September 24, 2012
Kuwait City, Kuwait, 24 September 2012 - MasterCard (http://newsroom.mastercard.com/) has announced the results of its latest Index of Financial Literacy, which reveals that consumers in Kuwait have become more financially savvy over time. Respondents in Kuwait have increased their overall financial literacy ranking in the Middle East from 7th place in 2010 to 6th place in the latest Index, and also improved their basic money management ranking.
The MasterCard Worldwide Index of Financial Literacy is based on a survey conducted between 24 April 2012 and 10 June 2012 with 11,376 respondents aged 18 – 64 in 25 countries. This is the 3rd survey of Financial Literacy conducted since 2010. The survey polled consumers on three aspects of financial literacy including their basic money management skills, investment knowledge 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’s financial performance.
Consumers in Kuwait ranked 6th in the Middle East with a score of 58 index points in the MasterCard Index of Financial Literacy. Respondents were aligned with the regional average on the Index’s financial planning component (63%), and were particularly well prepared when it came to emergency savings and saving regularly. The financial planning scores were followed by basic money management (57%) and investment (51%). Respondents’ basic money management score improved from 54% in 2010, while their investment score remained consistent. Consumers in Kuwait were particularly adept at budgeting and keeping track of their expenditures.
“The MasterCard Index of Financial Literacy has provided us with fresh insights into the Kuwaiti consumers’ understanding of household finances. The increase in Kuwait’s overall financial literacy ranking is encouraging, and the results indicate that consumers are becoming more skilled in terms of budgeting, saving and credit usage. Advanced financial literacy skills help households in planning for the future responsibly,” said Safdar Khan, market manager, Qatar, Oman and Kuwait, MasterCard Worldwide.
Middle East highlights:
- The Middle East’s aggregate financial literacy score decreased slightly from 63 index points in 2010 to 61 index points in 2012.
- Consumers in the Middle East scored highest in terms of knowledge about financial planning (64%) followed by basic money management (62%) and investment (54%).
- While slight disparities exist, men and women were largely on par in terms of financial literacy in the Middle East. In Kuwait, men achieved higher scores than women (58 vs. 57 points), though only marginally so.
- Age does not seem to significantly affect levels of financial literacy as respondents under 30 years of age as well as those over 30 years of age showed the same level of financial literacy (61 index points) in the Middle East.
Other market highlights:
- Egypt (69 index points) was ranked the top Middle East market with respect to the overall financial literacy index score, followed by Saudi Arabia (62 index points), the UAE (61 index points) and Lebanon (61 index points).
- Egypt took the lead in terms of basic money management (75%), followed by Saudi Arabia (65%) and Lebanon (61%).
- Egypt also ranked first for financial planning (70%), followed by Lebanon (66%) the UAE (65%) and Oman (65%).
- The UAE scored highest in the investment component of the survey (57%), followed by Qatar (55%) and Lebanon (55%).
|Overall Financial Literacy Index||Components of Financial Literacy Index|
|Basic Money Management||Financial Planning||Investment|
The Index is based on a survey of consumers from 25 markets across APMEA and comprises questions covering three major components:
- Basic Money Management (50% weight): To determine the level of basic money management skills in terms of budgeting, savings, and responsibility of credit usage.
- Financial Planning (30% weight): To assess level of knowledge about financial products, services, and concepts, and ability to plan for long-term financial needs.
- Investment (20% weight): To determine basic understanding of the various risks associated with investment, different investment products and skills required.
A Financial Literacy Index Score for each market was calculated out of the weighted sum of the 3 components.
Regional Aggregates are calculated via the average of the individual country components before applying the weights described above.
Interviews for the MasterCard Worldwide Financial Literacy Index were conducted via internet surveys, personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary.
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