Thai women top financial literacy

Just how much do women across Asia Pacific know about managing finances?

MasterCard Worldwide’s inaugural Index of Financial Literacy released today highlights that women across Asia Pacific are financially savvy to some extent, in particular among the over 30, married, working group, but that the level of financial literacy in women can be raised further, especially among the younger generation.

Thai women topped the Financial Literacy Index with an Index score of 73.9. They had the highest scores in Financial Planning (87.0) and Investments (69.3), outshining their peers in the other 13 Asia Pacific markets surveyed. Also noteworthy was Vietnamese women, who took fourth place, with an overall Index score of 70.1.

In contrast, the more developed markets of Korea (55.9) and Japan (59.9) make up the lower spectrum of the Index.

The MasterCard Index of Financial Literacy is based on a survey of consumers from the following 24 markets: Australia, China, Egypt, Hong Kong, India, Indonesia, Japan, Kenya, Kuwait, Lebanon, Malaysia, Morocco, New Zealand, Nigeria, Philippines, Qatar, Saudi Arabia, South Africa, South Korea, Singapore, Taiwan, Thailand, United Arab Emirates and Vietnam.

It comprises three major components: Basic Money Management, which examines the respondents’ skills in terms of budgeting, savings and responsibility of credit usage; Financial Planning, which assesses their knowledge of financial products, services, concepts and ability to make long-term plans for financial needs; and Investment, which indicates their basic understanding of the various investment risks, different investment products and if they have the necessary skills.

The Index score is calculated from the weighted sum of the three components, with 100 as the maximum score in financial literacy and zero as the lowest possible score. The survey was conducted between 13 September and 11 November 2010.

Of the three components that make up the survey, women across Asia Pacific as a whole scored the best in Financial Planning (74.6), followed by Basic Money Management (63.9) and Investment (56.7).

Among the developed markets, New Zealand and Australia had the second (71.3) and third (70.2) highest overall Index scores. They also led in Basic Money Management with scores of 76.7 and 75.8 respectively. They did not perform as strongly in Financial Planning, coming in under the 12 market average, and Investment (58.3 and 55.2 respectively).

Singapore in fifth place did relatively well in terms of basic money management (70.0) as well as financial planning (80.4). However, Singaporean women were outshined by their counterparts from the other markets surveyed in terms of investment skills and knowledge, as indicated by their score of 51.5 which is below the regional average.

The developing markets of the Philippines (68.2), Indonesia (66.5) and Malaysia (66.0), were also in the Index top 10, outperforming their counterparts in India, China, Japan and Korea.

The most populous developing markets in the world, India (61.4) and China (60.1) reflected a lower Financial Literacy score among women. Chinese and Indian women are particularly weak in Basic Money Management (54.4 and 58.8), near the bottom of the ranking for that component in Asia Pacific. While, Japan and Korea are the only two markets in Asia Pacific with a Women’s Financial Literacy Index score that falls below 60.

“This new MasterCard Index has certainly provided us with fresh insights to women’s aptitude for and knowledge of managing their finances. While it is encouraging to see that women across Asia Pacific have some basic degree of financial literacy, it is also apparent that there is still work to be done to improve levels across the board. There is something to be said for the strong performance of Thai and Vietnamese women in the rankings – these are markets where rapid socio-economic advancement has given women vital and valuable first-hand entrepreneurial experience and exposure to financial planning and money management concepts,” observed Georgette Tan, vice president, Communications, Asia Pacific, Middle East and Africa, MasterCard Worldwide. “With the financial world becoming increasingly complex, there is a compelling need for women to be more financially confident and competent. As an organization committed to the empowerment of women in our communities, MasterCard will continue to work towards raising financial literacy in the region.” –http://www.asiatraveltips.com/news11/23-FinancialLiteracy.shtml