1. International Personal Finance Financial Inclusion and Wellbeing Report Wave 3 Results April-May 2013

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

3. Background & Method 1

4.  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 third wave to be run using the IPF panel  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 Background & Method

5. Mexico only Method  The process was adjusted for this wave in order to invite new registrants as well as the existing panel Invitation from IPF to register for the panel Registration survey YES Take survey now YES Take survey now NO Take survey later NO Take survey later Reminder to take survey No response Complete now Wave 2 survey Email invitation from YouGov to take Wave 3 Call from IPF inviting customer to take part in Computer Assisted Telephone Interview (CATI) Happy to take survey Refused to take part IPF customers not previously invitedIPF existing panellistsIPF customers without email addresses Background & Method

6. Provident Communities Czech Republic Online completes 1,796 Hungary Online completes 4,835 Mexico Online completes 337 CATI completes 205 Slovakia Online completes 394 Romania Online completes 1,478 Poland Online completes 915 Background & Method

7. Weighting For wave 3, we have formalised the weighting process so that the data contained in this report is reflective of IPF’s customer book 1. IPF customer book is the split by country of the customer database 2. Market-level weighting shows the weighting used in the individual country tables 3. 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 IPF Customer Book Czech RepHungaryMexicoPolandRomaniaSlovakia % of customer book10.5%10.0%28.0%35.0%10.9%5.6% Market-level weighting Male46.6%42.2%32.4%43.5%44.8%44.1% Female53.4%57.8%67.6%56.5%55.2%55.9% 18-2413.7%6.4%15.7%12.9%5.4%12.6% 25-3423.3%18.3%28.1%21.2% 23.2% 35-4423.3%24.3%27.3%20.5%29.3%23.1% 45-5418.2%20.2%18.7%20.8%19.1%20.1% 55+21.5%30.8%10.1%24.6%25.1%21.1% Overall-level weighting Czech RepHungaryMexicoPolandRomaniaSlovakia Male4.9%4.2%9.1%15.2%4.9%2.5% Female5.6%5.8%18.9%19.8%6.0%3.1% 18-241.4%0.6%4.4%4.5%0.6%0.7% 25-342.4%1.8%7.9%7.4%2.3%1.3% 35-442.4% 7.6%7.2%3.2%1.3% 45-541.9%2.0%5.2%7.3%2.1%1.1% 55+2.3%3.1%2.8%8.6%2.7%1.2% Background & Method

8. Economic Outlook 2

9. Cost of living is of most concern to half of IPF customers Which of these is of most concern to you currently? Base: All (9,960) Unemployment and crime are other elements that worry people Concern over the cost of living increases with age from 38% of 18-24 year-olds to 59% of those 55+ Economic Outlook

10. A third of people cite increases in food prices as most responsible for the rise in the cost of living A significant group of others, particularly in Romania, believe that the rise in utility prices is the main cause Women are significantly more likely than men to blame the rise on the increase of food costs (36% vs. 29% of men) One in ten IPF customers blames increased transport costs 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 (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Economic Outlook

11. Two in three Czechs are most concerned about the cost of living Which of these is of most concern to you currently? Base: All in Czech Republic (1,796) Czechs in late teens/early 20s are those most concerned about losing their job 5% of men claim to have no concerns compared to just 2% of women Economic Outlook

12. 80% of Hungarians are concerned over the cost of living, the highest of all markets Which of these is of most concern to you currently? Base: All in Hungary (4,835) Contrasting to the IPF customer book as a whole, concern over the cost of living decreases with age Loss of jobs and cost of health services are of very little concern comparatively Economic Outlook

13. Mexico, out of trend with IPF’s European markets, is most concerned about local crime Which of these is of most concern to you currently? Base: All in Mexico (542): Online (305) + CATI (237) One in three worry about neighbourhood crime, compared to only one in ten in IPF’s overall customer book – this may be driven by one of the highest murder rates worldwide Cost of living worries significantly more men than women Economic Outlook

14. Concerns of Poles broadly reflect those of the IPF customer book Which of these is of most concern to you currently? Base: All in Poland (915) Cost of living remains of most concern, with loss of job a worry for one in four people This figure reflects an unemployment rate of 14% in Poland, which is gradually decreasing after a high of 20% in 2003* * http://www.tradingeconomics.com/poland/unemployment-ratehttp://www.tradingeconomics.com/poland/unemployment-rate Economic Outlook

