| James Kon |
NEARLY 50 per cent of Bruneians do not have basic financial knowledge, a survey has found.
About 34 per cent of households do not have a budget, majority of people do not save enough and 25 per cent resort to borrowing, revealed a financial literacy survey conducted by the Centre for Strategic and Policy Studies (CSPS) with the support of Autoriti Monetari Brunei Darussalam (AMBD).
“About half of the people who were surveyed did not achieve a sufficient score in basic financial understanding. There is a significant lack in numeracy skills required for calculating percentages and less than half of the sample was not able to calculate simple interest,” researchers Dr Diana Cheong and Dr Giuseppe Rizzo of CSPS said, revealing the findings of the survey in a press conference yesterday.
The survey unearthed a number of risk behaviours which will have significant policy implications, chief researcher Dr Diana noted. “For example, a significant 34 per cent of households do not have a budget. Though 87 per cent have been saving in the last 12 months, most of whom we interviewed do not actively save compared to the 15 to 30 per cent in other high income economies. About 25 per cent of our sample has resorted to borrow the last time their income fell short of their expenditure compared to less than 15 per cent in other developed economies. 60 per cent of the sample cannot cover their expenses for more than two months if they lost their income and 36 per cent cannot cover one month.”
Although savings increase with age, she said, “only 36 per cent of the sample above 50 years old is able to cover at least six months of their expenses”.
Dr Diana Cheong. – JAMES KON
In terms of credit card and bank account, 30 per cent of card holders usually make only the minimum payment on their outstanding balance while 23 per cent of bank account holders monitor their bank account only less than once a month.
The survey, which was carried out to measure the level of financial literacy in the country and analyse the reasons for its poor state, took more than a month to complete with the help of 70 trained field workers who employed the knowledge, attitude and behaviour (KAB) approach to collect the data. The survey also aimed to propose a national strategy to improve financial literacy.
In terms of attitude, Dr Cheong pointed out some positive findings in the survey as well. “Most individuals have a positive attitude towards planning for the future but this does not necessarily translate into behaviour change. Other key factors obviously affect financial behaviour such as knowledge, financial resources and environment.”
In terms of behaviour, she said “more than 40 per cent of Bruneians do not achieve a sufficient score in the financial behaviour area”.
Brunei’s overall financial literacy, she explained, “is actually not much lower than that in other countries. It is indeed a universal policy problem. However, we must remember that this is a measure of basic financial understanding which is required for an individual to be able to participate fully in a modern financial society and for social inclusion. Therefore, just like our aim to achieve 100 per cent linguistic literacy, we should also aim for the same in financial literacy to attain the goals of Wawasan.”
Based on the analysis of the findings, Dr Cheong said the CSPS has proposed for the creation of a central body to lead and implement a national strategy for financial literacy under the AMBD. The CSPS has also suggested four strategic themes for the national strategy to remedy the revealed lack of knowledge, namely Financial Education, Free and Independent Information, Institutional Design and Regulation and Government and Evaluation.
Financial Education is aimed at behavioural change, through school education, workplace training and community learning initiatives. A professional development scheme is also necessary to achieve a critical mass of trainers and financial counselors.
Free and independent information is to improve accessibility to the financial system, which will make use of a national one-stop website, mobile applications, traditional and social media including face-to- face discussions for people with specific needs.
Institutional design and regulation is to improve the socio-economic and financial environment of consumers and small and medium enterprises by launching initiatives to promote financial innovation to help people make good decisions.
Governance and evaluation will focus on implementing and reviewing strategies to engage all relevant stakeholders and evaluating the impact of the initiatives as a whole.
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