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International Personal Finance Financial Inclusion and Wellbeing Report

International Personal Finance Financial Inclusion and Wellbeing Report. Wave 4 Results October – December 2013. 1. Background & Method 2. Economic Outlook 3. Financial Holdings 4. Use of Credit Services 5. Standard of Living 6. Further Research. Contents. Background & Method.

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International Personal Finance Financial Inclusion and Wellbeing Report

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  1. International Personal FinanceFinancial Inclusion and Wellbeing Report Wave 4 Results October – December 2013

  2. 1. Background & Method 2. Economic Outlook 3. Financial Holdings 4. Use of Credit Services 5. Standard of Living 6. Further Research Contents

  3. Background & Method

  4. Background • IPF currently provides consumer credit to 2.5 million customers, across six international markets. The business offering is unique for the markets in which IPF operates. • This project is designed to engage with IPF’s customer base, understand the issues they have and their feelings towards the society in which they live, and how they can be better represented in the political and commercial worlds. • IPF wishes to use this research to enhance its unique position as a mouthpiece for the lower socio-economic demographic amongst key groups of decision-makers. • This was the fourth wave to be run using the IPF panel and 11,472 individuals completed the survey this time. • Please note that any reference in commentary to ‘Czechs’ or ‘Hungarians’ specifically relates to IPF customers in those markets and not the population of the country as a whole Background & Method

  5. Method YES Take survey now Registration survey Invitation from IPF to register for the panel NO Take survey later Reminder to take survey No response Email invitation from YouGov to take Wave 4 Wave 2 survey Complete now Mexico & Poland only Happy to take survey Call from IPF inviting customer to take part in Computer Assisted Telephone Interview (CATI) Refused to take part IPF customers not previously invited IPF existing panellists IPF customers without email addresses Background & Method

  6. Provident Communities Background & Method

  7. Provident Communities For wave 4 as with wave 3, we have continued to use the same the weighting process so that the data contained in this report is reflective of IPF’s customer book1. IPF customer book is the split by country of the customer database2. Market-level weighting shows the weighting used in the individual country tables3. Overall-level weighting are the weights used in the overall tables to emphasise the importance of each group in the customer book as a whole Background & Method

  8. Economic Outlook

  9. Concerns over loss of employment and neighbourhood crime have fallen significantly in the past six months • The flipside is an increase in the proportion of people concerned over the rise in education costs • More people are reporting that they have no concerns Which of these is of most concern to you currently? Base: April 2013 (9,960) | November 2013 (11,472) Economic Outlook

  10. Czechs are less concerned about job losses than they have been previously • This fall is significant among 18-24 year-olds, with a drop of eight percentage points • Cost of living concerns remain the same overall, although they are now driven more by women than men Which of these is of most concern to you currently? Base: All in Czech Republic April (1,796) Nov (3,887) Economic Outlook

  11. Very little has changed in the concerns of Hungarians in the past six months • 18-24 year-olds are significantly less concerned with the cost of living than they have been previously • Men have become more confident in the security of their jobs • The cost of education has become slightly more of a concern, but still sits at only 4% of Hungarians Which of these is of most concern to you currently? Base: All in Hungary April (4,835) Nov (3,457) Economic Outlook

  12. There has been a significant drop in the concerns of Mexicans over the levels of crime in their neighbourhoods • This is complemented by a six-fold increase in those who have no concerns • However, despite falls elsewhere, concern over the cost of living remains unchanged at a quarter of respondents Which of these is of most concern to you currently? Base: All in Mexico April (542) Nov (478) Economic Outlook

  13. Poles have become less concerned over the cost of living and job security over the past six months • However, this outlook on job security is only reflected in the attitudes of those aged 18-34; among older people it continues to rise • The older generation are also noticeably concerned about the continued rise in health service costs Which of these is of most concern to you currently? Base: All in Poland April (915) Nov (1,794) Economic Outlook

