A

Project on
“COMPARATIVE STUDY OF FINANCIAL LITERACY BETWEEN RURAL AND URBAN
AREA”
Submitted to
University of Mumbai for partial Completion of Degree
Of
Bachelor of Banking and Insurance
Under the Faculty of Commerce
By
Shraddha Suhas Chavan
(TYBBI: - A)

Under the Guidance of

Dr. Syed Mubashar Hasan
PHD, MBA, M.I.R.P.M, M.COM, BSC.

SYDENHAM COLLEGE OF COMMERCE AND ECONOMICS, B_ROAD, CHURCHGATE

Mumbai – 400020

October, 2023
SYDENHAM COLLEGE OF COMMERCE AND ECONOMIC
B – ROAD, CHURCHGATE, MUMBAI-400020
BBI(BANKING & INSURANCE)

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 Sydenham College of Commerce & Economics

B. Rd., Churchgate, Mumbai - 400020

Certificate

This is to certify that MS. SHRADDHA SUHAS CHAVAN, Roll No: 10 of Third Year TYBBI Semester
5 (Year 2023) has successfully completed the project on “Comparative Study of Financial Literacy
between Rural and Urban Area” under the guidance of DR. SYED MUBHASHAR HASAN

DR. SHRINIVAS S. DHURE

(Principal)

Course Coordinator

DR. SYED MUBASHAR HASAN

(Project Guide Internal Examination)

External Examiner

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 Declaration of Learner

I the undersigned MISS SHRADDHA SUHAS CHAVAN here by, declare that the work embodied in this
project work titled “COMPARATIVE STUDY OF FINANCIAL LITERACY BETWEEN URBAN
AND RURAL AREA”, forms my own contribution to the research work carried out under the guidance
of DR. SYED MUBASHAR HASAN is a result of my own research work and has not been previously
submitted to any other University for any other Degree/Diploma to this of any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

SHRADDHA SUHAS CHAVAN

(Signature)

Certified by
DR. SYED MUBASHAR HASAN.

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 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimension in the
completion of this project.

I take this opportunity to thank the Dr. Homi Bhabha State University for giving me chance to so this
project.

I would like to thank my Principal, DR. SHRINIVAS S DHURE for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator DR. SYED MUBASHAR HASAN for moral support
and guidance.

I would also like to express my sincere gratitude towards DR. KHUSHPAT SUKANRAJ JAIN.

I would also like to express my sincere gratitude towards my project guide DR. S. M. HASAN SIR
whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and magazines
related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion
of the project especially my Parents and peers who supported me throughout my project.

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 INDEX
Contents Page No
Chapter No. 1:- Introduction 6 - 31

1.1. Origin and Development 8

1.2. Concept 9

1.3. Components of Financial Literacy 10

1.4. Elements of Financial Literacy 12

1.5. Types of Financial Literacy 12

1.6. Significance and Importance 15

1.7. Aims of Financial Literacy 16

1.8. Objectives of Financial Literacy 16

1.9. Theories 17

1.10. Government Guidelines 20

1.11. Status with Reference to Mumbai City 24

1.12. Status with Reference to World 27

1.13. Drawbacks 29

Chapter No.2: - Literature Review 32 - 52

Chapter No. 3: - Research Methodology 53 - 60

3.1. Introduction 53

3.2. Statement of Problem 53

3.3. Objectives 54

3.4. Significance of Research 56

3.5. Research Methodology 57

3.6. Research Universe 57

3.7. Data Needed for the Research 58

3.8. Limitation of Research Methodology 60

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Chapter No. 4: - Data Analysis & Interpretation 61 - 73

4.1. Demographic Questions 61

4.2. Topic Related Questions 64

Chapter No. 5: - Conclusion and Suggestion 74 - 76

Appendices

Reference 77

Bibliography 80

List of Tables Page No

4.1 Demographic Questions

Table no 4.1 61

Table no 4.2 61

Table no 4.3 62

Table no 4.4 63

Table no 4.5 63

Table no 4.6 64

Table no 4.7 64

Table no 4.8 65

Table no 4.9 65

Table no 4.10 66

Table no 4.11 66

Table no 4.12 67

Table no 4.13 68

Table no 4.14 69

Table no 4.15 69

Table no 4.16 70

Table no 4.17 70

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Table no 4.18 71

Table no 4.19 71

Table no 4.20 72

Table no 4.21 73

Table no 4.22 73

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 CHAPTER – 1: - INTRODUTION

1.1 ORIGIN & DEVELOPMENT

The idea of financial literacy began to take shape in the early 20th century as financial institutions, like
banks and credit unions, started offering services to a wider range of consumers. People needed to
understand concepts like savings, loans, and interest rates to make informed choices.

