FLI

Financial literacy in Bulgaria

In general, research in many countries, including those countries with highly developed financial markets like the U.S., shows that the average consumer’s financial knowledge and skills are relatively low. The situation in our country is not very different. Data from a 2010 World Bank study of financial literacy presents the following picture for Bulgaria:

- Low level of financial literacy - 47% of respondents identify their financial knowledge as poor or none. Particularly disturbing are the data for the group of 16-17- year olds, in which over 53% have identified their financial literacy as weak, namely young people are the corner stone of future active use of financial services and face a long term consumers` prospective.

- Relatively weak skills in planning and managing personal budget - 73% of the people claim to be making a financial plan for their monthly income and expenses. In practice, however, 39% of them say they rather have an overview of their revenues and expenditures and a further 22% just keep their financial documents without monitoring the movement of their funds.

- Inability to cope with the loss of income - It is also a concern how long a period within which the majority of the households could cope with a sharp drop of income. Only 11 percent believe they will be able to withstand more than six months - mostly high-income level citizens of most big cities.

- Poor awareness of consumers` rights and services - Low awareness goes hand in hand with the mistrust of institutions to handle a problem adequately. 39% of people are not convinced that the problem would be resolved quickly, and 40% do not believe the problem be resolved fairly.

- Poor knowledge and sharing of financial information - Bulgarians are less active in seeking information on financial matters and 35% never discuss financial issues with friends and family. For the majority of Bulgarians financial information is too specialized and difficult to understand.