  14. The past six months has seen very little change in the concerns of Romanians • A slight rise in concern over the cost of living is most apparent among those aged 18-34 • Concern over job losses and the cost of education have both dropped slightly suggesting a general economic improvement Which of these is of most concern to you currently? Base: All in Romania April (1,478) Nov (837) Economic Outlook

  15. IPF customers in Slovakia report that they have fewer concerns than they felt six months ago • This is reflected in fewer worrying about the cost of living • There has been an increase among men in concern over job security while the exact opposite trend is apparent amongst female respondents Which of these is of most concern to you currently? Base: All in Slovakia April (394) Nov (1,019) Economic Outlook

  16. Increases in the cost of food, particularly in Czech Rep and Hungary, is the most apparent driver in the cost-of-living increase • Cost of utilities remains the second most-cited item although significantly fewer people report this when compared with six months ago • Healthcare and education costs are two items pushing the cost of living higher according to IPF customers Which of the following would you say is most responsible for the increase in the cost of living? Please select one answer only. Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Economic Outlook

  17. Confidence in the ability of the economy to improve over the next 12 months has risen since April 2013 • This pattern, most evident in Hungary and Poland, is reflective of all Eastern European markets • Romania remains the market where people have the most positive outlook, with a third expecting improvement • Mexicans expect a slight deterioration in the country’s economy in the next 12 months Thinking of the next twelve months, do you expect the economy in your country to get better or worse? Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Economic Outlook

  18. The past six months has seen a small movement in the level of positivity of IPF customers regarding their household finances • Increased earnings and changed personal circumstances remain the two most cited drivers of improvement in household economic situation • However, there are increased levels of uncertainty when compared with six months ago Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change? Base: All Apr’13 (9,960); Better (3,126); Worse (2,448) | Nov’13 (11,472); Better (4,589); Worse (2,065) Economic Outlook

  19. Fewer Czechs and Hungarians feel that their household economic situation will worsen compared to six months ago • Mexicans are significantly less likely to claim that increased wages are the driver of improved household financial situation Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change? Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Economic Outlook

  20. Trust in the financial sector is higher in Mexico than other IPF markets • In Eastern Europe, Slovakians are most likely to trust their financial sector, with Hungarians the least trusting • Perhaps reflecting the fact that cynicism increases with age, 18-24 year-olds are most trusting of the financial sector No confidence Full confidence How much do you trust the financial sector? Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Economic Outlook

  21. Household economic situation summary There is increased concern in the rise of education costs since April 2013 Compared to previous results, fewer people are concerned about job losses and neighbourhood crime Foodand utilities remain most cited drivers of cost of living increases, with healthcaremore prominent than previously found IPF customers are more positive about the economic outlook than six months ago Mexicans are more trusting in their financial sector than any of the European nations Economic Outlook

  22. Financial Holdings

  23. As found previously, just over half of IPF customers hold a bank account, although there has been a small drop in savings account ownership • There has also been a slight fall in credit card ownership in the past six months • Ownership of other financial products has not moved more than one percentage point Which of these products do you have? Choose as many as apply. Base: All Apr’13 (9,960) | Nov’13 (11,472) Financial Holdings

  24. Fewer Czechs have plans in place for retirement than we saw six months ago • However, there has been a rise in the proportion of individuals holding a bank account • Czech Rep has also seen a slight fall in those who have buildings insurance Which of these products do you have? Choose as many as apply. Base: All Czech Rep Apr’13 (1,796) | Nov’13 (3,887) Financial Holdings

  25. A quarter of Hungarians have a credit card, significantly fewer than we saw in April 2013 • Bank account ownership remains at three in four Hungarians, higher than almost all other markets • Ownership of life insurance is significantly higher among men (27%) than women (23%) Which of these products do you have? Choose as many as apply. Base: All Hungary Apr’13 (4,835) | Nov’13 (3,457) Financial Holdings