The post-World War II economic boom in many Western countries led to increased consumerism and the
expansion of credit. This period saw the rise of the modern consumer, making financial literacy more
critical for individuals and families.

The term "financial literacy" gained popularity in the 21st century. Various factors contributed to this,
including the global financial crisis of 2007-2008, which highlighted the importance of financial
knowledge and responsible financial behavior.

Numerous nonprofit organizations and advocacy groups emerged to promote financial literacy and
provide resources to individuals. These organizations often work in partnership with governments,
schools, and financial institutions.

The digital age brought new tools and platforms for delivering financial education. Online courses,
mobile apps, and websites now offer a wide range of resources to help people improve their financial
literacy

Governments worldwide recognized the importance of financial literacy and began implementing
programs and policies to promote it. These initiatives included the development of educational materials,
financial literacy campaigns, and the integration of financial education into school curricula.

Now a Days financial literacy is considered a critical life skill, and efforts to enhance it continue to evolve
as financial landscapes change. The goal remains to empower individuals with the knowledge and skill

Efforts to promote financial literacy include educational programs, government initiatives, and advocacy
groups, all aimed at improving individuals' understanding of financial concepts and their ability to
manage money effectively. The goal is to empower people to make informed decisions about saving,
investing, budgeting, and managing debt to achieve financial well-being.s needed to make sound financial
decisions and achieve financial security.

The Organization for Economic Co-operation and Development (OECD) started an inter-governmental
project in 2003 with the objective of providing ways to improve financial education and literacy standards
through the development of common financial literacy principles.

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In March 2008, the OECD launched the International Gateway for Financial Education, which aims to
serve as a clearinghouse for financial education programs, information and research worldwide. In the
UK, the alternative term "financial capability" is used by the state and its agencies: the Financial Services
Authority (FSA) in the UK started a national strategy on financial capability in 2003. The US government
established its Financial Literacy and Education Commission in 2003

The OECD's Programme for International Student Assessment (PISA) in 2018 published a definition in
two parts. The first part refers to kinds of thinking and behavior, while the second part refers to the
purposes for developing the particular literacy. "Financial literacy is the knowledge and understanding of
financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and
understanding in order to make effective decisions across a range of financial contexts, to improve the
financial well-being of individuals and society, and to enable participation in economic life

RBL Bank, one of India’s leading private sector banks, is helping to deliver this life-changing training.
Its Saksham financial literacy training programs, launched in December 2013 in Gujarat, Maharashtra,
and Rajasthan provinces, are classroom-based financial literacy courses tailored for women in lower-
income communities.

Designed to cater to a wide range of needs, Saksham utilizes visual aids, stories, role-playing activities
and exercises that resonate with the clients’ lives and experiences. Trainees are taught life skills alongside
financial principles: while they learn how to access banking services and to repay loans responsibly, they
also acquire planning skills, such as how to create investment and savings plans for their families.

1.2 CONCEPT

Financial literacy is the ability to understand and effectively use financial skills. These financial skills are
as simple as budgeting, investing, credit management, and financial management. In other words,
financial literacy is the ability to manage money. A strong foundation of these financial skills will help in
achieving various life goals like retirement, education, and even going on a vacation.

Financial literacy includes many skills. However, the most popular ones are budgeting, managing
expenses, paying off debt and understanding the risk return trade off in investment products. Acquiring
these skills would require one to understand the basic financial concepts like time value of money,
compound interest, annualized return and opportunity cost.

With an abundance of credit products available in the market like credit card debt, overdraft facility on
debit cards, and EMI, financial literacy becomes important. Understanding debt and having basic
financial knowledge will help individuals to use these products responsibly.

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Financial literacy often teaches individuals how to make major financial decisions. Moreover, it increases
financial discipline and financial capability. This will lead to major lifestyle changes like saving and
investing regularly, managing debts effectively and fulfilling life goals efficiently. Financial literacy will
ensure one’s financial wellbeing and also protect individuals from financial frauds.

