflect those of the IPF customer book

Which of these is of most concern to you currently? Base: All in Poland (915)

• Cost of living remains of most concern, with loss of job a worry for one in four people

• This figure reflects an unemployment rate of 14% in Poland, which is gradually decreasing after a high of 20% in 2003*

Total

Male

Female

18-24

25-34

35-44

45-54

55+

0.53

0.52

0.55

0.44

0.48

0.51

0.58

0.61

0.22

0.23

0.21

0.27

0.31

0.24

0.2

0.09

0.1

0.11

0.1

0.09

0.05

0.08

0.08

0.19

0.1

0.09

0.1

0.13

0.11

0.09

0.11

0.1

0.05

0.05

0.04

0.07

0.05

0.08

0.03

0.01


* http://www.tradingeconomics.com/poland/unemployment-rate

Economic

Outlook

http://www.tradingeconomics.com/poland/unemployment-rate

Cost of living is most concerning for Romanians, increasing with age from half of 18-24s to two-thirds of those 55+

Which of these is of most concern to you currently? Base: All in Romania (1,478)

• Loss of jobs follows a reverse trend and unsurprisingly decreases with age

• Romanians are the nation most concerned with the cost of educationTotal

Male

Female

18-24

25-34

35-44

45-54

55+

0.62

0.63

0.61

0.5

0.53

0.62

0.67

0.67

0.17

0.15

0.19

0.24

0.22

0.16

0.18

0.1

0.07

0.07

0.07

0.07

0.08

0.09

0.06

0.04

0.11

0.12

0.11

0.12

0.13

0.11

0.08

0.18

0.03

0.03

0.02

0.07

0.04

0.02

0.01

0.01

Cost of living Loss of job Cost of Education Other No concerns

Economic

Outlook

Slovakians tend to have the same concerns as their Czech neighbours

Which of these is of most concern to you currently? Base: All in Slovakia (394)

• However, they are slightly more concerned about crime in their neighbourhood

• Cost of living is also of most concern in Slovakia, although levels are the same amongst young and old, with the exception of those aged 45-54Total

Male

Female

18-34

35-44

45-54

55+

0.64

0.64

0.65

0.67

0.63

0.57

0.68

0.2

0.17

0.21

0.17

0.23

0.26

0.13

0.04

0.05

0.03

0.03

0.02

0.05

0.05

0.08

0.08

0.08

0.08

0.11

0.07

0.08

0.04

0.06

0.03

0.05

0.01

0.05

0.06

Cost of living Loss of job Crime in your neighbourhood Other No concerns

Economic

Outlook

Just under half of IPF customers believe their national economic situation will deteriorate in the next 12 months

Thinking of the next twelve months, do you expect the economy in your country to get better or worse? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

• A further three in ten foresee stability in their countries• Poles (57%) and Slovakians (54%) are the customers whose outlook

is most negative• Romanians (34%) and Mexican (23%) stand out as people who are

quite positive about the immediate future

All

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

7%

5%

10%

4%

8%

4%

9%

23%

26%

29%

18%

25%

25%

21%

25%

22%

13%

22%

32%

20%

33%

29%

37%

34%

34%

24%

16%

29%

14%

8%

13%

20%

9%

28%

8%

2%

1%

1%

3%

1%

6%

1%

Not sure A lot worse A little worse Will stay the same A little better A lot better

Economic

Outlook

Two in five IPF customers hope that their household financial position will improve in the next 12 months• This contrasts with the feeling that national economies will not improve

in the opinion of the majority• Positivity is driven by increased earnings, new jobs and changing

personal situations• Of the one in five who think their household will get worse, 72% put this

down to living costsBetter

Increased earnings

Changed personal circumstances

New job

Other

Able to work again

Family member sending money from abroad

Help from the state

Not sure

39%

54%

30%

28%

11%

7%

5%

3%

2%

Worse

Increased living cost

Reduced income

Job loss in HH

Not able to work

Changed personal circumstances

Family member stopped sending money from abroad

Other

Not sure

21%

72%

33%

25%

15%

11%

2%

7%

2%

Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change? Base: All (9,960); Better (3,126); Worse (2,448)

