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UAE in top three in ME financial literacy

The UAE ranked among the top three in the Middle East for financial literacy, according to a new report from MasterCard.

The company’s latest Index of Financial Literacy showed that UAE consumers increased their overall financial literacy ranking in the region, going from sixth place in 2010 to third place this year.

In addition, UAE consumers were the most informed in the region when it came to knowledge about investments. The country scored highest in the investment component of the survey at 57 per cent, followed by Qatar (55 per cent) and Lebanon (55 per cent).

“It is encouraging to see that consumers in the UAE are becoming more financially aware and hence able to make responsible financial decisions for themselves and their families. Financial literacy is a key focus area for MasterCard, and we will continue to champion the cause,” said Eyad Al Kourdi, vice-president and country manager for UAE at MasterCard Worldwide.

Consumers in the UAE scored well on the index’s financial planning component at 65 per cent, and were particularly well-prepared when it came to saving regularly and early financial planning. The financial planning scores were followed by basic money management (60 per cent) and investment (57 per cent).

The score for UAE consumers’ investment know-how was the highest in the Middle East, and their score for financial planning (65 per cent) was higher than the Middle East average (64 per cent).

In the investment component of the survey, consumers in the UAE showed good understanding of their financial statements and the suitability of financial products for their needs.

The MasterCard Worldwide Index of Financial Literacy is based on a survey conducted between April 24 and June 10 this year, with 11,376 respondents aged 18-64 in 25 countries. This is the third Financial Literacy survey conducted since 2010.

The study 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.

Middle East

The Middle East’s aggregate financial literacy score decreased slightly from 63 index points in 2010 to 61 in 2012. Consumers in the region scored highest in terms of knowledge about financial planning (64 per cent) followed by basic money management (62 per cent) and investment (54 per cent).

Egypt, with 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 per cent), followed by Saudi Arabia (65 per cent) and Lebanon (61 per cent).

Egypt also ranked first for financial planning (70 per cent), followed by Lebanon (66 per cent) the UAE (65 per cent) and Oman (65 per cent).

— abdulbasit@khaleejtimes.com