“Even the most advanced Belarusians in terms of financial literacy prefer to keep their money in cash. This is an abnormal situation, which reflects the level of people’s distrust of the banking system, ”notes the trend in the banking market, Evgeny Krasnyansky, managing director of the marketing company SATIO. Especially for Pro Business, the expert commented on the main findings of the study on the savings behavior of Belarusians.
– To analyze the saving behavior of Belarusians in April 2021, we interviewed 977 people about their attitude to savings. The sample structure corresponds to the structure of the urban population of Belarus between the ages of 20 and 64 by gender, age and region.
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The survey revealed that 73% of Belarusians try to make savings in some form, more often in a relatively simple and liquid form – cash or a bank card.
A third of Belarusians adhere to an “effective strategy of spending,” that is, they first save money and spend the rest. Another third are implementing the strategy of “residual savings”, saving money after all the necessary expenses. And the remaining Belarusians spend everything they earn.
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Interestingly, young people tend to save more often, although it is logical that their incomes are lower. Perhaps this is due to the fact that young people simply have nothing to spend their money on. And when a person grows up and starts a family, he has new items of expenditure. Loans for a car / apartment, spending on children often leave no room for saving.
This is how the portrait of a “saving Belarusian” looks today:
- Lives in the capital or in a medium or large city
- Age – 20-24 years
- He has a higher level of education.
How Belarusians prefer to save money
The choice of a specific type of savings is associated with its liquidity. In the context of Belarus, it is expected that cash and non-cash money remain the most popular methods. 45% of the respondents strive to maintain their income in cash; this option is in the lead by a large margin.
Other relatively common ways of storing savings are rubles on a card (28%) and in cash (25%), as well as currency on a card (14%). Foreign currency (14%) and ruble deposits (10%) are significantly inferior to the options described above.
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For Belarusians, the concepts of “profitability of a way of keeping savings” and “safety of a way of keeping savings” are often synonymous. At the same time, the real behavior of people may not be related to their own perception of the usefulness / safety of the instrument. We see that Belarusians still save money in rubles, although they do not consider this to be the safest and most profitable option.
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The best (most profitable and safe) ways of saving Belarusians today consider cash currency, residential real estate and jewelry, but the last two categories are not so popular due to their high cost.
The study also showed that Belarusians practically do not invest in commercial real estate, securities, cryptocurrencies and do not play in the foreign exchange markets.
And businesses and startups are perceived today as one of the most unprofitable and unsafe ways of saving.
In principle, investments in business / startups cannot and should not be popular. Otherwise, it is a sign of an unhealthy situation, an impending “bubble”. Relatively speaking, when a lot of people start thinking: “Hmm, shouldn’t I invest in stocks? Should I invest in a startup? Should I buy bitcoins? ”, This is really bad. In any market, there shouldn’t be many people who are attracted to unconventional financial instruments.
Another question: how much is a lot? Interest in business investment at the level of 2% – is this a normal situation or unfavorable from the point of view of domestic investment in the economy? We did not find similar foreign studies on comparable countries, so it is difficult to draw conclusions.
“Banking skeptics” and “supporters of the classics”
Depending on the attitude to various ways of saving, one can single out “supporters of the classics” – those who are more loyal to saving in deposits, cash and on a bank card, as well as “bank skeptics” – those who are ready to invest in cryptocurrency, real estate, jewelry , art objects. The ratio turned out as follows: in Belarus, 61% are supporters of the classics and 39% are bank skeptics.
Hypothetically, the predominance of supporters of the classics in Belarus is associated with the general level of financial literacy: many were unable to assess one way or another of savings, that is, they have no opinion about individual instruments. It is especially interesting that banking skeptics assess business and start-up as a way of saving worse, but they are a little more likely to be engaged in by classic supporters.
At the same time, the main way of saving for both those and others is cash. On the whole, skeptics are more inclined towards currency, while supporters of the classics are more inclined towards rubles. Also, skeptics are more willing to buy jewelry and invest in residential real estate.
Even the most advanced Belarusians keep currency in cash
We have analyzed the connection between the savings behavior of Belarusians and socio-demographic characteristics. It turned out that women have a better attitude towards savings in rubles and residential real estate, while men – towards cryptocurrency, jewelry and art objects. Older residents are closer to investing in residential real estate, and younger residents are closer to commercial real estate.
Significant differences are found in people with low and high levels of education. Residents of Belarus with a secondary general education more often than others find it attractive to keep cash rubles, rubles on a card and purchase securities.
But within the framework of this study, the opinion of Minskers and people with high incomes turned out to be especially interesting: it was expected that they would be supportive of various financial instruments, but in reality this is not the case. Such Belarusians are the best in assessing cash as a saving tool.
The situation when financially literate people keep their savings in the form of cash is not typical.
I would even say that this is an abnormal situation. Usually, this behavior is typical for the least financially literate part of the population, because cash is the wrong way to save, such savings do not bring additional income.
The interest of the most advanced Belarusians in currency, and in cash, is an indicator of distrust in our banking system and state guarantees.
What business can do in this situation
The study showed that banking instruments are perceived by Belarusians today, to put it mildly, not very adequately. It is logical to assume that with the normalization of the situation in Belarus (economic / political), the money that Belarusians now keep in cash will be drawn into the economy. And due to deferred demand, we can expect rapid growth. In what form and when the situation will return to normal, this is an open question.
But already now, it seems to me, there is potential for growth in the financial sector. If financial market players are able to convince people that this or that way of investing money is profitable and safe, there can be great prospects in this direction. The main thing worth fighting for is the level of people’s trust.
Also, in the current situation, a business can win, which will offer Belarusians the opportunity to invest money abroad – in real estate, securities or any other financial instrument that is not traditional and is not associated with investments within the country. Unfortunately, this money will not work for our economy, but at least it will not be hidden “under the mattress”.