Results of the financial literacy survey in the Republic of Croatia

Published: 4/2/2016

The Croatian National Bank and the Croatian Financial Services Supervisory Agency presented on 4 February 2016 the results of the financial literacy survey in the Republic of Croatia.  This measuring was conducted by Ipsos d.o.o., a survey agency, using the methodology of the Organization for Economic Co-operation and Development (OECD) and its findings are comparable with the results of the same survey conducted in other countries. The average score of financial literacy of Croatian citizens was 11.7 points of the total of 21 points.

The survey "Measuring Financial Literacy" was conducted jointly by Hanfa and the CNB in cooperation with the Ministry of Finance of the Republic of Croatia, the coordinating body for all activities in the area of financial activity in our country, based on the 2015 Action Plan for Improving Consumer Financial Literacy. The survey was conducted using the method of personal, face-to-face interviews and included respondents in the age group 18 to 79 years. The representative sample comprised over 1 000 respondents. 

OECD defines financial literacy as a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing. The survey thus focussed on three key categories: financial condition, financial behaviour and attitude towards spending money. The measuring has also shown the results of financial literacy achieved by different social groups (age, gender, education) in all parts of Croatia.   

While the average financial literacy score in Croatia stands at 11.7 points, of the maximum 21, the lowest scoring group was the age group below 19 years of age (9.3) and the highest scoring group was the group with higher and high education (12.8) and the citizens with household income greater than HRK 6 250 (12.8) and those from towns with a population exceeding 100 000 (13.1). 

The majority of Croatian citizens are acquainted with the effects of inflation

As regards financial knowledge, 74 percent of citizens are acquainted with the effect of inflation on their lives and realise that high inflation means fast growth of living expenses.  Over two-thirds of the respondents (69 percent) are acquainted with the high risks associated with high potential earnings. Two-thirds of citizens are aware of the benefits of prudent distribution of investment and savings to protect themselves from risks and realise that it is less likely that they will lose money if they invest and save in several different places. 
Also, 80 percent of the respondents understand the task which requires comprehension of the concept of interest on a loan. 

Croatians are generally financially responsible and risk-averse; education is essential for the young and citizens with lower income and poorer education. 

Over 60 percent of the Croatian citizens cautiously manage their financial transactions, costs, financial purchases and timely settlement of bills and debts.  However, while such caution means that Croatians are not too risk-prone when it comes to their money, thus avoiding the "negative risks", it also suggests that they are not willing to take the "positive risks" such as investments, which are avoided even by citizens in the higher-income group.

Poor correlation between financial knowledge and financial behaviour shows that Croatian citizens, though relatively aware of the benefits of a financially responsible behaviour and how to achieve it, do not always implement such knowledge in everyday life, so it would be desirable to ensure that all education has a positive impact on financial behaviour in real life. 

The results of the survey suggest that citizens in the lower income group and those with lower education levels have a much poorer understanding of key economic and financial terms. They tend to manage their household budgets less frequently, are less certain of their pension plans, and have knowledge of fewer financial products and use such financial products less frequently. 

The results of the survey are comparable to other countries and can serve as a basis for the assessment of education projects.

The measuring of financial literacy in the Republic of Croatia was conducted in the context of the second international cycle of national surveys coordinated by the OECD. The questionnaire which serves as a toolkit was drafted in 2009 and used for the first time in 2010, during a coordinated measurement in 14 countries.  Since then, 30 more countries used it to collect data on financial literacy of its citizens. As the Republic of Croatia joined in the new cycle of implementation of the survey on the international level, the results of this survey will also enable a comparison of the national level of literacy of the citizens of the Republic of Croatia with survey results in other countries.  This comprehensive measuring of financial literacy in our country will also provide a good foundation for the assessment of success of future education projects. 

Petar-Pierre Matek, President of the Board of the Croatian Financial Services Supervisory Agency stated, on the occasion of presentation of the results of measuring financial literacy in the Republic of Croatia: "Rational attitude towards money and the possession of the knowledge necessary to make decisions on the use of goods and services are important for each of us, while adequate and satisfactory level of financial literacy is also important in a broader social context."  

The Governor of the Croatian National Bank, Boris Vujčić, concluded, on the occasion of presentation of the results of measuring financial literacy in the Republic of Croatia: "I believe that this survey gives us a very clear picture of the financial literacy in our country and that its results will serve as a good starting point for further joint learning of all involved about the priorities of this type of education as well as for systematic formulation of educational programmes for the promotion of financial literacy of the consumers."

The entire presentation of the survey on financial literacy in Croatia can be viewed here