Economic

Outlook

Over half of Mexicans feel that their household economic situation will get better in the next 12 months• All other markets fall below the IPF customer average• Czechs and Hungarians are those most negative about the next 12

months, and this feeling is most driven by increases in the cost of living

Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Czech Rep Hungary Mexico Poland Romania Slovakia

Better 26% 27% 55% 37% 37% 33%

Increased hours /earnings 54% 53% 52% 64% 51% 27%

Changed personal / family circumstances 30% 20% 30% 33% 32% 27%

New job 25% 31% 27% 32% 21% 26%

Able to work again 11% 6% 8% 6% 5% 3%

Family member sending money from abroad 2% 5% 2% 7% 12% 3%

Help from the state 5% 2% 2% 4% 1% 3%

Other 11% 12% 11% 12% 9% 15%

Not sure 2% 7% 1% 1% 2% 3%

Czech Rep Hungary Mexico Poland Romania Slovakia

Worse 28% 28% 11% 26% 19% 22%

Increased cost of living 68% 79% 63% 76% 80% 48%

Reduced income / hours 29% 47% 26% 36% 31% 18%

Job loss/ partner job loss 20% 22% 35% 26% 26% 18%

Changed personal / family circumstances 17% 5% 16% 11% 8% 7%

Not able to work 10% 13% 7% 23% 11% 8%

Family member stopped sending money from abroad 1% 7% 0% 2% 3% 0%

Other 9% 7% 4% 9% 7% 2%

Not sure 3% 2% 2% 1% 1% 1%

Economic

Outlook

Household economic situation summary

The cost of living is the predominant worry of IPF customers, who foresee this driving national economic deterioration Primary concerns in driving this are

the price rises in food, utilities and transportOther concerns for people are

crime in local area (particularly Mexico) and

unemployment

Levels of positivity are driven by prospective

increases in earnings

Women are more likely than men to highlight the rise of food prices as a key contributor to increased living costs

Almost half of people believe their

country’s economic situation will decline in the next 12 months

Economic

Outlook

Financial Holdings

3

Almost half of IPF customers do not have a bank account. Only 9% would want one given the opportunity

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: All (9,960)

• One in five have no retirement savings plan, while insurance is also not high on list of financial products IPF customers own

• Life insurance is the product most sought-after for those who do not have it

Bank account

Credit Card

Life insurance

Retirement savings

plan

Buildings insurance

Savings account

Home contents

insurance

ASU in-surance

Mortgage Long term investment

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

54%

33% 32%

20% 19% 19%15% 15% 14%

3%

9% 12%

28%22%

12%

28%

9%

27%

13%

22%

Products owned Products would choose to own

Do not have

products46% 67% 68% 80% 81% 81% 85% 85% 86% 97%

Financial

Holdings

Two-fifths of Czechs have retirement savings plans in place, double the average for IPF customers worldwide

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: CZ (1,796)

• Seven in ten Czechs have a bank account but only one in ten have savings accounts

• ASU insurance tops the list of most-desired financial products

Bank account

Retirement savings

plan

Credit Card

Life insurance

Home contents

insurance

ASU in-surance

Buildings insurance

Mortgage Savings account

Long term investment

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

71%

40%37%

27%25%

18%16%

12% 11%

4%

11%

17%

11%

24%

15%

27%

19% 20%23% 22%


Do not have

products29% 60% 63% 73% 75% 82% 84% 88% 89% 96%

Financial

Holdings

More than three in four Hungarians have bank accounts; only 4% have a savings account

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: HU (4,835)

• Home ownership seems to be relatively high in Hungary with two in five owning a mortgage and just under half holding home contents insurance

