Seychelles' financial survey: Access to services good, more education needed
File Photo: A Customer of Barclays Bank Seychelles -- one of the island nation's commercial banks withdraws money from an ATM machine. (Joe Laurence,Seychelles News Agency)
(Seychelles News Agency) - The majority of people in Seychelles know about financial products and services and have access to them, but are not knowledgeable about how to use and evaluate these services, the island nation's first financial literacy survey shows.
The findings of the baseline survey were presented Friday in Victoria, the Seychelles capital, by Abel Motsomi of FinMark Trust, an independent organisation based in South Africa, which carried out the survey along with the Central Bank of Seychelles (CBS) and the local Financial Services Authority.
The objective of the study which was recommended as part of the Financial Sector Development Implementation Plan was to measure and provide credible benchmarks on financial literacy and capability.
Beggita Vital, the Payment Systems officer at CBS, said 562 interviews were conducted on Mahe, Praslin and La Digue, the three most populated islands in Seychelles, an archipelago in the western Indian Ocean.
Vital said the study showed that 94 percent of the participants have transacted with a bank and most knew about financial products and services available and had access to them. Participants, however, were not necessarily knowledgeable about how to evaluate and use these services.
“We found that people were not reading Terms and Conditions that come with a product or service but were quick to sign, showing that they were not aware of the contracts they were signing,” Vital said.
“Another common complaint that we receive at CBS by customers is that they were not aware that as guarantor of a loan, they are responsible to repay the loan in the event of a default by the borrower and this also came out of the study,” she added.
Other findings show that 94 percent of the people interviewed had transacted with a bank, and 87 percent wanted to improve their financial situation while 46 percent did not have a plan of what to do.
On the need for financial information, 38 percent felt they wanted to know more including how to save, invest and budget. While 83 percent of the people interviewed knew how much they earned or received, only 14 percent kept track of how much they lend.
The survey also provides information on the Seychellois adult population, on their financial perceptions, attitudes and behaviours, the obstacles they face and the factors that would have an influence on their financial situations.
Vital said the results of the study will be used to develop a national strategy for financial education in Seychelles.
“There is definitely a need to carry out financial education, and with these results, we will be targeting specific demographic groups.”
Another issue that came out is the need for a strategy to encourage people to keep track of their income flow and how they spend it.
Speaking at the opening of the presentation, the Governor of the Central Bank of Seychelles Caroline Abel said the findings will be used by key stakeholders such as policy-makers, regulators, and financial service providers to identify gaps and design appropriate responses.
Abel said the results “reflect how the public is making financial decisions vis-a-vis saving, borrowing, budgeting, spending and planning for their financial future in general.”
Abel added that financial education matters at all levels, primarily from a social welfare point of view.
“It matters in terms of the ability of people to manage their financial affairs prudently and live within their means.”