  26. Ownership of ASU insurance in Mexico has increased by five percentage points since April 2013 • Bank account ownership has risen slightly but remains very low compared to Europe • Retirement planning is the financial product most owned by Mexicans Which of these products do you have? Choose as many as apply. Base: All Mexico Apr’13 (542) | Nov’13 (478) Financial Holdings

  27. Poland has seen a fall in the level of ownership of both bank accounts and credit cards • Ownership of personal insurances (life, ASU) is significantly higher among men than women • Retirement plans are held by the same proportion of over 55s as those aged 35-44 Which of these products do you have? Choose as many as apply. Base: All Poland Apr’13 (915) | Nov’13 (1,794) Financial Holdings

  28. Bank account ownership in Romania has significantly increased in the period from April to October 2013 • However, credit card ownership has also risen in that time • Life insurance is owned by a quarter of men (24%) compared to only 17% of women Which of these products do you have? Choose as many as apply. Base: All Romania Apr’13 (1,478) | Nov’13 (837) Financial Holdings

  29. Slovakia has seen falls in ownership of a number of products • Ownership of most products is higher among men than women except savings accounts, where twice as many women have them • The proportion of credit card holders increases with age Which of these products do you have? Choose as many as apply. Base: All Slovakia Apr’13 (394) | Nov’13 (1,019) Financial Holdings

  30. Financial Holdings summary BANK As found previously, just over half of IPF customers hold a bank account 1234 1234 1234 1234 Mr Smith Credit card and savings account ownership has fallen slightly since April 2013 The proportion of Romanians and Mexicans with retirement plans in place has improved since we last asked ASU insurance is the only product(s) which has seen an increase in ownership levels over the past six months

  31. Use of Credit Services

  32. IPF customers are more confident now that they could borrow money from a mainstream bank or lender than they were six months ago • This trend is most reflected in Mexico and Poland, although Hungary is experiencing a reversal with more saying it would be impossible • Slovakians are the group most confident that they could attain credit, although less so than April 2013 How easy do you think it would be for you to borrow [local currency] from a mainstream bank or lender? Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Use of Credit Services

  33. More individuals state that they would not be prepared to take a loan when compared with April 2013 • Preparedness to take a loan has increased for only one reason (purchase of clothes/shoes) and this is only marginal • All other items (except unexpected costs) have seen a fall Would you consider taking a loan for the following? Choose as many as apply. Base: All Apr’13 (9,960) | Nov’13 (11,472) Use of Credit Services

  34. Czechs are significantly less likely to take a loan for healthcare reasons than previously • Women are noticeably more prepared to take loans for unexpected costs or household appliances • Somewhat surprisingly, likelihood of taking loans for healthcare decrease with age Would you consider taking a loan for the following? Choose as many as apply. Base: All Czech Rep Apr’13 (1,796) | Nov’13 (3,887) Use of Credit Services

  35. There has been a significant increase in Hungarians’ preparedness to take out loans to subsidise education costs • This particularly applies to those aged 18-24 (16%) compared to all other age groups • Hungarians have increased their willingness to take loans for unexpected costs Would you consider taking a loan for the following? Choose as many as apply. Base: All Hungary Apr’13 (4,835) | Nov’13 (3,457) Use of Credit Services

  36. Mexico has seen a 100% increase in the proportion of individuals unprepared to take a loan for any of the listed items • The result of this is a significant decrease for almost all items • Mexican men are significantly more likely than their female counterparts to take a loan for unexpected costs Would you consider taking a loan for the following? Choose as many as apply. Base: All Mexico Apr’13 (542) | Nov’13 (478) Use of Credit Services

  37. Overall, very little has changed among Poles in terms of what they are prepared to take a loan to pay for • Polish women are significantly more likely to take loans to pay for housing costs • Men prefer the idea of taking loans in order to pay for electrical devices (non-household appliances) Would you consider taking a loan for the following? Choose as many as apply. Base: All Poland Apr’13 (915) | Nov’13 (1,794) Use of Credit Services