Bank account

Home contents

insurance

Mortgage Credit Card

Life insurance

Buildings insurance

ASU in-surance

Retirement savings

plan

Savings account


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

77%

46%

38%

30%23%

19%

10%6% 4%

2%5% 7%

4%7%

25%

5%

16%20%

34%

23%


Do not have

products23% 54% 62% 70% 77% 81% 90% 94% 96% 98%

Financial

Holdings

Bank account ownership is very low in Mexico, with fewer than one in five holding the product

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: MX (542)

• Very few would actually take an account if given the opportunity• Life and ASU insurances are products that Mexicans aspire to have,

as are savings accounts

Retirement savings

plan

Life insurance

Savings account

Credit Card

Bank account

ASU in-surance

Mortgage Long term investment

Buildings insurance

Home contents

insurance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

30%

24%22%

18%

14%

10%

6%4% 3%

1%

22%

30%27%

9% 9%

29%

7%

17%

5% 5%


Do not have

products70% 76% 78% 82% 86% 90% 94% 96% 97% 99%

Financial

Holdings

Almost half of Poles have life insurance in place, the highest figure of all IPF markets

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: PL (915)

• A further quarter would like to have life insurance if they were able to

• Three in four have a bank account and a quarter hold a savings account

Bank account

Life insurance

Credit Card

Buildings insurance

Savings account

ASU in-surance

Mortgage Home contents

insurance

Retirement savings

plan


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

75%

46%40%

25% 25%21%

13% 12% 10%

2%7%

26%

14% 14%

22%

30%

19%

7%

20%23%


Do not have

products25% 54% 60% 75% 75% 79% 87% 88% 90% 98%

Financial

Holdings

Perhaps worryingly, Romanians have more credit cards than any other financial products

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: RO (1,478)

• Romanians would like to be more financially secure, with people wanting savings accounts, life insurance and retirement savings plans

Credit Card

Buildings insurance

Bank account

Life insurance

Home contents

insurance

Retirement savings

plan

Mortgage ASU in-surance

Savings account


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

45%

41%

36%

21%

15%13% 13% 12%

7%

2%

16%

22% 21%

36%

19%

34%

7%

23%

42%

27%


Do not have

products55% 59% 64% 79% 85% 87% 87% 88% 93% 98%

Financial

Holdings

Slovakians have the highest level of bank account ownership of all IPF markets

Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: SK (394)

• Life insurance and retirement savings plans are also owned by at least one in three Slovakians

Bank account

Credit Card

Life insurance

Home contents

insurance

Retirement savings

plan

Mortgage Savings account

ASU in-surance

Buildings insurance


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

85%

43%38% 35% 33%

24% 21% 21% 18%

4%9% 12%

24%

13%18% 19%

32%

23%

2%

29%


Do not have

products15% 57% 62% 65% 67% 76% 79% 79% 82% 96%

Financial

Holdings

Only one in ten Czechs have savings; 70% of people have Kč30,000 or more in debts• 85% are repaying Kč 1,500 or more each month and only 2% are

certain they have nothing to pay each month

Have savings

Not sure

No savings

12%

15%

74%

Less than 15,000 Koruna

15,001-30,000 Koruna

30,001-150,000 Koruna

More than 150,000 Koruna

Not sure

No debt

11%

18%

31%

28%

9%

2%

Less than 1,500 Koruna

1,500-8,000 Koruna

More than 8,000 Koruna

Not sure

No repayments

8%

61%

23%

6%

2%

Cash savings Total debt Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Czech Republic (1,796)

Financial

Holdings

Less than 250,000 forint

250,000-400,000 forint

400,000-2m forint

More than 2m forint

Not sure

No debt

20%

21%

28%

20%

7%

4%

Less than 20,000 forint

20,000-100,000 forint

More than 100,000 forint

Not sure

No repayments

17%

62%

14%

4%

3%


Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Hungary (4,835)