15. Cost of living is most concerning for Romanians, increasing with age from half of 18-24s to two-thirds of those 55+ Which of these is of most concern to you currently? Base: All in Romania (1,478) Loss of jobs follows a reverse trend and unsurprisingly decreases with age Romanians are the nation most concerned with the cost of education Economic Outlook

16. Slovakians tend to have the same concerns as their Czech neighbours Which of these is of most concern to you currently? Base: All in Slovakia (394) However, they are slightly more concerned about crime in their neighbourhood Cost of living is also of most concern in Slovakia, although levels are the same amongst young and old, with the exception of those aged 45-54 Economic Outlook

17. Just under half of IPF customers believe their national economic situation will deteriorate 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 (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) A further three in ten foresee stability in their countries Poles (57%) and Slovakians (54%) are the customers whose outlook is most negative Romanians (34%) and Mexican (23%) stand out as people who are quite positive about the immediate future Economic Outlook

18. Two in five IPF customers hope that their household financial position will improve in the next 12 months This contrasts with the feeling that national economies will not improve in the opinion of the majority Positivity is driven by increased earnings, new jobs and changing personal situations Of the one in five who think their household will get worse, 72% put this down to living costs 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 (9,960); Better (3,126); Worse (2,448) Economic Outlook

19. Over half of Mexicans feel that their household economic situation will get better in the next 12 months All other markets fall below the IPF customer average Czechs and Hungarians are those most negative about the next 12 months, and this feeling is most driven by increases in the cost of living 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 (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Economic Outlook

20. Household economic situation summary The cost of living is the predominant worry of IPF customers, who foresee this driving national economic deterioration Primary concerns in driving this are the price rises in food, utilities and transport Other concerns for people are crime in local area (particularly Mexico) and unemployment Levels of positivity are driven by prospective increases in earnings Women are more likely than men to highlight the rise of food prices as a key contributor to increased living costs Almost half of people believe their country’s economic situation will decline in the next 12 months Economic Outlook

21. Financial Holdings 3

22. Almost half of IPF customers do not have a bank account. Only 9% would want one given the opportunity Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: All (9,960) One in five have no retirement savings plan, while insurance is also not high on list of financial products IPF customers own Life insurance is the product most sought-after for those who do not have it Do not have products 46%67%68%80%81% 85% 86%97% Financial Holdings

23. Two-fifths of Czechs have retirement savings plans in place, double the average for IPF customers worldwide Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: CZ (1,796) Seven in ten Czechs have a bank account but only one in ten have savings accounts ASU insurance tops the list of most-desired financial products Do not have products 29%60%63%73%75%82%84%88%89%96% Financial Holdings

24. More than three in four Hungarians have bank accounts; only 4% have a savings account Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: HU (4,835) Home ownership seems to be relatively high in Hungary with two in five owning a mortgage and just under half holding home contents insurance Do not have products 23%54%62%70%77%81%90%94%96%98% Financial Holdings

25. Bank account ownership is very low in Mexico, with fewer than one in five holding the product Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: MX (542) Very few would actually take an account if given the opportunity Life and ASU insurances are products that Mexicans aspire to have, as are savings accounts Do not have products 70%76%78%82%86%90%94%96%97%99% Financial Holdings

26. Almost half of Poles have life insurance in place, the highest figure of all IPF markets Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: PL (915) A further quarter would like to have life insurance if they were able to Three in four have a bank account and a quarter hold a savings account Do not have products 25%54%60%75% 79%87%88%90%98% Financial Holdings

27. Perhaps worryingly, Romanians have more credit cards than any other financial products Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: RO (1,478) Romanians would like to be more financially secure, with people wanting savings accounts, life insurance and retirement savings plans Do not have products 55%59%64%79%85%87% 88%93%98% Financial Holdings

28. Slovakians have the highest level of bank account ownership of all IPF markets Which of these products do you have? Choose as many as apply. Which additional financial products would you choose to have if your financial situation allowed it? Choose as many as apply. Base: SK (394) Life insurance and retirement savings plans are also owned by at least one in three Slovakians Do not have products 15%57%62%65%67%76%79% 82%96% Financial Holdings

