Knowledge of Investments Sets UAE Consumers Ahead of the Pack

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Dubai, UAE, 24 September 2012MasterCard (http://newsroom.mastercard.com/) has announced the results of its latest Index of Financial Literacy, which reveals that consumers in the United Arab Emirates (UAE) have become more financially savvy over time. According to the study, UAE consumers increased their overall financial literacy ranking in the Middle East from 6th place in 2010 to 3rd place in 2012. In addition, UAE consumers were the most informed in the Middle East when it came to knowledge about investments.

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.

UAE consumers ranked 3rd in the Middle East with a score of 61 index points in the MasterCard Index of Financial Literacy. Consumers in the Emirates scored well on the Index’s financial planning component (65%), 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%) and investment (57%). In fact, the UAE consumers’ score for investment know-how was the highest in the Middle East, and their score for financial planning (65%) was higher than the Middle East average (64%). 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.

“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 with initiatives like the  It’s My Business program that we have launched with INJAZ Al-Arab to train Arab youth in work readiness, financial literacy and entrepreneurship,” said Eyad Al-Kourdi, vice president and country manager, UAE, MasterCard Worldwide.

Middle East highlights:

  • The Middle East’s aggregate financial literacy score decreased slightly from 63 index points in 2010 to 61index 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 the UAE, men achieved marginally higher scores than women (63 vs. 59).
  • 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 (61index 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%).

MasterCard Worldwide Index of Financial Literacy – Highlights

Ranking

Scores

Overall Financial Literacy Index

Components of Financial Literacy Index

Basic Money Management

Financial Planning

Investment

Middle East

61

62

64

54

1

Egypt

69

75

70

54

2

Saudi Arabia

62

65

64

54

3

UAE

61

60

65

57

4

Lebanon

61

61

66

55

5

Oman

59

59

65

51

6

Kuwait

58

57

63

51

7.

Qatar

56

55

57

55

 

Methodology

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.

About MasterCard Worldwide

MasterCard (NYSE: MA), www.mastercard.com, is a global payments and technology company. It operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews,  join the conversation on Cashless Conversations Blog and subscribe for the latest news.

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 Contacts:

Jandre Nieuwoudt, GolinHarris – Dubai, +971 50 248 3351; jnieuwoudt@golinharris.com

Nadia Ejaz, GolinHarris – Dubai, +971 4 3323305; nejaz@golinharris.com