Study: financial situation of Dominican citizens is one of survival and vulnerability

The First Financial Health Study in the Dominican Republic 2021 showed that 8.9 million Dominicans have a survival or vulnerability financial situation.

In addition, there are 30% within that percentage, equivalent to 3.1 million Dominican households, whose situation is financially vulnerable. This means that this segment does not achieve a minimally acceptable level of financial health in some or all of the eight variables considered in the study.

The document released by Caudall, a platform made up of a team of market leaders, which seeks to transform the way people relate to money radically, explains that the study results show that the Financial Health Index is 54 points on a 100 point basis. According to the methodology, this indicates that, in general terms, Dominicans have survival finances.

People’s financial health promotes economic growth, facilitates the channeling of resources from savings to investment, protects households against the materialization of crises, contributes to reducing poverty and inequality, and is a crucial element when generating a path of sustained prosperity.

It is detailed that only 15% of Dominicans manage to achieve finances that are considered healthy, with a score of 80 points or more. This means that, of the country’s total population, three million live in a situation of financial vulnerability, and 5.8 million are surviving from day to day. Only 1.7 million have a healthy financial position.

The document highlights that, by sex, women are in a more vulnerable situation in financial terms than men. For example, 33.53% of women are vulnerable, 55.26% receive income just to survive, and only 11.21% are healthy financially.

In the case of men, 25.60% are in a financially vulnerable situation, 55.42% are surviving, and only 18.97% have a healthy financial position.

The study presented by Caudall also looks at financial health by age. The report states that the older the individual is, the better economic situation they have. For example, 36% of people over 60 have a healthy financial condition. In contrast, 20% of citizens between 18 and 49 have a healthy financial situation. Those of 18 years are below 14%.

The financial health of the study participants is analyzed on four pillars: spending, saving, debt, and planning. Regarding expenses, 36.73% of those consulted indicate that the expenses they make are more significant than the income, 36.03% that the expenses were less than the income, and 27.24% the expenses are more or less equal to the income obtained. In addition, 50.86% pay all their commitments on time, and 49.14% do not meet their obligations on time.

For 38.51% of Dominicans, their savings are only enough to last less than three weeks, covering their ordinary expenses in case their income is affected.

Likewise, 22.47% can last six months or more with their savings, 20.63% would last from one to two months, and 18.39% have enough savings to cover their ordinary expenses for three to five months.

But, in addition, 51.03% of those surveyed are not sure of having enough long-term savings. The opposite shows 48.97%, which indicates that they feel confident.

The study authors are Juan Carlos Saladín, José Medina, Raúl Ovalle, Jonathan Valle, Mónica Báez, Evelín Cáceres, Carlos Santana, Grace D’Oleo, Xavier Bergés, and Santiago Sicard. They recommended that the public and private educational system include financial education from an early age, understanding that good general education levels are not enough if the basic concepts of personal finance are not adequately trained and explained.

In addition, promoting more direct and far-reaching actions by companies in the financial sector in terms of the financial education of their clients.