Financial Literacy in Jamaica
Jamaica Scores 33% in Financial Literacy
In a report called Financial Literacy Around The World which was undertaken by Standard & Poor’s with representatives from the World Bank, it indicated that Jamaica is ranked 29 out of the 47 scores assigned to 142 countries in regards to simple financial literacy. Only 33% of Jamaicans surveyed indicated that they had knowledge of basic financial principles which places Jamaica lower than average in the 42nd percentile of countries surveyed. Denmark, Norway and Sweden ranked the highest, with 71% of adults demonstrating that they were financially literate while at the lower end, Yemen, Albania and Afghanistan indicating that only 13-14% of adults understood these terms.
The graph below shoes some countries on the high end, low end and middle of the survey results. The full graph can be seen at the end of this article.
The study asked questions on four basic topics, risk diversification, inflation, numeracy (interest) and compound interest. Take the financial literacy test here and then see the answers are at the end of this article.
The financial literacy score was examined in comparison to the country’s GDP and not surprisingly, the results showed a 72% correlation between a country’s financial literacy score and the score that measures the country’s average living standards and economic well-being. This simply means that the countries that perform well economically, tend to have higher rates of financial literacy and that makes sense (but remember correlation does not necessarily mean causation). The graph below indicates the Financial Literacy Score on the x-axis and the average GDP per Capita for all the countries that attained that score on the Y-axis.
So what does this mean? We have some work to do in improving understanding of basic financial principles. How well did you score in the financial literacy test? Search for the hashtag #FinanceTwitterJa on Twitter to enhance your financial literacy and follow me at @MsGillyJ to learn more about Financial Products and Services.
In terms of general literacy, Jamaica is ranked 121 out of 197 countries with a 88% literacy rate. https://www.worldatlas.com/articles/the-highest-literacy-rates-in-the-world.html
The answers for the test are: 1. Multiple businesses or investments, 2. the same, 3. 100 US dollars plus three percent, 4. More and 5. More than 150 dollars.