29. Only one in ten Czechs have savings; 70% of people have Kč30,000 or more in debts 85% are repaying Kč 1,500 or more each month and only 2% are certain they have nothing to pay each month Cash savingsTotal debtRepayments Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Czech Republic (1,796) Financial Holdings

30. Cash savingsTotal debtRepayments Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Hungary (4,835) Only 3% of Hungarians have savings, with almost half having 400k Forints or more in debts Only 4% have no debts Three quarters of Hungarians are repaying 20,000+ Forints each month Financial Holdings

31. Cash savingsTotal debtRepayments Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Poland (915) Four in five Poles are repaying more than 200 Zloty per month This is understandable in a market where only 4% of IPF customers have no debts 13% of Poles have savings Financial Holdings

32. Cash savingsTotal debtRepayments Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Romania (1,478) Two-thirds of Romanians have no savings, the lowest of all IPF markets Half have debts between one and five thousand lei with two thirds repaying more than 250 lei each month Financial Holdings

33. Cash savingsTotal debtRepayments Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Slovakia (394) Half of Slovakians hold debts of over €1,000; only 3% have no debts Over half of people need to repay between €60 and €300 each month Two-thirds do not hold savings Financial Holdings

34. Financial Holdings summary Only 54% of IPF customers actually hold a bank account Credit card ownership is higher than any form of savings 1234 1234 BAN K Mr Smith There are positive levels of aspiration towards savings, long-term investments and retirement planning, provided the circumstances are correct People are also aspiring to protect themselves against the economic situation with both Life and ASU insurance Despite this, repayments for the majority appear to be at an affordable level Levels of savings are generally low across all European markets and very few people are debt-free Financial Holdings

35. Use of credit services 4

36. More than half of IPF customers believe that it has become more difficult to attain credit in the last few years Hungarians and Romanians are the people who claim the process has become more difficult than any others A quarter of Slovakians and Mexicans assert that getting credit has become easier Those most worried about the cost of living are most likely to believe that attaining credit has become more difficult Would you say that it has become easier or more difficult to get credit in the last two to three years? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Use of credit services

37. Six in ten IPF customers believe that they would have trouble trying to borrow money from a mainstream bank or lender However, a quarter think they would be able to, especially those in Slovakia Hungarians feel they would be least likely to attain credit in this way Females and those aged 55+ are the most likely to believe they would struggle How easy do you think it would be for you to borrow [local currency] from a mainstream bank or lender? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Use of credit services

38. Nine in ten IPF customers would be prepared to take a loan; half of these would do so in order to pay for unexpected costs Housing costs and purchase of household appliances are also items people would take a loan to pay for, even given greater consideration than health costs Only 4% of 18-24s would not take a loan compared to 12% of those aged 55+ Would you consider taking a loan for the following? Choose as many as apply. Base: All (9,960) Use of credit services

39. A third of Czechs would use loans to purchase household appliances; significantly higher amongst women than men Unexpected costs are still the expenses that most would consider taking a loan for Consideration for taking a loan for housing costs decreases with age in line with life stage Would you consider taking a loan for the following? Choose as many as apply. Base: CZ (1,796) Use of credit services

40. A quarter of Hungarians would not take a loan for any costs outside of the essential Unexpected costs and housing costs are those Hungarians would be most prepared to take loans for 12% of men would be prepared to take a loan for the purchase of electrical devices, compared to only 7% of women Would you consider taking a loan for the following? Choose as many as apply. Base: HU (4,835) Use of credit services

41. Mexicans would be significantly more likely than their European counterparts to take out loans to pay for education or healthcare Half of 18-24 year-olds would do so in order to pay education fees 39% of women would take a loan for healthcare compared to only 33% of men Would you consider taking a loan for the following? Choose as many as apply. Base: MX (542) Use of credit services

42. Poles are the European group most likely to take a loan in order to pay for food Men are significantly more likely than women to take a loan for unexpected costs (49% vs. 38% respectively) A third of Poles would use a loan for housing costs or purchase of household appliances Would you consider taking a loan for the following? Choose as many as apply. Base: PL (915) Use of credit services

43. For Romanians, purchase of household appliances is almost as likely as unexpected costs to warrant taking a loan Men and young people would prioritise unexpected costs, while women are more likely to use a loan for household appliances Would you consider taking a loan for the following? Choose as many as apply. Base: RO (1,478) Use of credit services

