The importance of financial education for the industry and its consumers

Russell JohnsenManaging DirectorProvident Financial Romania

Agenda

� Sustainability @ Provident Financial Romania

� Financial education programmes in Romania

� Highlights of the latest national survey on

Romanians’ financial literacy level

�

Sustainability @ Provident Romania

Simple and transparent

marketing materialsAll details explained

Personal, friendly and flexible

financial services

Easy to understand 4-page transparent

loan agreement

Re

spo

nsib

le le

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ing

Main financial education programme

Stages of Bugetul Familiei programme

� Launch of www.bugetulfamiliei.ro

� Let’s talk about money guide

Stages of Bugetul Familiei programme

� National strategy for financial education

Stages of Bugetul Familiei programme

� The launch of www.totuldespredae.ro

Stages of Bugetul Familiei programme

The level of Romanians’financial literacy

Study on Romanians’ financial literacy

∗ conducted by: Novel Research

∗ sample size: 1023 respondents

∗ sample type: stratified, random sample

∗ coverage: Romania – national (urban & rural)

∗ weighting: by gender & age groups

∗ data gathering: CATI (computer assisted telephone interviews)

∗ fieldwork: November 1st – November 12th

Self evaluation of financial literacyfinancial management

Expenditure track

base: 1023 (all respondents)

financial management

Expenditure trackfinancial management

Attitude towards payment issuesfinancial management

base: 1023 (all respondents)

financial management

Attitude towards payment issues

Actions generated by different attitude towards payment issues

financial management

base: 1023 (all respondents)

Consumer perception about its rights and responsibilities

loan market knowledge assessment

base: 1023 (all respondents)

mean scores/Top 2 boxes (1 to 5 points scale

where 1=not agree at all; 5=fully agree)

base: 1023 (all respondents)

loan market knowledge assessment

differentiation analysis differentiation analysis differentiation analysis differentiation analysis (bars gap (bars gap (bars gap (bars gap >5 means >5 means >5 means >5 means ““““will will will will

happenhappenhappenhappen””””, , , , bars gap<bars gap<bars gap<bars gap<----5 means 5 means 5 means 5 means ““““will not happenwill not happenwill not happenwill not happen””””

Consumer perception about its rights and responsibilities

Reasons to take a personal loanLoan market knowledge assessment

base: 1023 (all respondents)

base: 1023 (all respondents)

Preferred currencypreference and understanding

base: 1023 (all respondents)

preference and understanding

Type of interest preferred

base: 1023 (all respondents)

preference and understanding

What does variable interest mean?

What does APR mean?preference and understanding

base: 1023 (all respondents)

APR understandingpreference and understanding

Conclusions

� Perception is sometimes not in line with reality

� Never make assumption about consumers’understanding of financial services – Explain!

� Demographic categories need tailor made financial education programmes

� Simple is better!

� Get involved!

Thank you!

Russell JohnsenManaging DirectorProvident Financial Romania