Have savings

Not sure

No savings

3%

7%

90%

Only 3% of Hungarians have savings, with almost half having 400k Forints or more in debts • Only 4% have no debts• Three quarters of Hungarians are repaying 20,000+ Forints each

month

Financial

Holdings

Less than 1,000 zloty

1,001-5,000 zloty

5,001-10,000 zloty

More than 10,000 zloty

Not sure

No debt

11%

26%

19%

35%

4%

4%

Less than 200 zloty

201-700 zloty

More than 700 zloty

Not sure

No repayments

12%

42%

41%

1%

3%


Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Poland (915)

Have savings

Not sure

No savings

13%

9%

78%

Four in five Poles are repaying more than 200 Zloty per month

• This is understandable in a market where only 4% of IPF customers have no debts

• 13% of Poles have savings

Financial

Holdings

Less than 500 lei

501-1,000 lei

1,001-5,000 lei

More than 5,000 lei

Not sure

No debt

6%

19%

47%

21%

4%

3%

Less than 50 lei

50-250 lei

More than 250 lei

Not sure

No repayments

2%

27%

65%

4%

3%


Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Romania (1,478)

Have savings

Not sure

No savings

31%

2%

66%

Two-thirds of Romanians have no savings, the lowest of all IPF markets• Half have debts between one and five thousand lei with two thirds

repaying more than 250 lei each month

Financial

Holdings

Less than 500 Euros

501-1,000 Euros

1,001-5,000 Euros

More than 5,000 Euros

Not sure

No debt

19%

23%

27%

22%

6%

3%

Less than 60 Euros

61-300 Euros

More than 300 Euros

Not sure

No repayments

9%

55%

29%

4%

3%


Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Slovakia (394)

Have savings

Not sure

No savings

15%

18%

67%

Half of Slovakians hold debts of over €1,000; only 3% have no debts• Over half of people need to repay between €60 and €300 each

month• Two-thirds do not hold savings

Financial

Holdings

Financial Holdings summary

Only 54% of IPF customers

actually hold a bank account

Credit card ownership is higher than any form of savings

1234 1234 1234 1234

BANK

Mr Smith

There are positive levels of aspiration towards savings, long-term investments and retirement planning, provided the circumstances are correct

People are also aspiring to protect themselves against the

economic situation with both Life and ASU insurance

Despite this, repayments for the majority

appear to be at an affordable level

Levels of savings are generally low across all European markets and very few people are debt-free

Financial

Holdings

Use of credit services

4

More than half of IPF customers believe that it has become more difficult to attain credit in the last few years• Hungarians and Romanians are the people who claim the process

has become more difficult than any others• A quarter of Slovakians and Mexicans assert that getting credit has

become easier• Those most worried about the cost of living are most likely to

believe that attaining credit has become more difficultAll

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

9%

13%

18%

3%

8%

6%

20%

55%

41%

62%

54%

58%

62%

34%

23%

35%

16%

19%

22%

25%

22%

14%

11%

4%

23%

11%

6%

23%

Not sure More difficult About the same Easier

Would you say that it has become easier or more difficult to get credit in the last two to three years? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Use of credit

services

Six in ten IPF customers believe that they would have trouble trying to borrow money from a mainstream bank or lender• However, a quarter think they would be able to, especially those in

Slovakia• Hungarians feel they would be least likely to attain credit in this

way• Females and those aged 55+ are the most likely to believe they

would struggleAll

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

14%

15%

15%

7%

18%

18%

23%

16%

20%

23%

12%

17%

13%

8%

44%

37%

48%

57%

38%

43%

30%

20%

22%

12%

21%

19%

22%

29%

6%

6%

2%

3%

9%

5%

9%

Not sure Impossible Difficult Quite easy Very easy

How easy do you think it would be for you to borrow [local currency] from a mainstream bank or lender? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Use of credit

services

Unexpected costs

Housing costs

Purchase of household appliances

Healthcare

Education

Purchase of electrical devices

Food

Purchase of clothes and shoes

Entertainment, hobbies

Jewellery

Other

Would not take loan for any of these

47%

28%

27%

26%

21%

13%

17%

9%

6%

1%

10%

9%

All

Nine in ten IPF customers would be prepared to take a loan; half of these would do so in order to pay for unexpected costs• Housing costs and purchase of household appliances are also items

people would take a loan to pay for, even given greater consideration than health costs

