A recent survey from S&P Global FinLit has identified Southeast Asia as the world region with the poorest levels of financial literacy across the population. A definition of financial literacy can be found in the PDF attachment to this post.
Financial literacy across many Asian countries was recorded as below average, with countries in Southeast Asia scoring the worst. With the exception of Myanmar and Singapore, no Southeast Asian country had a financially literate population of over 30%. In Cambodia, only 18% of adults were identified as financially literate.
Most other Asian countries scored somewhere between 30% and 40% of the adult population, with some – including Japan, Bahrain, Kuwait and Hong Kong – scoring higher than 40%. Some further statistics for global financial literacy can be viewed in the embedded infographic.
Jeremy Cole, Red Rose co-founder, is the founder of an online platform specifically designed to empower women around the world. MyBixie – with Jerry Cole at the helm – does this by improving their financial literacy and providing a range of tools to help them manage their personal finances.
Growing Consumer Base
The recorded levels of financial literacy across Southeast Asia are worrying when placed into the context of consumerism. Experts have forecast that approximately two-thirds of the entire global middle-class will be living in Asia by the year 2030.
On top of this, population growth on the continent is expected to reach around 5.3 billion by 2050. This leaves a large proportion of global consumer spending power in the hands of people who have not been educated in how to handle disposable income responsibly. Financial ignorance can quickly lead to poor spending and borrowing decisions, which results in higher levels of personal debt and lower levels of savings.
The short video attachment looks at the rise of the digital consumer in Southeast Asia.
Financial Literacy Workshop
As part of the solution to this problem, the Association of Southeast Asian Nations (ASEAN) partnered with the policy leadership alliance AFI-Global to deliver a digital financial literacy workshop at the end of November 2020.
This workshop was designed specifically to inform ASEAN countries of a policy note expected in 2021 focusing on digital financial literacy. This policy note will help to advance the implementation of a variety of initiatives to improve digital financial literacy across Southeast Asian countries, complementing existing efforts to raise the levels of financial literacy.