Lacking the knowledge of these skills leads to financial illiteracy. Financial illiteracy leads to budget
mismatch, higher expenses than income, accumulation of debts, poor credit score, being victims to
financial frauds, and other negative consequences.

Financial literacy often teaches individuals how to make major financial decisions. Moreover, it increases
financial discipline and financial capability. This will lead to major lifestyle changes like saving and
investing regularly, managing debts effectively and fulfilling life goals efficiently. Additionally, financial
literacy will ensure one’s financial wellbeing and also protect individuals from financial frauds.

In rural areas, financial literacy faces several challenges. Limited access to formal banking services, lower
education levels, and reliance on agriculture often lead to lower financial knowledge. Rural residents may
struggle to access basic financial services, manage income from seasonal farming, and lack exposure to
financial education programs. These challenges can hinder their ability to save, invest, and plan for the
future, impacting their overall financial well-being.

In contrast, urban areas generally benefit from better access to banking services, higher educational
opportunities, and diverse employment options. Urban dwellers often have greater exposure to financial
education programs and digital financial services. This environment fosters higher financial literacy
levels, enabling residents to make more informed financial decisions, manage debt, and invest wisely.

Efforts to bridge this urban-rural gap in financial literacy involve tailoring financial education programs
to suit the specific needs of each environment. In rural areas, community-based initiatives and mobile
banking solutions aim to increase access and awareness. In urban settings, the focus is on expanding
financial education opportunities and leveraging technology to enhance financial literacy further.

Developing financial literacy skills is essential. It helps in improving personal finance management.
Personal finance is a process which involves learning, practising and applying a variety of financial skills.
It ranges from budgeting, managing, paying off debt, understanding credit and various
investment products.

1.3 Components of Financial Literacy: -

Financial literacy is composed of a number of financial components and skills that enable a person to
learn how to handle money and debt effectively.

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1. Budgeting: -
Budgeting is a needed life skill that helps in the gaining of financial knowledge for money
planning and management. It’s one of the most critical parts of financial knowledge. Keeping
track of one’s spending patterns is crucial. The creation of an workable financial strategy will be
helped by effective money management. The everyday plan will assist in keeping track of costs,
separating the unneeded ones, and ensuring that money is spent properly. It is important for
financial security and independence.

2. Debt:-
Debt is often viewed as a negative element. As a result, it’s serious to understand debt. It’s also
essential to understand the difference between good and bad debt. Borrowing money for goods
that are required to make a livelihood is considered good debt. Borrowing money for unneeded
expenses is considered bad debt. As a result, being able to distinguish between required and
superfluous spending will assist an 0individual in avoiding falling in debt.

3. Savings:-
Savings guarantees financial security, a stable present, and a bright future. Long-term wealth may
be built via prudent financial planning. Keeping track of one’s spending patterns might aid in
money saving and financial discipline.

4. Investments:-
Instead of allowing money remain in a bank account, it can be invested in financial products.
Investing is all about creating and developing wealth so that you may live a secure and happy life.
Investments will assist in the generation of additional monthly income as well as substantial
profits. It is also possible to attain financial goals while allocating funds to retirement savings.
Equities, debt instruments, mutual funds, real estate, and gold are some of the most popular
investment possibilities

5. Taxation: -
Gaining knowledge about the different forms of taxation and how they impact an individual’s net
income is crucial for obtaining financial literacy. Whether it be employment, investment, rental,
inheritance, or unexpected, each source of income is taxed differently.
Awareness of the different income tax rates permits economic stability and increases financial
performance through income management.

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 6. Personal Financial Management: -
The most important criteria, personal financial management, includes an entire mix of all of the
components listed above.
Financial security is ensured by balancing the mix of financial components above to solidify and
increase investments and savings while reducing borrowing and debt
Achieving an in-depth knowledge of the financial components discussed above guarantees an
increase in an individual’s financial literacy

7. Improves Credit Score

Credit scores are typically influenced by factors such as credit utilization, payment history, and
length of credit history. Financial literacy can help you improve your credit score by teaching you
how to use credit responsibly and make timely payments
.
1.4 Elements of financial literacy