• Only 4% of 18-24s would not take a loan compared to 12% of those aged 55+

Would you consider taking a loan for the following? Choose as many as apply.Base: All (9,960)

Use of credit

services

Unexpected costs


Healthcare

Housing costs


Education

Food



Jewellery

Other


54%

33%

25%

25%

14%

14%

9%

4%

4%

1%

5%

10%

Czech Rep

A third of Czechs would use loans to purchase household appliances; significantly higher amongst women than men• Unexpected costs are still the expenses that most would consider

taking a loan for• Consideration for taking a loan for housing costs decreases with

age in line with life stage

Would you consider taking a loan for the following? Choose as many as apply.Base: CZ (1,796)

Use of credit

services

Unexpected costs

Housing costs


Healthcare


Food

Education



Jewellery

Other


48%

29%

19%

13%

9%

9%

7%

5%

4%

0%

5%

24%

Hungary

A quarter of Hungarians would not take a loan for any costs outside of the essential• Unexpected costs and housing costs are those Hungarians would be

most prepared to take loans for• 12% of men would be prepared to take a loan for the purchase of

electrical devices, compared to only 7% of women

Would you consider taking a loan for the following? Choose as many as apply.Base: HU (4,835)

Use of credit

services

Unexpected costs

Education

Healthcare

Housing costs

Food





Jewellery

Other


53%

41%

37%

28%

28%

13%

9%

9%

5%

1%

12%

7%

Mexico

Mexicans would be significantly more likely than their European counterparts to take out loans to pay for education or healthcare• Half of 18-24 year-olds would do so in order to pay education fees• 39% of women would take a loan for healthcare compared to only

33% of men

Would you consider taking a loan for the following? Choose as many as apply.Base: MX (542)

Use of credit

services

Unexpected costs


Housing costs

Healthcare


Food


Education


Jewellery

Other


43%

34%

29%

23%

18%

18%

13%

12%

7%

1%

12%

7%

Poland

Poles are the European group most likely to take a loan in order to pay for food• Men are significantly more likely than women to take a loan for

unexpected costs (49% vs. 38% respectively)• A third of Poles would use a loan for housing costs or purchase of

household appliances

Would you consider taking a loan for the following? Choose as many as apply.Base: PL (915)

Use of credit

services

Unexpected costs


Housing costs

Education

Healthcare


Food



Jewellery

Other


37%

35%

28%

22%

21%

12%

8%

7%

4%

1%

6%

8%

Romania

For Romanians, purchase of household appliances is almost as likely as unexpected costs to warrant taking a loan• Men and young people would prioritise unexpected costs, while

women are more likely to use a loan for household appliances

Would you consider taking a loan for the following? Choose as many as apply.Base: RO (1,478)

Use of credit

services

Unexpected costs


Healthcare

Housing costs


Food

Education



Jewellery

Other


57%

33%

26%

26%

14%

13%

11%

8%

7%

1%

7%

11%

Slovakia

Slovakians are the group most likely to take a loan in order to pay for unexpected costs• A quarter of individuals would use a loan for housing costs: 22% of

men compared to 30% of women• Preparedness to use a loan to pay for healthcare increases with age

Would you consider taking a loan for the following? Choose as many as apply.Base: SK (394)

Use of credit

services

The overwhelming majority of IPF customers claim to use credit in a sensible way, borrowing only when necessary

Please indicate whether you agree of disagree with each of the following statements… Base: All (9,960)