  38. Romanian IPF customers maintain the attitudes towards loans, and what they will use them for, that they first displayed in April 2013 • Women are significantly more likely than men to take loans for housing and healthcare costs • General preparedness to take a loan for these items decreases with age Would you consider taking a loan for the following? Choose as many as apply. Base: All Apr’13 (1,478) | Nov’13 (837) Use of Credit Services

  39. Compared to six months ago, significantly fewer Slovakians are prepared to take loans for household appliances and entertainment • In a reversal of trends seen in other markets, younger respondents are more likely to claim a blanket ban on taking out loans Would you consider taking a loan for the following? Choose as many as apply. Base: All Apr’13 (394) | Nov’13 (1,019) Use of Credit Services

  40. A smaller proportion of individuals agree that they think carefully before borrowing in comparison with six months ago • This is in tandem with an increase in people prepared to use credit on impulse • More people are looking to borrow as much as the lender will give them Please indicate whether you agree of disagree with each of the following statements… Base: All (11,472) Use of Credit Services

  41. Czech Rep has seen a positive movement of respondents being able to afford credit repayments and never borrowing too much • They also state that fewer people are using credit regularly as part of their budget management • Men are significantly more likely to be able to afford their credit repayments Please indicate whether you agree of disagree with each of the following statements… Base: All Czech Rep (3,887) Use of Credit Services

  42. A higher proportion of Hungarians agree that they can comfortably afford their credit repayments when compared with previous findings • Women are more likely to use credit only in emergencies while men are more impulsive • Using credit as part of budget management increases with age Please indicate whether you agree of disagree with each of the following statements… Base: All Hungary (3,457) Use of Credit Services

  43. Evidence points to Mexicans moving towards less responsible borrowing • There is more impulsive borrowing and less concern over being able to afford repayments • 18-24s are particularly likely to borrow without checking they can afford to pay it back Please indicate whether you agree of disagree with each of the following statements… Base: All Mexico (478) Use of Credit Services

  44. Results in Poland very much reflect those found six months ago, with nine in ten thinking carefully before borrowing • Women are more likely to use credit in an emergency, while men claim to use it as a regular means of supplementing their budget Please indicate whether you agree of disagree with each of the following statements… Base: All Poland (1,794) Use of Credit Services

  45. There has been very little movement in attitudes toward credit in Romania, with the vast majority only using credit in an emergency • Women are significantly more likely to borrow as much as a lender will give them Please indicate whether you agree of disagree with each of the following statements… Base: All Romania (837) Use of Credit Services

  46. There has not been much change in the Slovakian attitude towards use of credit in the past six months • Men and 18-24s are the groups most likely to use credit impulsively • Older people are less confident in their ability to afford their repayments Please indicate whether you agree of disagree with each of the following statements… Base: All Slovakia (1,019) Use of Credit Services

  47. The size of repayment and whether they could afford it were the two key concerns for IPF customers before deciding to take credit • Hungarians were most concerned about whether they really needed the money, suggesting the credit was perhaps non-essential What factors did you consider when deciding to take out credit? Choose as many as apply. Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Use of Credit Services

  48. Use of credit services summary There is increased confidence among IPF customers that they would be able to borrow from a bank/mainstream lender now Despite this, fewer want to take a loan now than they did in April 2013 Only purchasing clothes and shoes has increased as a motivation for taking a loan Size of repayment and ability to afford it are the key considerations before taking a loan More people are prepared to use credit on impulse than was found previously, with fewerputting thoughtinto whether they should borrow

  49. Standard of Living

  50. Fewer IPF customers are spending as cautiously as six months ago, with the majority of those now spending about the same as usual • Older respondents are likely to be more cautious spenders than their younger compatriots • Cautious spending is significantly higher among Hungarians than other nationalities Thinking about day-to-day spending over the last twelve months, which of the following would apply to how you have approached spending in current economic conditions? Base: All Nov’13 (11,472), CZ (3,887), HU (3,457), MX (478), PL (1,794), RO (837), SK (1,019) Standard of Living

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