Measuring financial literacy in Asia: Experiences from Thailand
OECD Seminar on Financial Inclusion and Financial Literacy in Asia Bangkok, Thailand
16 December 2014
2
Topics
1 • Survey overview
2 • Coverage and methodology
3 • Questionnaire content
4 • Survey results
5 • Policy recommendations and next steps
3
Survey overview
Objectives • To measure financial literacy levels • To develop evidence-based
financial literacy strategy • To monitor development in financial
literacy level
Type of survey • A part of the National household
survey • Conducted once every three years • In collaboration with the National
Statistical Office of Thailand (NSO)
Questionnaire content • Based on OECD’s core
questionnaire with a few modifications
• Consists of 3 main components: • Financial knowledge • Financial behaviour • Financial attitude
Preparation for fieldwork • Internal focus group – to test
comprehensibility and applicability • Seminars for interviewers – to provide
survey background and clarification • Prepared documents for fieldwork – to
assist interviewer such as showcards
• Land area 513,120 sq.km • Population (2013 estimate) 66.7 million people • 77 provinces
• Stratified two-stage sampling (77 strata)
- Primary sampling units: Proportional Selection of blocks/villages
- Secondary sampling units: Systematical selection of private sampled households
• Nationwide fieldwork in Q1/2013 • Sample size of 10,627 participants • Face-to-face interviews with household head or other members
Source : Bank of Thailand, National Statistical Office and Department of Provincial Administration, Ministry of Interior
4
Coverage and Methodology Thailand at a glance
Sampling methodology
Data collection
5
Questionnaire Content Modifications on knowledge and attitude questions. • Knowledge
o excluded questions: risk and return, inflation, diversification o additional questions : credit record and deposit protection policy
• Attitude – only one question retained
Knowledge (total 7 questions – 8 marks)
Behaviour (total 8 questions – 9 marks)
Attitude (total 1 question – 5 marks)
Division Time value of money Interest paid on loan
Simple interest Compound interest
Risk & Return Inflation
Diversification Credit record
Deposit protection
Considered purchase Timely bill payment
Keeping watch of financial affairs
Long term financial goal setting
Responsible and has a household budget
Active saving Choosing products
Borrowing to make ends meet
I find it more satisfying to spend money than to save
it for the LT I tend to live for
today and let tomorrow take care
of itself
Money is there to be spent
6
Survey Results
Financial Knowledge Avg. 46.8%
Areas for further improvement: - Compound interest -Deposit protection policy
-Time value of money
Financial Behaviour Avg. 65.6%
Financial Attitude
Avg. 64.5%
Total FL score - Avg. 58.5%
Areas for further improvement: -Household financing and budgeting
-Choosing financial products
-Making ends meet without borrowing
Having positive attitude towards saving for the future
Relationship analysis
- Positive relationship - Implication: Financial behaviour can be improved through financial knowledge enhancement.
Knowledge & Behaviour
- No significant relationship found - However, this analysis is only based on 1 question (variable) - More variables might be added for further analysis
Knowledge & Attitude
Main Findings: Financial literacy score & Relationship analysis
7
Survey Results
Most of the findings are in line with OECD’s Main Findings: Variation by Socio-Demographics
Gender Age Income Education
Financial knowledge
Financial behaviour and
attitude
>
=
Low financial literacy in youth
and elderly
>
Financial literacy
>
Financial literacy
8
Policy recommendations and next steps
• Financial education program should aim at: o Priority targets: Low income and low education groups o Topics:- Financial knowledge: compound interest, deposit protection policy, time value of money
-Financial behaviour: responsible finances and budgeting, choosing financial products, not to borrow discipline
• Long-term policy on financial education needs collaboration from government, financial regulators, and private sector to articulate sustainable financial education
Policy recommendations
• Survey improvement: o Exclusive survey on financial literacy – convenient for questionnaire content and survey length specification o Sustainable platform for the survey – such as web-based survey. • Consumer insight survey: oGather information on various aspects – such as attitudes, lifestyle, media consumption, needs and wants in financial education oDevelop a communication strategy – for a better reach to each target group.
Next steps