Although a large majority of Poles think their financial literacy is average or good, in reality many of them have gaps in knowledge relating to even basic concepts such as inflation, a new study has found.
The report, commissioned by KRD, which runs Poland’s largest debt registry, consisted of a survey asking Poles to assess their own financial literacy and then to answer six practical questions relating to the subject.
One question what it means if inflation stood at 10% in March and then 9% in April. A majority of 60% wrongly answered that it means a fall in prices, with 54% saying it represented a 1% fall from the previous month and 6% believing it meant a 10% fall.
Only 25% of respondents answered correctly that it means a 10% slowdown in price increases.
Meanwhile, only half of respondents (51%) were able to correctly identify that the word “creditor” means a person or institution that is owed money.
Over a quarter (28%) confused a creditor with a debtor, i.e. the person or institution that owed money, and one in ten believed that a creditor was a person or institution that collected debts.
“The results of the survey do not inspire optimism,” said Adam Lacki, president of KRD’s management board. “The plethora of wrong answers and the data from our debtor register, which has more than 2 million people on it, show that there is still a lot of work to be done here.”
However, 73% did correctly answer a question asking participants to calculate the total amount due on a 2,000 zloty loan where a 10% commission fee is charged.
Likewise, 68% correctly identified annual percentage rate as being the total cost of a loan or credit expressed as an annual percentage rate including interest, fees, commissions and other costs.
According to the survey, 58% of Poles rate their financial literacy as average, 17% as high and 4% as very high. Only 18% of respondents believe that their financial knowledge is low and only 3% that it is very low.
Jakub Borowski, chief economist at Credit Agricole Bank Polska, notes that research by the Financial Supervision Authority (KNF), a state body, also indicates that Poles have a limited understanding of the financial world.
“Research by the KNF shows that 80% of people who invest in currencies on the forex market make a loss. And supposedly we know that investing in forex market carries great risk, yet many people choose to do so,” he said, quoted by the Rzeczpospolita daily.
Meanwhile, Malgorzata Starczewska-Krzysztoszek, an economist at the University of Warsaw, points out that despite wide access to economic knowledge, many Poles fall prey to scams such as financial pyramids.
“Although the media constantly educates, very little sticks,” she told Rzeczpospolita. (Notes from Poland)