44. Slovakians are the group most likely to take a loan in order to pay for unexpected costs A quarter of individuals would use a loan for housing costs: 22% of men compared to 30% of women Preparedness to use a loan to pay for healthcare increases with age Would you consider taking a loan for the following? Choose as many as apply. Base: SK (394) Use of credit services

45. The overwhelming majority of IPF customers claim to use credit in a sensible way, borrowing only when necessary Please indicate whether you agree of disagree with each of the following statements… Base: All (9,960) This is manifested by 93% thinking before they borrow, 87% only using credit in emergencies and 84% not borrowing unless they know they can afford repayments Comfort in affording credit repayments appears to decrease with age Use of credit services

46. One in five Czechs tend to use credit on impulse, significantly higher than the 16% of IPF customers as a whole Please indicate whether you agree of disagree with each of the following statements… Base: All in Czech Republic (1,796) 69% of men claim they can comfortably afford credit repayments compared to only 63% of women Use of credit services

47. Only four in ten Hungarians can comfortably afford to repay their credit loans Please indicate whether you agree of disagree with each of the following statements… Base: All in Hungary (4,835) This compares to seven in ten of the overall IPF customer book Impulsive credit use is significantly higher amongst men compared to their female counterparts, who tend to prefer emergency credit use only Use of credit services

48. 86% of Mexicans can comfortably afford their credit repayments Please indicate whether you agree of disagree with each of the following statements… Base: All in Mexico (542): Online (305) + CATI (237) Only one in ten use credit on impulse, a more restrained proportion than all European markets Only 14% will usually borrow as much as the lender will allow, compared to 34% of IPF customers worldwide Use of credit services

49. Just a quarter of Poles use credit as part of the way they manage their budget Please indicate whether you agree of disagree with each of the following statements… Base: All in Poland (915) However, 20% tend to use credit on impulse, more than most other markets 45% will borrow as much as the lender will give them, significantly higher than the IPF average Use of credit services

50. Romanians seemingly treat credit differently to most of their counterparts in other IPF markets Please indicate whether you agree of disagree with each of the following statements… Base: All in Romania (1,478) This is demonstrated by almost half of Romanians using credit as part of their budget management Nine in ten do not borrow more than they can repay (91% vs. 84% of IPF average) Use of credit services

51. Three in five Slovakians will only borrow as much as the lender will allow Please indicate whether you agree of disagree with each of the following statements… Base: All in Slovakia (394) This figure is comprised of 55% of men compared to 62% of women 85% only use credit in an emergency, although 35% say they use it as part of their budget management Use of credit services

52. Two-thirds of IPF customers allude to speed and convenience as key factors when dealing with a financial organisation Mexicans stand out as they look for good reputation as the highest priority Special deals for customers are particularly treasured amongst Poles Those aged 35-44 are the group most likely to look for special deals for loyal & long- standing customers Which of the following is important to you when dealing with a financial organisation? Choose as many as apply. Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Use of credit services

53. Use of credit services summary In the opinion of the majority, attaining credit has become more difficult in the last few years Credit is generally used sensibly by IPF customers: only in emergencies and after careful consideration Most claim that they only borrow as much as they can comfortably afford to repay Taking a loan to pay for something is a course of action most would consider Unexpected costs are the amounts people would most likely borrow for. At least a quarter would use a loan to pay for housing, household appliances or healthcare Speed and convenience are the factors most sought after when dealing with financial organisations 60% believe they would find it difficult or impossible to take credit from a mainstream lender Use of credit services

54. Standard of living 5

55. More than three quarters of IPF customers worldwide have spent cautiously in the last 12 months Cautious spending seemingly increases with age Romanians are those who have been prepared to spend a little more freely Hungarians are the most cautious with nine in ten spending more carefully than past Much more cautious A little more cautious About the same as usual Spending a little more freely Spending a lot more freely All45%32%14%5%2% Czech Rep39%27%22%5%6% Hungary65%25%6%1%0% Mexico45%37%9%8%1% Poland44%37%15%2%1% Romania40%20% 11%7% Slovakia33%23%27%9%3% 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 (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Living Standards

