The Alternative Financial Services Association of North Macedonia
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Research of the Fintech Industry and Financial Literacy

The Association of Financial Companies of North Macedonia for the first time collected industry statistics and surveyed public opinion on the level of financial literacy

There is a great need for financial inclusion in the country, the level of financial literacy is worrying

Organized by the Association of Financial Societies of Northern Macedonia, a survey of public opinion on financial literacy was presented in November.

Download the survey here >>>

Non-banking financial companies are the “youngest” segment of the financial sector in North Macedonia, which, although growing rapidly, still has a small share in both the total assets of the financial system and the total loan portfolio. Last year, the share in total assets was 0.44%, which is a significant increase compared to 2017 when it was 0.37%, or 0.19% in 2016. Traditional financial institutions still play a dominant role in the financial market, where the banking sector is responsible for 82.6% of the financial system’s assets, although its share tends to slow down (83.0% in 2017 and 84.7% in 2016). The percentage of population in the country serviced by non-banking financial companies last year was 6%, and the amount that was usually borrowed averaged 200 to 400 euros. So far, the volume of loans approved by financial companies is not significant in the total debt of households and the corporate sector.

When it comes to household income and savings habits, research shows that there is a great need for financial inclusion, because according to the results, 12% of respondents do not have enough money even for food, and 57% can afford to meet the needs of maximum food and clothing, but that they do not have enough funds to buy household appliances, such as TV, refrigerator, etc. Also, 44% of respondents indicated that they were unable to save because they had no money left to save, while 35% of respondents said that with their savings they could live for about a month. Although a large part of the population does not have the funds, research shows that a small part of them use the available financial services, but at the same time, do not have information about the opportunities offered to them, evidenced by the results that only 6% took a loan from a non-banking financial company in the past 12 months and a high 52% did not use any of the financial services offered by them in the past 3 years.

All this proves that there is a need for financial resources, and the Fintech industry needs a real reason – to provide the necessary funds, with the best customer care in a fast, simple and easy way, without additional security, precisely in the necessary, small amounts for situations that require quick fixes, such as home repairs, electrical repairs or the purchase of goods.

However, in order for citizens to understand and know which service to use, additional efforts are needed to improve the financial literacy of the society, because, as the research states, it is necessary to further improve the financial literacy of the population. This is indicated by the fact that 59% of the respondents assess their financial literacy as weak or average, and 36% do not pay attention to their financial literacy and need additional information. Financial education is also necessary when it comes to using the services offered by non-banking financial companies, mainly due to the possibilities for financial inclusion of the population with limited access to the services of traditional financial institutions, evident through the analysis.

The Association of Financial Companies of North Macedonia, of which some financial companies are members, unites financial technology, known as Fintech. The mission of the Association is to create a secure and responsible industry and practice while explaining to the general public the diverse opportunities that alternative financial services can offer for the development of individuals and society as a whole. Hence, in order to advance the industry in the Macedonian financial market, the Association of Financial Companies of North Macedonia is taking the initiative to obtain reliable information from authorized researchers in order to create responsible development, such as this research. The Association’s plans are to conduct this type of research annually in order to monitor the dynamics of the industry and to place transparent and relevant information about society and stakeholders, as well as to encourage topics that are important to the industry as a whole. which will be positioned as a relevant source of information.

The reliability of the research process conducted by the Team Institute was confirmed and approved by an independent audit company – BDO Audit, which in accordance with the international audit standard ISAE 3000, issued a certificate that the contractor used the appropriate tools, procedures and methods of the sample for the implementation of the research, in full compliance with the applicable rules and procedures.