Financial culture: the French are on average among OECD countries

As noted in the past, the financial culture of the French remains on average for the OECD countries under consideration, and small and very small businesses are slightly higher than in the general public. There is still room for improvement …

On December 13, 2021, the Banque de France published a survey * on the financial culture of the general population. A similar survey, based on an OECD questionnaire, was conducted in eleven other countries: Germany, Austria, Colombia, South Korea, Estonia, Hungary, Italy, Poland, Portugal, the Czech Republic and Slovenia. Based on OECD indicators that measure the level of financial knowledge, financial attitudes and behavior of the general public, the survey concludes that the French have a financial culture that is average among the OECD countries surveyed.

Another study ** was conducted to assess the financial culture of entrepreneurs (micro, small and medium enterprises). The results show that the financial culture of these entrepreneurs is higher than the general public.

OECD financial competence
“Financial competence”, according to the OECD, consists of three components: 1 / financial knowledge, including theoretical knowledge, 2 / attitude, which depends mainly on personality and individual preferences, and 3 / behavior that translates into financial decisions and choices. . It is on the basis of this notion of “financial competence” that international studies developed by the OECD determine the final assessments, which are developed on the basis of three sub-bases measuring the three components mentioned above.

* Survey conducted from June 18 to July 9, 2021 among 2,150 French adults (2,000 online and 150 by phone) based on a survey created by the OECD
** A survey conducted in April 2001 among 1,002 entrepreneurs working in companies with less than 50 employees, also based on a questionnaire compiled by the OECD.

The financial culture of the general public is assessed as 13/21 in France: this is the average among the OECD countries surveyed

According to the survey, the French receive an overall score of 13 out of 21 for the level of their financial culture. This is the average of the twelve OECD countries surveyed. Slovenia leads with a score of 14.7 out of 21, Italy is in the background with a score of 11.1 out of 21. If we go into the details of the calculations, we notice that for financial knowledge: the French get a score of 4.6 out of 7, for financial attitude for money they get a score of 3 out of 5, and finally for financial behavior – 5.4 out of 9.

According to the Banque de France, these ratings show that the French are “quite diligent and thoughtful”, pay their bills on time (83%) and closely monitor their financial situation (71%). On the other hand, the French would build several long-term financial strategies and their theoretical knowledge show gaps: almost 70% believe that their knowledge of financial issues is medium or low (this estimate is an improvement compared to the previous survey in 2018) (77%): thus, the impact of inflation on savings is poorly assessed: for 1,000 euros that they will be able to buy in a year at 2% inflation, 27% say they will be able to buy at least as much, and 17% do not know.

According to French categories, this is also shown by the poll women are less financially literate than men. In any case, they are more modest: 15% of them believe that they know financial issues well, compared to 28% of men. 27% know the level of Livret A against 35% among men. As for young people (18-34 years old), 35% of them believe that they are well versed in financial matters, even if the youngest (18-24 years old) also give the most incorrect answers. People aged 18-34 are generally most interested in financial news and financial topics (49% of 18-24 year olds, 45% of 25-34 year olds, compared to 42% of the general population). Only older people over the age of 65 do it well (49%), according to the Banque de France.

Entrepreneurs with less than 50 employees have higher results than the general public

With an overall score of 12 out of 17 (or almost 15 out of 21), small business managers have a financial culture that is above the average public.

They have financial knowledge is considered “correct” Bank of France with a score of 3.7 out of 5, which exceeds their own self-esteem. They have a good understanding of inflation, risk-return, dividends, and so on. But many gaps remain, for example, the understanding of equity, investment … Although they regularly turn to their bank, they have “Moderately smart” financial sentiment : they are primarily “instinctive”, and few of them make detailed financial plans or set long-term goals. On the other hand, with a score of 6.4 out of 9, these entrepreneurs accept “Healthy and thoughtful” behavior : 95% clearly distinguish between personal and professional accounts, 73% expect, for example, to finance their retirement.

The Banque de France notes that there is room for improvement

In general, according to the Banque de France, there is room for improvement.

For the general public, the Banque de France notes that 41% of French people do not have enough “reliable and neutral” information to effectively manage their budgets, and that 80% call for financial education at school.

As for the entrepreneurs on whom the second study is focused, it finds a correlation between the size of the company and the level of financial culture of entrepreneurs. For the Banque de France, this observation justifies priority action on the “fifth pillar” of the national strategy for economic, budgetary and financial education, of which it has been the national operator since 2016.