• This is manifested by 93% thinking before they borrow, 87% only using credit in emergencies and 84% not borrowing unless they know they can afford repayments

• Comfort in affording credit repayments appears to decrease with ageI think carefully before I borrow

I tend to use credit on impulse

I only use credit in an emergency

I use credit regularly just as part of the way I manage my budget

I usually borrow as much as the lender will allow me

I never borrow more than I know I can repay without difficulty

I can comfortably afford my credit repayments

93%

16%

87%

33%

34%

84%

69%

7%

84%

13%

67%

66%

16%

31%

Agree Disagree

Use of credit

services

One in five Czechs tend to use credit on impulse, significantly higher than the 16% of IPF customers as a whole

Please indicate whether you agree of disagree with each of the following statements… Base: All in Czech Republic (1,796)

• 69% of men claim they can comfortably afford credit repayments compared to only 63% of women

I think carefully before I borrow







91%

21%

88%

36%

34%

85%

66%

9%

79%

12%

64%

66%

15%

34%

Agree Disagree

Use of credit

services

Only four in ten Hungarians can comfortably afford to repay their credit loans

Please indicate whether you agree of disagree with each of the following statements… Base: All in Hungary (4,835)

• This compares to seven in ten of the overall IPF customer book • Impulsive credit use is significantly higher amongst men compared

to their female counterparts, who tend to prefer emergency credit use only








95%

13%

86%

32%

37%

82%

40%

5%

87%

14%

68%

63%

18%

60%

Agree Disagree

Use of credit

services

86% of Mexicans can comfortably afford their credit repayments

Please indicate whether you agree of disagree with each of the following statements… Base: All in Mexico (542): Online (305) + CATI (237)

• Only one in ten use credit on impulse, a more restrained proportion than all European markets

• Only 14% will usually borrow as much as the lender will allow, compared to 34% of IPF customers worldwide








95%

10%

91%

33%

14%

80%

86%

5%

90%

9%

67%

86%

20%

14%

Agree Disagree

Use of credit

services

Just a quarter of Poles use credit as part of the way they manage their budget

Please indicate whether you agree of disagree with each of the following statements… Base: All in Poland (915)

• However, 20% tend to use credit on impulse, more than most other markets

• 45% will borrow as much as the lender will give them, significantly higher than the IPF average








92%

20%

84%

27%

45%

84%

68%

8%

80%

16%

73%

55%

16%

32%

Agree Disagree

Use of credit

services

Romanians seemingly treat credit differently to most of their counterparts in other IPF markets

Please indicate whether you agree of disagree with each of the following statements… Base: All in Romania (1,478)

• This is demonstrated by almost half of Romanians using credit as part of their budget management

• Nine in ten do not borrow more than they can repay (91% vs. 84% of IPF average)








94%

12%

88%

45%

38%

91%

61%

6%

88%

12%

55%

62%

9%

39%

Agree Disagree

Use of credit

services

Three in five Slovakians will only borrow as much as the lender will allow

Please indicate whether you agree of disagree with each of the following statements… Base: All in Slovakia (394)

• This figure is comprised of 55% of men compared to 62% of women• 85% only use credit in an emergency, although 35% say they use it

as part of their budget management








92%

19%

85%

35%

59%

90%

62%

8%

81%

15%

65%

41%

10%

38%

Agree Disagree

Use of credit

services

Speed and con-venience

Special deals for cus-tomers

Excellent customer service

Good reputation Opportunity for addi-tional purchases

0%

10%

20%

30%

40%

50%

60%

70%

80%

65%

54% 53%

48%

19%

66%

29%

34%

56%

9%

61%

51%53%

18%

28%

52%

44%

48%

61%

24%

74%

70%

62%

44%

16%

69%

57%

61%

45%

21%

69%

51% 52%

58%

12%

All Czech Rep Hungary Mexico Poland Romania Slovakia

Two-thirds of IPF customers allude to speed and convenience as key factors when dealing with a financial organisation• Mexicans stand out as they look for good reputation as the highest

priority• Special deals for customers are particularly treasured amongst

Poles• Those aged 35-44 are the group most likely to look for special deals

for loyal & long-standing customers

Which of the following is important to you when dealing with a financial organisation? Choose as many as apply.Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Use of credit

services

Use of credit services summary

In the opinion of the majority, attaining credit

has become more difficult in the last few years

Credit is generally used sensibly by IPF customers: only in emergencies and after careful consideration