1. Financial Knowledge
Financial knowledge means to understand the financial concepts and procedures as well as the use
of this understanding t solve financial problems. It helps individual to manage their money,
personal finance, investing and tax planning. Its primary function is safeguarding individuals from
financial frauds and scams

2. Financial Skills
It is an ability to use knowledge and understanding to manage an expected or unexpected situation
in order to solve financial problems and covert it to a benefit and opportunity to one’s advantage.
Finance skills are hard and soft skills that are used by those who work in the finance industry,
including accountants, financial analysts, chief financial officers, underwriters, and finance
managers among others
.
3. Financial Attitudes
Financial attitude is the state of mind of a person about the finance which is generally a resulting
of his background and environment

4. Financial Behavior
Financial Behavior is the level of an individual’s ability to manage financial resources including
the planning to earn money, managing and controlling the finances, and practices related to cash
and cash credits.
1.5. Types of Financial Literacy

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Financial literacy encompasses various aspects of financial knowledge and skills. Financial literacy
encompasses a wide range of topics, and individuals may focus on different areas depending on their
financial goals and needs. Developing competence in these various types of financial literacy can lead to
better financial decision-making and financial well-being. Here are some key types or components of
financial literacy:

1. Basic Financial Literacy

This includes fundamental concepts like understanding the value of money, budgeting, saving, and
managing debt. It forms the foundation for more advanced financial knowledge.

2. Investment Literacy:
Knowledge about different investment options, risk assessment, portfolio diversification, and the
workings of financial markets fall under this category.

3. Credit and Debt Management:

Understanding credit scores, interest rates, loans, and how to manage and reduce debt is crucial for sound
financial decision-making.

4. Financial Planning:
This involves setting financial goals, creating a financial plan, and considering factors like retirement
planning, insurance, and estate planning.

5. Tax Literacy:
Knowledge about income tax, deductions, credits, and how to optimize tax returns is essential for
maximizing financial resources.

6. Consumer and Financial Rights:

Understanding consumer protection laws, financial regulations, and your rights as a consumer when
dealing with financial institutions and products.

7. Economic Literacy:
Awareness of economic principles, inflation, and how broader economic trends can affect personal
finances.

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8. Digital Financial Literacy:
In the digital age, knowing how to safely and effectively manage finances online, including online
banking and avoiding online scams, is important.

9. Entrepreneurial and Business Literacy:

For those interested in entrepreneurship or managing a business, understanding financial statements, cash
flow, and business finance is critical.

10. Behavioral Finance Knowledge:

Recognizing cognitive biases and emotional factors that influence financial decisions, and learning to
make decisions that align with long-term financial goals.

11. Investment Literacy:

Understanding various investment options, such as stocks, bonds, real estate, and mutual funds, and
knowing how to analyze them for potential returns and risks.

12. Insurance Literacy:

Knowledge about different types of insurance (e.g., health, life, auto) and how insurance policies work,
including premiums, coverage, and claims.

13. Retirement Planning:

Learning about retirement accounts, such as 401(k)s and IRAs, and planning for a financially secure
retirement.

14. Savings and Emergency Fund:

Knowing the importance of saving money, building an emergency fund, and setting aside funds for short-
term and long-term goals.

15. Investor Protection:

Understanding the regulatory framework and protections in place for investors to prevent fraud and
ensure fair financial practices.

16. Estate Planning:

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Knowledge about wills, trusts, and inheritance laws to effectively manage and pass on assets to heirs.

1.6. SIGNIFICANCE AND IMPORTANCE

A strong foundation of financial literacy can help support various life goals, such as saving for education
or retirement, using debt responsibly, and running a business. Key aspects to financial literacy include
knowing how to create a budget, plan for retirement, manage debt, and track personal spending

Financial literacy is an important aspect of the life of an individual. The financial literacy is important for
both urban and rural areas as it is an in-depth knowledge on financial education and strategies which are
necessary for achieving financial growth and success. It helps in generating, managing, saving, spending
and investing money.

