KUALA LUMPUR, (Oct 20): Almost 70% of Malaysians are in need of financial literacy support, according to a recent survey by newly-launched financial literacy platform Multiply.
Multiply was established by private equity firm Creador, through its not-for-profit arm Creador Foundation, to address these gaps in financial literacy.
In a statement today, Creador Foundation said the survey attracted 3,333 responses, of which 21% were ranked as Finance Newbies — those who didn’t know the basics of personal finance, whilst another 48% were ranked as Finance Cadets — those who had just started to grasp the basics of personal finance.
According to the survey, only 31% were considered a Money Boss — someone who understood basic financial concepts well.
Budgeting and savings were cited as areas where they needed most help.
41% of respondents said they could not manage their monthly salaries and constantly worried about having enough to sustain themselves until their next paycheck, while 6% relied on credit cards to make up their monthly shortfalls. 48% said they had no emergency savings.
Multiply said 2020 has turned out to be an extraordinarily challenging year in terms of personal finance, adding that it was not surprising that many Malaysians are concerned about their financial position.
“However, we were happy to see from the results of our survey that it is not all doom and gloom.
“A healthy 53% of respondents plan their budgets in advance, 31% have basic insurance in the event of a vehicle accident, and 52% have some form of savings for rainy days,”it said.
The survey did however highlight that Malaysians have a ways to go in understanding how to use different financial tools and instruments.
It said 32% of the respondents said they preferred to leave their available funds in a simple savings account, rather than explore higher returns through investments.
Multiply said without having a good grasp of how to make money work, those with some funds tend to take the safer and less rewarding route of simply leaving it in a savings account, despite the fact that interest rates are at an all-time low.
“This tells us that knowledge about how to make money work — through funds, investments and other financial tools, is rudimentary, at best.
"We are here to steer Malaysians through these challenges and help them emerge on stronger financial footing. It’s not just about surviving; it’s about achieving real financial freedom,” it said.