According to the RinggitPlus Malaysian Financial Literacy Survey 2019 (RMFLS 2019), in partnership with Visa, finds that many Malaysians are not managing their finances well.
Close to 70 percent of Malaysians indicated that they are in control of their finances, but an alarming 53 percent of respondents admit they are not able to survive more than three months with their savings and about 43 percent of Malaysians spend exactly what they earn or more.
“Our annual survey plays a critical role in providing us with insights to drive our mission for the nation – saving Malaysia one wallet at a time. With these findings, we are switching gears to place even greater importance on our battle to proliferate the nation’s financial literacy. The strong support from Visa this year has enabled us to tap into a wider audience pool, making our survey results more representative of our population,” said Liew Ooi Hann, Chief Executive Officer (CEO) of RinggitPlus.
“It is time for Malaysians to take action and we hope this year’s results act as a wake-up call. The lack of awareness on personal finance is an ongoing challenge for us all. What’s more alarming to us is that people are in denial of their financial reality. Another insight we learned is that some Malaysians, while knowing the importance of financial management, do not take active measures. For example, we found that 34 percent of the respondents who believe their Employees Provident Fund (EPF) savings is not enough for retirement do not have a retirement plan to compensate for that,” Hann added.
The RMFLS 2019 received over 8,000 responses from people across the country, from which stratified sampling was conducted to achieve a more representative sample of the Malaysian population.
“We are pleased to partner with RinggitPlus to conduct this survey as part of our key efforts in promoting financial literacy in Malaysia. At Visa, improving lives and economies around the world is core to our business,” said Ng Kong Boon, Visa Country Manager for Malaysia.
We have identified the gaps that we need to address and this is important to us, as we strive to create financial education programmes and content that we can share with Malaysians to increase their awareness and knowledge,” added Kong Boon.
Survey key findings:
- 31 percent of Malaysians admit that they are not in control of their finances, and 43 percent spend exactly or more than they earn monthly.
- 37 percent of those who earn less than RM2,000 do not save at all.
- 53 percent of them can survive less than 3 months with their savings, and 20 percent of respondents can survive less than a month.
- 89 percent of respondents say that EPF savings is not sufficient for retirement, and despite this, 34 percent of respondents do not have a retirement plan.
- Only 32 percent of respondents are aware of what a credit score is and the need to check it regularly.
The recent launch of the National Strategy for Financial Literacy 2019-2023 highlights the urgent need to address financial illiteracy in the country.