5th September 2015

Competitiveness: Financial literacy in Czech Republic. Sufficient or low?


Financial experts say that while Czechs are creative and ready to take on the responsibility of running their own business poor financial planning often gets them into trouble. They are unable to create financial reserves and often take out several loans with no clear idea of how they are going to be repaid. Up to 75 percent of loan applicants are aged under 30, Radio Prague say in their article released mid-August. According to data from the Labour and Social Affairs Ministry many graduates who are unable to find jobs take out loans and set up small businesses, only to see them go bankrupt in a relatively short time. The age of people who file for insolvency has dropped from an average 35 to 28 years. Read the article here.

Some analysts argue that the current level of financial literacy in the Czech Republic reaches average levels and has been increasing, compared with the past. Many surveys are based on filling out of questionnaires focused on financial terminology and the ability to calculate suitable loan level. Such questionnaires do not take into account that financial literacy comprises also natural or acquired attitudes and behavior of an individual leading to the right decisions on financial matters (i.e. leading to reasonable indebtedness and overall financial welfare}. In this sense, Czechs do not lag behind other nations. The increasing popularity of small banks in the Czech Republic is an indicator of ever greater financial literacy of the nation, for example. Read more.

Members of the American Chamber of Commerce in the Czech Republic