Chileans are ‘financially illiterate’

Isabel Cocker/The Santiago Times Staff

SANTIAGO – The chief superintendent of Banks and Financial Institutes says Chileans are “financially illiterate”.

This October marks the fourth annual “Month of Financial Education” held by the Superintendence for Banks and Financial Institutions (SBIF). This is a period used by the SBIF to encourage businesses around Chile to hold seminars and other events aimed at educating fellow Chileans on themes such as responsible borrowing and saving.

Many of the sessions, which are held by more than 30 public and private partner institutions, are aimed at children and young people. According to the PISA Study of Financial Education, performed by the OCDE, Chile has a financial literacy rating of 432 points, below the global average of 486 points.

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In an interview with Emol, Eric Parrado, the Chief Superintendent of SBIF, highlighted that “if we were to be marked on our level of financial education, we Chileans would fail”, remarking that “on average, Chileans are financially illiterate”.

When asked what constitutes someone who is financially literate, he stated: “someone who has a high level of financial education has the capacity of using to their own advantage the benefits which the financial system offers, and to take financial risks with the certainty of being able to overcome them”.

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He underlined that financial education should start as early as possible, as 98% of Chileans above the age of 15 use at least one financial product, such as a bank account. He believes that education should be everyone’s concern, emphasizing that “the public and private sectors have the responsibility to give clear and understandable information, and individuals have the responsibility to inform themselves and therefore make a better use of financial systems”.

According to recent figures released by the OCDE, only 29% of Chileans have a basic understanding of inflation, which is far below the OCDE average of 66%. This is mirrored in the level of Chileans capable of calculating interest based on a simple interest rate, which at 19% was also exceeded greatly by the OCDE average of 58%.