By Zaya Williams
The Organisation of Eastern Caribbean States’ Commission and the Central Bank have conducted a survey that revealed concerning levels of financial illiteracy within the Eastern Caribbean Currency Union (ECCU).
The survey gathered responses from 7,000 participants across the eight member states and highlighted a critical need for enhanced financial education.
The survey results revealed that 61 percent did not understand essential financial practices such as saving, budgeting, investing, and borrowing.
ECCB Governor Timothy Antoine expressed deep concern over these results, describing them as “lamentably low” and emphasizing the urgency of addressing this issue.
Governor Antoine cited alarming examples of financial illiteracy, such as individuals falling victim to scams promising prizes for contests in which they were never registered.
Additionally, some respondents engage in higher purchases without understanding the effective interest rates, which can soar as high as 35 percent. The proliferation of payday loans, characterized as attempting to “ride up on a down escalator,” was another disturbing trend.
Moreover, the survey revealed that more than two in five people, or their households, lack the financial resilience to cope with and recover from adverse financial shocks.
Many indicated that they would need to borrow from financial institutions or seek assistance from family or friends to meet significant expenses.
The ECCU still relies heavily on cash transactions, highlighting the need for increased financial literacy in modern banking practices. Governor Antoine stressed that a significant portion of the population lacks economic practicality.
He pointed out that only four percent of ECCU residents are invested in regional and international capital markets, while some are taking high-risk investments in cryptocurrencies.
This financial imbalance underscores the importance of equipping individuals with the knowledge and skills necessary for informed financial decision-making.
Overall, the survey’s financial literacy scores indicate room for improvement across all aspects of financial literacy, encompassing economic attitudes, knowledge, and behaviors.
Financial literacy promotes economic well-being and financial stability within the Eastern Caribbean Currency Union.