Financial capability survey in Armenia
- Sector:Financial capability
- Services: Public surveys
Since 2007, the Central Bank of the RA created Consumer protection and market behavior department to improve financial services consumer protection through implementing important legal, administrative and institutional measures. Thus, a package of laws has been adopted by the Parliament and numerous by-laws on transparency, code of conduct, interest rate calculations, process of examination of customer’s complaints, communication, etc. In early 2009, the Office of Financial Mediator was founded. A wide range of activities and projects have been implemented for financial education.
The Survey objective was to establish a nationally representative baseline of financial capabilities in Armenia that would provide the Government of Armenia with the information required to design financial education programs that will address the most important needs of the population.
The Survey implementation was supported by Russia Financial Literacy and Education Trust Fund (FLIT).
The Survey was conducted among 2,000 citizens of Armenia through face to face interviews. The Survey covers Yerevan and all regions, urban and rural population. The quantitative research method was chosen for the implementation of the Survey that was conducted among households (HH). For the partisipation in the Survey was chosen that member of the HH, who was 18 and more years old, take part in decision making of their HH's money, financial and expenses issues and is fully or partially responsible for his own expenses. Respondent’s selection among them was made via application of the Kish Table.
The survey addressed such HH descriptions as management of current expenses, planning of future expenses (expected and unexpected), use of financial services.
The remarkable results of financial skills research in Armenia are as follows:
- There are difficulties with planning of expenses among rural population (35% of the society) due to seasonal inadequacy of getting income and doing expenses.
- Among rural population there are also gaps in management of expenses due to mix of activities and household incomes and expenses. For most farms farming is the only source of income for the household. Significant part of these households cannot separate profit from revenue.
- About 50% of the respondents save money but the significant part of people keep their savings out of banks. There may be a number of reasons for this: a) these people do not have experience and culture of using bank services, b) these people do not trust banks, c) these people are not aware of alternatives of managing their savings.
- 34% of the respondents make decisions about using any financial products before examining their alternatives.
- The respondent's behavior in conflict resolution with financial institutions cannot be considered as rational. People generally are not aware of the ways of solving conflicts with the financial institutions. This may come from absence of conflict management culture.
- 37% of the respondents do not have any idea of how they are going to cover their and their HHs' expenses in older age. This group of respondents is unable or does not know how to plan for long periods. They do not have confidence that the pension system would provide sufficient pension for well-living.