Financial literacy in Malaysia, 2015–2018

This paper provides an overview of the state of financial literacy of Malaysiansusing data from the OECD (INFE) Financial Literacy Survey conducted in the year2015 and 2018. Besides the three components of financial literacy, namely, financialknowledge, financial attitude and financial behaviour, this paper also analyses thefinancial vulnerability of individuals. The effects of socio-demographic factors excludinggender are significant in determining financial literacy levels. Generally, Malaysiansdo not think that they have high financial knowledge, and the objective financialknowledge assessment reflects this as less than 40% of the respondents meet theminimum financial knowledge target score. There are no significant differences in thelevel of financial knowledge between 2015 and 2018 but financial attitude towardsmoney usage has worsened in 2018 when compared to 2015. However, in terms offinancial behaviour, Malaysians are generally active savers, set long-term financialgoals, make considered and informed purchases, and keep a close watch on theirpersonal affairs. Malaysians are financially vulnerable, but they seem more prepared inweathering the storm and having financial cushions for emergencies in 2018 comparedto 2015. The findings suggest that more effort is needed in educating Malaysians onfundamental financial concepts and ways to enhance their financial cushion