Logo of Phnom Penh Post newspaper Phnom Penh Post - Financial literacy far below par, study finds

Financial literacy far below par, study finds

A man uses an Acleda Bank ATM.
A man uses an Acleda Bank ATM. Hong Menea

Financial literacy far below par, study finds

Financial literacy in Cambodia continues to chalk up low rankings, although the level of understanding of financial products available is largely in line with expectations based on the Kingdom’s current GDP, according to a new study.

The Asian Development Bank Institute (ADBI) said in a report released yesterday that it conducted surveys in Cambodia and Vietnam to measure financial literacy across various segments of the population, differentiating the results by age group, income level and education.

Cambodia received a total score of 11.5 out of a possible 21, while Vietnam scored 12, according to the report, much lower than the average from surveys conducted in 30 Organisation for Economic Cooperation and Development (OECD) member countries.

“These scores are much lower than the 30-country average score of 13.3 and those of some other developing Asian economies such as Thailand (12.8) and Malaysia (12.3),” the report said. “However, these results may be taken as being neutral to positive, given that the levels of per capita income in those two countries are considerably lower than those in any of the other 30 countries in OECD.”

Only 17 percent of Cambodians could answer five out of seven questions on financial knowledge in the survey correctly, which is considered a baseline for financial literacy, the report showed. This is compared to 26.6 percent in Vietnam and 56 percent for the 30 OECD countries.

“In both countries, younger and higher-income respondents have higher financial knowledge scores,” it said. “While there is no difference in financial knowledge between rural residents and urban residents in Cambodia, there is a significant gap between the two groups in Vietnam.”

The report also shows that education plays an important role in financial literacy, and in Cambodia respondents with a tertiary education scored higher than respondents who only completed secondary or primary education. The different levels of financial understanding have a significant impact of savings behaviour of individuals, it added.

“With regards to savings behaviour, only 11.5 percent of Cambodian respondents reported having savings products, while the figure is 23.4 percent in Vietnam,” the report said.

According to figures in the report, only 16 percent of respondents in Cambodia do not save in any form, while 71.5 percent save through informal channels.

MOST VIEWED

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the

  • Defence Ministry denies weapons in smuggling case came from Cambodia

    After a Thai national was arrested last week for allegedly smuggling guns from Cambodia to Thailand, Cambodia's Defence Ministry has claimed the weapons seized during the arrest are not used in Cambodia, despite the fact that both types of rifle seized are commonly found in

  • Shipwreck found off coast of Koh Kong

    Royal Cambodian Navy researchers are working to identify a decades-old shipwreck found earlier this month off the coast of Koh Kong province. Divers found the 70-metre-long wreck on April 4 about a mile from Koh Chhlam island, according to Navy officials. Deputy Navy Commander Tea Sokha,