A strong foundation of financial literacy can help support various life goals, such as saving for education
or retirement, using debt responsibly, and running a business. Key aspects to financial literacy include
knowing how to create a budget, plan for retirement, manage debt, and track personal spending. The
financial literacy is important in following ways:-

1. Financial literacy is important as it provides individuals with the information and skills necessary to
efficiently manage their finances.
2. Without financial literacy, one’s actions and judgments regarding savings and investments would be
based on a shaky basis.
3. Aids in the better comprehension of financial concepts and the effective management of one’s
money.
4. Assists in proper money management, financial decision-making, and financial stability.
5. imparts in-depth understanding of financial education and many techniques required for financial
growth and success.
6. Provides in-depth understanding of financial education and many techniques required for financial
growth and success.
7. Increase in ethical decision-making when selecting insurance, loans, investments, and using a credit
card
8. The financial literacy of individuals leads to effective creation of structed budget

1.7. The Aims and Objectives of studying Financial Literacy: -

Aims of Financial Literacy:

1. Promoting Financial Wellness:

To empower individuals with the knowledge and skills necessary to manage their finances
effectively, achieve financial stability, and improve their overall financial well-being.

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 2. Preventing Financial Pitfalls:
To educate individuals about common financial pitfalls and mistakes, helping them avoid
excessive debt, poor investment decisions, and financial fraud.

3. Building a Secure Future:

To enable individuals to plan for their long-term financial goals, such as retirement,
homeownership, education, and legacy planning.

4. Reducing Financial Inequality:

To address economic disparities by providing access to financial education and tools to
underserved populations, promoting financial inclusion.

5. Enhancing Economic Stability:

To contribute to broader economic stability by fostering a financially literate population capable of
making informed financial decisions that benefit both individuals and society.

1.8. Objectives of Financial Literacy:

1. Basic Financial Knowledge:

To impart fundamental financial concepts, such as budgeting, saving, investing, and managing debt,
ensuring a strong financial foundation.

2. Financial Decision-Making:
To equip individuals with the skills needed to make sound financial decisions in everyday life, from
choosing financial products to evaluating investment options.
3. Risk Management:
To educate individuals on how to assess and mitigate financial risks, reducing the likelihood of
financial crises or unexpected setbacks.

4. Long-Term Planning:
To encourage individuals to set and work towards long-term financial goals, such as retirement
planning and wealth accumulation.

5. Consumer Protection:

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 To inform individuals about their rights and responsibilities as consumers of financial products
and services, including how to recognize and avoid financial scams.

6. Behavioral Finance:
To address the behavioral biases that can affect financial decisions and provide strategies for
making decisions that align with one's financial goals.

7. Customization:
To recognize that financial literacy needs vary by age, income level, and life stage, tailoring
educational content to specific audiences.

8. Accessibility:
To make financial education accessible to all, including underserved communities, through
various means such as workshops, online resources, and community outreach.

9. Measurement and Evaluation:

To establish metrics for assessing the impact of financial literacy programs, ensuring their
effectiveness in improving financial knowledge and behavior.

10. Continuous Learning:

To emphasize that financial literacy is a lifelong journey, encouraging individuals to stay updated
on financial trends and regulations and adapt their financial knowledge as needed.

1.9. THEORIES
Financial literacy is a complex field with various theories and models that attempt to explain how
individuals acquire and apply financial knowledge. Here are some prominent theories and perspectives in
the study of financial literacy:

1. Cognitive Theory:
This theory suggests that financial literacy is primarily about cognitive processes, including
information processing, decision-making, and problem-solving. It focuses on how individuals
acquire, process, and use financial information to make decisions.

2. Behavioral Economics:

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 Behavioral economics combines insights from psychology and economics to explain financial
decision-making. It emphasizes that financial literacy is influenced by cognitive biases, emotions,
and heuristics that can lead to irrational or suboptimal choices. Researchers in this field explore
how these biases impact financial behavior.

3. Financial Socialization Theory:

This theory posits that financial literacy is acquired through socialization processes, such as
family, peers, and education. It suggests that individuals learn financial attitudes, behaviors, and
knowledge from their social environment and upbringing.

4. Human Capital Theory:

Human capital theory argues that financial literacy is an investment in human capital, similar to
education and skills development. Individuals with higher financial literacy are believed to have
greater earning potential and economic well-being.

5. Life-Cycle Hypothesis:
This theory, proposed by economist Franco Modigliani, suggests that individuals make financial
decisions based on their life stage and expected lifetime income. It highlights the importance of
saving and investing over a lifetime to maintain a stable standard of living in retirement.

6. Theory of Planned Behavior:

This psychological theory asserts that financial behavior is influenced by intentions, attitudes, and
perceived behavioral control. It suggests that individuals are more likely to engage in financially
responsible actions if they have positive intentions and perceive control over their actions.