Most claim that they only borrow as much as they can comfortably afford to repay

Taking a loan to pay for something is a course of action most would consider

Unexpected costs are the amounts people would most likely borrow for. At least a quarter would use a loan to pay for housing, household appliances or healthcare

Speed and convenience are the factors most sought after when dealing with financial organisations

60% believe they would find it difficult or impossible to take credit from a mainstream lender

Use of credit

services

Standard of living

5

More than three quarters of IPF customers worldwide have spent cautiously in the last 12 months• Cautious spending seemingly increases with age• Romanians are those who have been prepared to spend a little

more freely • Hungarians are the most cautious with nine in ten spending more

carefully than pastMuch more

cautiousA little more

cautiousAbout the same

as usualSpending a little

more freelySpending a lot

more freely

All 45% 32% 14% 5% 2%

Czech Rep 39% 27% 22% 5% 6%

Hungary 65% 25% 6% 1% 0%

Mexico 45% 37% 9% 8% 1%

Poland 44% 37% 15% 2% 1%

Romania 40% 20% 20% 11% 7%

Slovakia 33% 23% 27% 9% 3%

Thinking about day-to-day spending over the last twelve months, which of the following would apply to how you have approached spending in current economic conditions? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Living

Standards

Amongst those whose spending has been more cautious in the past 12 months, socialising is the expenditure most reduced• This is followed very closely by consumer goods and holidays, all

three items that could be considered non-essential• Hungarians and Romanians are significantly more likely than other

people to cut back on consumer goods• Three in four Poles have cut their socialising

You have said that you have been more cautious in your spending in the last 12 months. Which if any of the following have you cut back on in order to decrease your level of day-to-day spending over the last twelve months? Please select all that apply. Base: All whose spending is more cautious (7,847), CZ (1,176), HU (4,384), MX (451), PL (741), RO (870), SK (225)

Socialising

Consumer/household goods

Holidays

Telephone

70%

68%

63%

45%

68%

68%

64%

52%

67%

76%

56%

54%

66%

63%

60%

43%

74%

67%

65%

42%

73%

76%

74%

47%

70%

68%

69%

47%

Slovakia Romania Poland Mexico Hungary Czech Rep All1/2

Living

Standards

Two in five IPF customers have cut back on quality food in order to spend more cautiously• However, this rises to two in three in Hungary, and is at a similar

level in Romania• Heating is also something that half of Hungarians are cutting back

on• Women are more likely to cut back on consumer goods while men

have reduced spending on transport

You have said that you have been more cautious in your spending in the last 12 months. Which if any of the following have you cut back on in order to decrease your level of day-to-day spending over the last twelve months? Please select all that apply. Base: All whose spending is more cautious (7,847), CZ (1,176), HU (4,384), MX (451), PL (741), RO (870), SK (225)

Quality food

Transport

Heating

Healthcare expenditure

Education expenditure

38%

31%

29%

15%

11%

38%

27%

26%

9%

10%

64%

41%

48%

16%

7%

20%

28%

28%

20%

14%

41%

30%

26%

12%

11%

62%

30%

27%

16%

9%

30%

37%

30%

7%

12%

Slovakia Romania Poland Mexico Hungary Czech Rep All2/2

Living

Standards

Three-quarters of IPF customers would find it hard to summon up money for emergency payments, or to save for a major purchase• Mexicans feel it would be easier to find the money for these causes• Hungarians are the people most likely to find it difficult

