Financial education, the key to improve the Colombian economy

In order to evaluate knowledge, skills, attitudes, and behaviors of citizens with respect to financial issues, CAF, Development Bank of Latin America, carried out the "Survey to Measure Financial Capacities in Andean Countries: Colombia, Bolivia, Ecuador, and Peru". 

The results focused on household economy, financial products, behaviors toward money, and evaluation of knowledge, make it possible to have a wider perspective of the situation in the region, allowing for the design of national financial education strategies en each country.  

L. Victor Traverso, CAF's Director Representative in Colombia, stated, "For CAF, financial education is essential for inclusion, as it not only facilitates the effective use of financial products, but also helps people to develop skills to compare and select the best products to meet their needs, and empowers them to exercise their rights and responsibilities". 

In the case of Colombia, although citizens are aware of the need to save, they do not do so. According to the study, 39 percent of the surveyed population stated that they had not saved during the past year, and among those who did, 37 percent said they did it at home, in a piggy bank or "under the mattress". 

With respect to financial products, 43 percent of those interviewed do not have any financial product (savings account, credit card, moneylender, payroll loan, home loan, and micro credit, among others), which shows the existence of a gap between the supply of products and the needs of the population, as most of those interviewed stated that they had some knowledge about some of those products. 

The study also indicated that 67 percent of the surveyed Colombian population stated that in the past 12 months, their incomes were not enough to cover their expenses. A similar situation is reported in Bolivia, Ecuador and Peru.

In general, in the four countries the survey showed that there are fewer financial capacities for those people with limited education, those who are inactive or unemployed, residing in rural areas, or from low socio-economic sectors. 

One of the most important challenges for the region is the creation of financial inclusion policies that help reduce the gender, geographic, educational, and income gaps, which help people gain access to the financial system, thus improving the wellbeing and competitiveness of the population. 

The total number of people surveyed in the four countries reached 4,871, including men and women from all the socio-economic groups, with a 2.8 percent margin of error.  

The results were presented in the Luis Angel Arango Library, with the participation of Carlos Gustavo Cano, Co-Director of the Banco de la Republica, Victor Traverso, CAF's Director Representative in Colombia, and a panel of experts who debated the subject.