Low financial literacy level among Indonesian youths
26 October 2022
Spire Consultant, Bella Vista Siallagan throws light on the surprisingly low level of financial literacy among the youth of Indonesia.
Indonesia is promoting its financial literacy programmes as part of its efforts toward becoming a strong high-income industrialised country. Its literacy index is at 38.03%, according to the Financial Services Authority 2019 survey. Negative impact of poor financial literacy includes poor financial planning, lack of objectives to manage finances and improper placement of investment instruments.
Generation Z and Millennials make up 27.94% and 25.87% of Indonesia’s population, respectively. A survey showed that 80% of youths do not record budgets and only 16% have an emergency fund. It is also reported that the younger generation only saves 10.7% of their monthly income, spending more than half of it on monthly needs.
However, Gen Z and the Millennials are more tech-savvy. With the presence of financial technology (fintech) in Indonesia, it is important to boost their financial literacy to help them achieve good financial health.
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