56. Amongst those whose spending has been more cautious in the past 12 months, socialising is the expenditure most reduced This is followed very closely by consumer goods and holidays, all three items that could be considered non-essential Hungarians and Romanians are significantly more likely than other people to cut back on consumer goods Three in four Poles have cut their socialising You have said that you have been more cautious in your spending in the last 12 months. Which if any of the following have you cut back on in order to decrease your level of day-to-day spending over the last twelve months? Please select all that apply. Base: All whose spending is more cautious (7,847), CZ (1,176), HU (4,384), MX (451), PL (741), RO (870), SK (225) 1/2 Living Standards

57. Two in five IPF customers have cut back on quality food in order to spend more cautiously However, this rises to two in three in Hungary, and is at a similar level in Romania Heating is also something that half of Hungarians are cutting back on Women are more likely to cut back on consumer goods while men have reduced spending on transport You have said that you have been more cautious in your spending in the last 12 months. Which if any of the following have you cut back on in order to decrease your level of day-to-day spending over the last twelve months? Please select all that apply. Base: All whose spending is more cautious (7,847), CZ (1,176), HU (4,384), MX (451), PL (741), RO (870), SK (225) 2/2 Living Standards

58. Three-quarters of IPF customers would find it hard to summon up money for emergency payments, or to save for a major purchase Mexicans feel it would be easier to find the money for these causes Hungarians are the people most likely to find it difficult AllCzech RepHungaryMexicoPolandRomaniaSlovakia If you were to face an emergency or an unexpected bill or expense how easy or difficult would it be for you to find -amount- without borrowing? How easy or difficult would you find it to save -amount- for a major purchase of something that you needed? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Living Standards

59. Four in ten people are satisfied with the standard of living in their household; a quarter are dissatisfied Positivity is far greater in Mexico, with two-thirds satisfied with their living standards Hungarians have the lowest levels of satisfaction, with over half feeling indifferent Satisfaction with standard of living is significantly lower as people get older (50% of 18- 24 year-olds vs. 30% of those aged 55+) Generally, how satisfied are you with the overall standard of living of your household? Base: All (9,960), CZ (1,796), HU (4,835), MX (542), PL (915), RO (1,478), SK (394) Living Standards

60. Standard of living summary IPF customers have spent more cautiously in the past 12 months, a trend that increases with age Socialising, consumer goods and holidays are the items cautious spenders are most likely to cut down on Worryingly, a significant proportion of people are reducing their spending on quality food The majority of people would be unable to find money to make emergency payments or save for major purchases Fewer than half of people are satisfied with their overall standard of living Living Standards

61. Conclusions & Recommendations 6

62.  The cost of living is of most concern to people, driven in the main by increases in the price of daily essentials, most notably food, utilities and transport  Mexico, out of alignment with its European counterparts, is the only IPF market where the major concern is something other than cost of living; in their case it is neighbourhood crime which most worries people  Some do foresee a wave of economic stability reaching their respective countries, but the majority uphold a negative outlook, predominantly motivated by the high cost of living  Where economic positivity prevails, it is propelled by improvements in the employment market: either by a change of job, or an increased income  Many aspire to own savings and insurance products, but the reality is that few have these while a significant proportion hold credit cards Summary of findings (1)

63.  Very few individuals are debt-free, but repayment levels are manageable for most  This is supported by the majority of IPF customers using credit in a sensible fashion, giving it due consideration before attaining it  Most individuals would use loans to pay for things, although this attitude generally applies to unexpected costs  This is because the majority of people would find it hard to make emergency payments or save for a particular purchase, no doubt supported by relatively few having savings of any amount Summary of findings (2)

64.  Reductions in expenditure are now commonplace for IPF customers, for whom spending has consciously become more cautious in the past 12 months  Fewer than half of people are satisfied with their overall standard of living Summary of findings (3)

65.  What do people think is holding them back from taking out savings products? Is it a simple case of lack of money or something more significant?  Is there common consensus about what is driving those who feel the economy faces a positive future?  The majority claim to use credit in a sensible way, but is this the case when they approach IPF? Have they thought it through, and if so what processes have allowed them to arrive at the decision to take credit?  We know how much people are repaying each month, but is there value in understanding the percentage of their monthly income that goes straight out to cover debts?  What do people believe will improve their outlook on standard of living? Potential subjects for revisiting

66. Contact Leo Brownstein, YouGov Financial Services leo.brownstein@yougov.comleo.brownstein@yougov.com Tel: 0207 012 6013