7. Financial Capability Framework:

Developed by organizations like the World Bank and OECD, this framework encompasses a
comprehensive set of financial knowledge, skills, and behaviors that individuals should possess to
make sound financial decisions. It emphasizes financial education as a means to enhance financial
capability.

8. Dual-Process Theory:

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 This theory posits that individuals have two modes of thinking: System 1 (intuitive and automatic)
and System 2 (deliberative and analytical). Dual-process theories explore how these thinking
processes influence financial decision-making and how financial literacy can engage System 2
thinking to make more rational choices.

9. Social Learning Theory:

Social learning theory, rooted in psychology, suggests that individuals acquire financial
knowledge and behavior by observing and imitating others. It highlights the role of social
networks and peer influences in shaping financial literacy.

10. Information Processing Theory:

Information processing theories explain how individuals receive, encode, store, and retrieve
financial information. They examine cognitive processes related to financial learning and memory,
emphasizing the importance of effective information presentation and communication.
Certainly, here are a few more theories and models related to financial literacy and behavior:

11. Homo Economicus Model:

This model assumes that individuals are entirely rational and self-interested in their financial
decisions. It's often used as a simplified representation in economic studies.\

12. Financial Fragility Theory:

This theory examines how vulnerable individuals are to financial shocks, emphasizing the
importance of financial preparedness and resilience.

13. Financial Well-being Model:

It takes a holistic approach, considering not just financial knowledge and behavior but also factors
like subjective well-being and life satisfaction in assessing an individual's financial well-being.

14. Financial Social Learning Theory:

This theory focuses on how individuals learn about finance through observing and interacting with
others in their social networks.

15. Self-Determination Theory:

It explores the role of autonomy, competence, and relatedness in motivating individuals to engage
in responsible financial behaviors.

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 16. Financial Attitude-Behavior Gap Model:
This model highlights the disparity between one's financial attitudes and actual financial
behaviors, recognizing that intentions don't always lead to actions.

17. Theory of Interpersonal Relations:

It examines how social relationships, such as trust and social support, influence financial decisions
and financial well-being.

18. Economic Theory of Financial Behavior:

This theory assumes individuals are rational decision-makers who aim to maximize their utility by
making informed financial choices. It emphasizes the importance of information and education in
financial decision-making.

19. Economic Theory of Financial Behavior:

This theory assumes individuals are rational decision-makers who aim to maximize their utility by
making informed financial choices. It emphasizes the importance of information and education in
financial decision-making.

20. Cognitive-Experiential Model:

This model proposes two systems of decision-making: one is fast, intuitive, and emotional
(experiential), while the other is slow, rational, and analytical (cognitive). Financial decisions
often involve a combination of both systems.

21. Stage Theory of Financial Development:

This theory posits that individuals go through various stages of financial development throughout
their lives, from basic financial awareness to advanced financial management. It emphasizes the
importance of financial education at each stage.

1.10. GOVERNMENT GUILDLINES

Financial literacy is important because it equips individuals with the knowledge and skills needed
to make informed financial decisions, achieve stability, manage debt, build wealth, protect against
fraud, and contribute to economic well-being. To bring an awareness regarding financial literacy’
to make individuals financial literate government introduced various schemes and carried out
various initiatives.

1. Pradhan Mantri Jan Dhan Yojana (PMJDY)

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Hon’ble Prime Minister announced Pradhan Mantri Jan Dhan Yojana as the National Mission on
Financial Inclusion in his Independence Day address on 15th August 2014, to ensure
comprehensive financial inclusion of all the households in the country by providing universal
access to banking facilities. Under this, a person not having a savings account can open an account
without the requirement of any minimum balance and, in case they self-certify that they do not
have any of the officially valid documents required for opening a savings account, they may open
a small account.

Thus, PMJDY offers unbanked persons easy access to banking services and awareness about
financial products through financial literacy programmes. In addition, they receive a RuPay debit
card, with inbuilt accident insurance cover of Rs. 2 lakh, and access to overdraft facility upon
satisfactory operation of account or credit history of six months. Further, through Prime Minister’s
Social Security Schemes, launched by the Hon’ble Prime Minister on 9th May 2015, all eligible
account holders can access through their bank accounts personal accident insurance cover under
Pradhan Mantri Suraksha Bima Yojana, life insurance cover under Pradhan Mantri Jeevan Jyoti
Bima Yojana, and guaranteed minimum pension to subscribers under Atal Pension Yojana.

