Financial Education, Financial Inclusion and National Strategies MIFI and National Strategies Edufin Summit 2017, 15-16 June 2017, México D.F.
Outline 1. Mapping financial education, financial inclusion and national strategies 2. The Multidimensional Index of 3. Measuring the interaction of financial literacy, national strategies and financial inclusion 4. Key messages
Mapping financial education, national strategies and financial inclusion National Strategies Financial Education Regulatory framework Technology Economic development * * Barriers Income, Lack of Trust, Geographic complexities, documentary requirements Use Access
Outline 1. Mapping financial education, financial inclusion and national strategies 2. The Multidimensional Index of 3. Measuring the interaction of financial literacy, national strategies and financial inclusion 4. Key messages
The Multidimensional Index of MIFI 2016 98 97 10 5 11 9 72 77 122 10 71 6 43 62 81 36 57 68 88 4 76 31 70 56 MIFI ranking 1-30 31-60 61-90 91-122 https://www.bbvaresearch.com/wp-content/uploads/2016/05/180516-mifi-ing.pdf
Outline 1. Mapping financial education, financial inclusion and national strategies 2. The Multidimensional Index of 3. Measuring the interaction of financial literacy, national strategies and financial inclusion 4. Key messages
The key role of National Strategies for Financial Education and National Strategies Financial Education Regulatory framework Technology Economic development * * Barriers Income, Lack of Trust, Geographic complexities, documentary requirements Use Access *
Financial education as the basis for improving financial inclusion 60000 0,8 50000 and GDP United States 0,7 and Financial Education Index Israel Australia GDP 40000 30000 20000 Turkey Greece Chile Australia Austria South Korea Spain Israel Financial edcuation Index * 0,6 0,5 0,4 0,3 Iraq United States Austria Spain Greece South Africa ChileMongolia Kenya Brazil Colombia South Korea Peru Turkey 10000 Iraq Brazil South Africa Colombia Mongolia Peru El Salvador 0,2 0,1 El Salvador Bangladesh Kenya Bangladesh 0 0 20 40 60 80 100 0 0 20 40 60 80 100 * Lusardi and Mitchell (2014)
The key role of National Strategies for Financial Literacy Status of National Strategies (NS) in 2015 Relationship between NS and Financial Literacy: Positive relationship 0,60 0,55 Financial Literacy 0,50 0,40 0,30 0,20 mean = 0.36 0,43 0,34 0,36 0,32 0,10 0,00 A NS is being revised or second NS is being implemented A (first) NS is being implemented A NS is being actively designed A NS is Being planned No NS Financial Literacy Global Mean Source: OECD (2016), Klapper, Lusardi and Oudheusden (2014), Lusardi and Mitchell (2014) 9
The key role of National Strategies for Financial Literacy in different geographical areas Status of National Strategies (NS) in 2015 Relationship between NS and Financial Literacy by continent: Positive relationship Africa America Asia Europe Oceania A NS is being revised or second NS is being implemented A (first) NS is being implemented A NS is being actively designed 0.57 0.40 0.58 0.63 0.33 0.52 0.33 0.51 0.37 0.32 0.29 0.39 A NS is Being planned 0.41 0.25 0.38 No NS 0.32 0.27 0.26 0.39 Source: OECD (2016), Klapper, Lusardi and Oudheusden (2014), Lusardi and Mitchell (2014) 10
The key role of National Strategies for Status of National Strategies (NS) in 2015 Relationship between NS and MIFI: Positive relationship 90,0 80,0 70,0 77,5 67,5 60,0 50,0 40,0 30,0 20,0 mean = 49.2 47,2 44,3 39,5 10,0 0,0 A NS is being revised or second NS is being implemented A (first) NS is being implemented A NS is being actively designed A NS is Being planned No NS 2014 Global Mean Source: OECD (2016) and BBVA Research 11
The key role of National Strategies for Financial Inclusion in different geographical areas Status of National Strategies (NS) in 2015 Relationship between NS and MIFI by continent: Positive relationship Africa America Asia Europe Oceania A NS is being revised or second NS is being implemented 83.5 71.4 74.7 87.5 A (first) NS is being implemented A NS is being actively designed 41.5 93.2 58.3 75.6 25.1 50.4 49.1 65.0 A NS is Being planned 27.8 19.1 58.2 No NS 27.3 41.9 39.4 57.9 Source: OECD (2016) and BBVA Research 12
The key role of National Strategies for Nature of Financial Education Mandates Actors, legislation and MIFI: Positive relationship 90,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 mean = 49.2 60,5 48,8 81,2 48,3 70,2 47,7 61,1 48,1 10,0 0,0 Yes No Yes No Yes No Yes No Explicit enshrined in the institution's founding act Implied form other responsibilities Through primary legislation Through secondary legislation Global Mean Source: OECD (2016) and BBVA Research 13
The key role of National Strategies for Financial Literacy Nature of Financial Education Mandates Actors, legislation and Financial Literacy: Positive relationship Financial Literacy 0,600 0,500 0,400 0,300 0,200 mean = 0.361 0,438 0,358 0,407 0,360 0,493 0,352 0,369 0,360 0,100 0,000 Yes No Yes No Yes No Yes No Explicit enshrined in the institution's founding act Implied form other responsibilities Through primary legislation Through secondary legislation Financial Literacy Global Mean Source: OECD (2016), Klapper, Lusardi and Oudheusden (2014), Lusardi and Mitchell (2014) 14
Outline 1. Mapping financial education, financial inclusion and national strategies 2. The Multidimensional Index of 3. Measuring the interaction of financial literacy, national strategies and financial inclusion 4. Key messages
Key messages The importance of spurring financial literacy to overcome the barriers that limit financial inclusion. Financial literacy and financial inclusion should be supported by national strategies. The clearer the implementation path of a national strategy, the higher the impact on financial inclusion and financial literacy. The clearer the mandate of a national strategy, the higher the impact on financial inclusion and financial literacy. 16
Financial Education, Financial Inclusion and National Strategies MIFI and National Strategies Edufin Summit 2017, 15-16 June 2017, México D.F.