Measuring Financial Capability : A New Instrument and Results from Low- and Middle-Income Countries

Kempson, Elaine ; Perotti, Valeria ; Scott, Kinnon

World Bank, Washington, DC

关键词: financial capability;    access to finance;    risk management;    informality;    financial inclusion;   

RP-ID  :  79806

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

In 2008 the Ministry of Finance of theRussian Federation established a Trust Fund to beadministered by the World Bank with the goal of advancingfinancial capability in low-and middle-income countries.This report documents the multiyear effort to developmeasures of financial capability and summarizes the findingsof this project. The generous funding of the Russia TrustFund (RTF) allowed for the application of a very rigorousresearch-based process of defining the concept of financialcapability and developing data collection survey methods andanalytical procedures to measure the level and distributionof financial capability within low- and middle-incomecountries. This involved the active participation of WorldBank staff, expert consultants, country-based teams,government officials, and researchers from 12 middle andlow-income countries. Financial capability, the capacity tomanage financial resources and use financial services in away that best suits individual needs and the prevalentsocial and economic conditions, can contribute significantlyto both the level and efficacy of financial inclusion. Themultistep process used to develop tools to measure financialcapability in low and middle-income countries entailed: 1)development of an operational definition of financialcapability through identification of its key manifestations;2) development and cognitive testing of survey questions tomeasure the manifestations; 3) data collection; 4)identification of the key components and domains offinancial capability; and 5) identification of potentialtarget groups for policy interventions. The goal of theWorld Bank's RTF financial capability survey is tocapture information on the manifestations of financialcapability through individuals' behavior, skills, andattitudes related to managing the finances for which theyare responsible. Because it focuses on behaviors andactions, the survey instrument cannot be used to assess thefinancial capability of people who neither manage their ownfinances nor participate in household financial decisions.Finally, populations of individual countries can besegmented into groups with varying levels of capabilityacross all components. The strengths and weaknesses of thesegroups can be determined-as can their characteristics. Thesegroups can be as fine-tuned as is required to informapproaches to increasing levels of financial capability.