Assessing the Level of Financial Literacy among Households: Evidence from Emerging Economies

Abstract

Financial literacy (FL) is a key variable of financial welfare of a household especially in emerging economies with dynamic financial systems and greater access to financial services. The current research paper seeks to evaluate the financial literacy level with households and analyse it in connection with the other major socio-economic variables like education, income, and employment. The research design used is quantitative and analytical with the primary data, gathered by means of a structured questionnaire among 200 households, and then favored by the secondary one used by the scholars. Data were analyzed with the help of such statistical instruments as descriptive analysis, correlation, and regression. The results demonstrate that FL is average, and the socio-economic factors have a profound impact in this process, the most important of which has proved to be education. The research also shows that increased FL causes better financial behavior, FI and economic stability. Nonetheless, there remain knowledge gaps in the domain of FL, as well as demographic differences, which outlines the necessity of a policy-specific response. In conclusion, the paper finds that greater emphasis on FL is the key towards inclusive and sustainable economic growth in the emerging economies.