Abstract
The article, based on the latest literary sources and comprehensive factual material, studies and assesses the current level of financial education of the population of Georgia; discusses important components of financial education, financial knowledge, financial behavior, and financial relationships; calculates the generalizing rate of financial education of the population. Based on the submitted answers by the respondents, the report derived financial literacy scores. Financial literacy constitutes the combination of financial knowledge, financial behavior, and financial attitudes. These components were studied separately and scores were assigned to each of them individually. The financial knowledge score takes a value between 0-7 based on the 7 core knowledge questions of the survey; the financial behavior score takes a value between 0-9 based on the responses to 9 behavior questions and statements; lastly, the financial attitude score was calculated using a 5-point scale based on an average of the answers to three attitudinal statements. In this case, respondents assessed their attitudes (i.e. how much they agreed or disagreed with given statements) from 1 point (i.e. fully agreed) to 5 points (fully disagreed). The overall financial literacy score is obtained as the sum of the three individual scores (financial knowledge (7), financial behavior (9), and financial attitudes (5)). Thus, the overall financial literacy score can take a value between 1 to 21 and can also be normalized by multiplying to 100 (100/21). Both scales - i.e. 21-point scale and 100-point scale- are used throughout this document for reporting purposes.
Highlights
In recent years, financial literacy has gained a prominent position in the policy agenda of many countries
The importance of collecting informative reliable data, on the levels of financial literacy across the adult population has been widely recognized (OECD/INFE 2015). This financial literacy research is highly important from the perspective of the National Strategy for Financial Education, which was developed by NBG, with the involvement of different stakeholders, as this exercise helps realistically assess existing levels of financial literacy in the country, define accurate strategic focuses, and measure all progress achieved in the future within the frames of the strategy
As a result of the research, it was found that Financial knowledge is an essential component of financial literacy, as far as having adequate and reliable knowledge allows individuals to compare financial products and make appropriate, well-informed financial decisions
Summary
Financial literacy has gained a prominent position in the policy agenda of many countries. The OECD International Network on Financial Education (OECD/INFE) defines financial literacy as “a combination of financial awareness, knowledge, skills, attitudes, and behaviors, necessary to make proper financial decisions and achieve individual wellbeing”. The importance of collecting informative reliable data, on the levels of financial literacy across the adult population has been widely recognized (OECD/INFE 2015). This financial literacy research is highly important from the perspective of the National Strategy for Financial Education, which was developed by NBG, with the involvement of different stakeholders, as this exercise helps realistically assess existing levels of financial literacy in the country, define accurate strategic focuses, and measure all progress achieved in the future within the frames of the strategy. The data, collected within the frames of this financial literacy research helps assess existing levels of financial literacy in the country, shows which groups of the population are the most in need of financial education, demonstrates the gaps in the provision of financial education, serves as a baseline and helps set benchmarks for the overall National Strategy for Financial Education, as well as for individual programs
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