7% 6% 8% 5% 6% 4% 5% 8% 7% 5%10% 8%

17%11%

21% 24%26% 39%

42% 48%

9% 6%

23% 26%22% 23%

23% 33%

53% 51% 48%50%

47%43%

59%50%

54%55% 52% 54% 38%

43%

16% 17% 15% 15%

4% 4%

25%35%

13%12% 14% 12%

20%

12%

3% 1% 3% 3% 1% 0% 2% 1% 4%2%

3%2%

3% 1%

Very easy

Quite easy

Difficult

Impossible

Not sureAll Czech Rep Hungary Mexico Poland Romania Slovakia

If you were to face an emergency or an unexpected bill or expense how easy or difficult would it be for you to find -amount- without borrowing? How easy or difficult would you find it to save -amount- for a major purchase of something that you needed? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Living

Standards

Four in ten people are satisfied with the standard of living in their household; a quarter are dissatisfied• Positivity is far greater in Mexico, with two-thirds satisfied with

their living standards• Hungarians have the lowest levels of satisfaction, with over half

feeling indifferent• Satisfaction with standard of living is significantly lower as people

get older (50% of 18-24 year-olds vs. 30% of those aged 55+)All

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

1%

1%

3%

1%

1%

1%

2%

27%

34%

35%

21%

26%

33%

27%

30%

30%

55%

13%

35%

35%

33%

41%

36%

7%

65%

37%

31%

39%

Not sure Dissatisfied Neither satisfied nor dissatisfied Satisfied

Generally, how satisfied are you with the overall standard of living of your household?Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394)

Living

Standards

Standard of living summary

IPF customers have spent more cautiously in the past 12 months, a trend that increases with age

Socialising, consumer goods and holidays are the items cautious spenders are most likely to cut down on

Worryingly, a significant proportion of people are reducing their spending on quality food

The majority of people would be unable to find money to make emergency payments or save for major purchases

Fewer than half of people are satisfied with

their overall standard of living

Living

Standards

Conclusions & Recommendations

6

The cost of living is of most concern to people, driven in the main by increases in the price of daily essentials, most notably food, utilities and transport

Mexico, out of alignment with its European counterparts, is the only IPF market where the major concern is something other than cost of living; in their case it is neighbourhood crime which most worries people

Some do foresee a wave of economic stability reaching their respective countries, but the majority uphold a negative outlook, predominantly motivated by the high cost of living

Where economic positivity prevails, it is propelled by improvements in the employment market: either by a change of job, or an increased income

Many aspire to own savings and insurance products, but the reality is that few have these while a significant proportion hold credit cards

Summary of findings (1)

Very few individuals are debt-free, but repayment levels are manageable for most

This is supported by the majority of IPF customers using credit in a sensible fashion, giving it due consideration before attaining it

Most individuals would use loans to pay for things, although this attitude generally applies to unexpected costs

This is because the majority of people would find it hard to make emergency payments or save for a particular purchase, no doubt supported by relatively few having savings of any amount


Reductions in expenditure are now commonplace for IPF customers, for whom spending has consciously become more cautious in the past 12 months

Fewer than half of people are satisfied with their overall standard of living


What do people think is holding them back from taking out savings products? Is it a simple case of lack of money or something more significant?

Is there common consensus about what is driving those who feel the economy faces a positive future?

The majority claim to use credit in a sensible way, but is this the case when they approach IPF? Have they thought it through, and if so what processes have allowed them to arrive at the decision to take credit?

We know how much people are repaying each month, but is there value in understanding the percentage of their monthly income that goes straight out to cover debts?

What do people believe will improve their outlook on standard of living?

Potential subjects for revisiting

ContactLeo Brownstein, YouGov Financial Services

[email protected] Tel: 0207 012 6013

mailto:[email protected]

Documents

International Personal Finance Financial Inclusion and Wellbeing Report Wave 3 Results April-May 2013