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Youth in Asia/Pacific’s Developing Markets More Money Savvy, But Still Work to Be Done: MasterCard Index of Financial Literacy
13/03/2014
 

Singapore, 13 March 2014 – How much do youth in the Asia/Pacific region know about money management, financial planning and investment? The MasterCard Index of Financial Literacy reveals that youth from Hong Kong lead the region in overall financial literacy and investment know-how, while those from developing markets such as Malaysia, China and India are fast catching up with their counterparts in developed markets in their aptitude for, and knowledge of, managing their finances.

The MasterCard Index of Financial Literacy is based on a survey conducted between April 2013 and May 2013 in 16 Asia/Pacific[1] markets. During Global Money Week, MasterCard is releasing a special edition of the research focusing on youth financial literacy across the region. The survey polled consumers aged 18-29 on three aspects of financial literacy including their basic money management skills, investment knowledge[2] and financial planning to determine the level of basic money management skills in terms of budgeting, savings, and responsibility of credit usage. The survey and its accompanying reports do not represent MasterCard financial performance.

Frontrunners among the 16 Asia/Pacific markets were Hong Kong (69 index points), which retained its number one position, as well as New Zealand (68 index points) and Singapore (68 index points), rising from sixth and fifth position, respectively. Youth from the developing markets of Malaysia (up six places to 4th), China (up four places to 9th) and India (up four places to 11th) showed the most significant progress in the region in overall financial literacy. Vietnam (58 index points), Korea (55 index points) and Japan (52 index points) rank at the bottom of the region, with Korea dropping eight places to take the 15th spot (55 index points).

Youth from New Zealand (75 index points) overtook those from Hong Kong (71 index points) to come out top in overall basic money management, which includes skills such as day-to-day budgeting, keeping up with bills, credit commitments and setting money aside for big purchases, just ahead of Australia and Singapore. India (51 index points), Korea (50 index points) and Myanmar (48 index points) performed the most poorly in the region.

In terms of savings and planning for the unexpected and retirement, youth from Myanmar (86 index points) are the region's best financial planners, ahead of their peers from Thailand (82 index points) who jumped from 9th to 2nd position, and Taiwan (81 index points).

Hong Kong youth (63 index points) are the most savvy when it comes to investments, showing a good understanding of their financial statements and the suitability of financial products for their needs. China (61 index points) and India (59 index points) are not too far behind, with Indian respondents showing significant improvement in their investment acumen, jumping eight places to claim the 3rd spot.

Georgette Tan, group head, Communications, Asia/Pacific, Middle East & Africa, said, “As the next generation of adult consumers, young people need to be armed with an understanding of how to plan, manage, and invest their money as this is critical to their future well-being. We've seen from the Index that while youth in markets such as Hong Kong and New Zealand are well-equipped, some others are lagging behind, indicating that more education is required on this front.

“MasterCard supports a variety of organizations and programs in the region that focus on financial literacy because we believe that empowering and equipping young people with financial management knowledge and skills will benefit them, their families and communities in the long term.”

Asia/ Pacific – Youth: MasterCard Index of Financial Literacy 2013

[1] Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam

[2] The investment questions were not asked of Myanmar respondents as Myanmar does not have a functioning stock market.

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