PMJDY was conceived as a bold, innovative and ambitious mission. The inclusive aspect of this is
evident from the fact that 28.70 crore (66.69%) of PMJDY accounts are in rural areas and 23.87
crore (over 55.47%) PMJDY account holders are women.

The deposit base of PMJDY accounts has expanded over time. As on 18.08.2021, the deposit
balance in PMJDY accounts is Rs. 1,46,230.71 crore. The average deposit per account has more
than Triple from Rs. 1,064 in March 2015 to Rs. 3397 in August 2021.

For creating a universal social security system for all Indians, especially the poor and the under-
privileged the Hon’ble Prime Minister launched three Social Security Schemes in the Insurance
and Pension sectors on 9th of May, 2015.

2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The PMJJBY is available to people in the age group of 18 to 50 years having a bank account who
give their consent to join / enable auto-debit. Aadhar is the primary KYC for the bank account.
The life cover of Rs. 2 lakh is for the one year period stretching from 1st June to 31st May and is

21
renewable. Risk coverage under this scheme is for Rs. 2 lakh in case of death of the insured, due
to any reason. The premium is Rs. 436 per annum which is to be auto-debited in one installment
from the subscriber’s bank account as per the option given by him on or before 31st May of each
annual coverage period under the scheme. The scheme is being offered by the Life Insurance
Corporation and all other life insurers who are willing to offer the product on similar terms with
necessary approvals and tie up with banks for this purpose. As on 30.06.2022, cumulative
enrollment is over 13.11 crore under PMJJBY.

3. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The Scheme is available to people in the age group 18 to 70 years with a bank account who give
their consent to join / enable auto-debit on or before 31st May for the coverage period 1st June to
31st May on an annual renewal basis. Aadhar would be the primary KYC for the bank account.
The risk coverage under the scheme is Rs. 2 lakh for accidental death and full disability and Rs. 1
lakh for partial disability. The premium of Rs.20 per annum is to be deducted from the account
holder’s bank account through ‘auto-debit’ facility in one installment. The scheme is being offered
by Public Sector General Insurance Companies or any other General Insurance Company who are
willing to offer the product on similar terms with necessary approvals and tie up with banks for
this purpose. As on 30.06.2022, cumulative enrollment is over 29.01 crore under PMSBY.

4. Atal Pension Yojana (APY)

APY was launched on 9th May, 2015 by the Prime Minister. APY is open to all saving bank/post
office saving bank account holders in the age group of 18 to 40 years and the contributions differ,
based on pension amount chosen. Subscribers would receive the guaranteed minimum monthly
pension of Rs. 1,000 or Rs. 2,000 or Rs. 3,000 or Rs. 4,000 or Rs. 5,000 at the age of 60 years.
Under APY, the monthly pension would be available to the subscriber, and after him to his spouse
and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be
returned to the nominee of the subscriber. The minimum pension would be guaranteed by the
Government, i.e., if the accumulated corpus based on contributions earns a lower than estimated
return on investment and is inadequate to provide the minimum guaranteed pension, the Central
Government would fund such inadequacy. Alternatively, if the returns on investment are higher,
the subscribers would get enhanced pensionary benefits.

In the event of pre-mature death of the subscriber, Government has decided to give an option to
the spouse of the subscriber to continue contributing to APY account of the subscriber, for the
remaining vesting period, till the original subscriber would have attained the age of 60 years. The

22
spouse of the subscriber shall be entitled to receive the same pension amount as that of the
subscriber until the death of the spouse. After the death of both the subscriber and the spouse, the
nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age
60 of the subscriber. As on 31st July, 2021, a total of 321.02 lakh subscribers have been enrolled
under APY.

5. Pradhan Mantri Mudra Yojana

The scheme was launched on 8th April 2015. Under the scheme a loan of upto Rs. 50,000 is given
under sub-scheme ‘Shishu’; between Rs. 50,000 to 5.0 Lakhs under sub-scheme ‘Kishore’; and
between 5.0 Lakhs to 10.0 Lakhs under sub-scheme ‘Tarun’. Loans taken do not require
collaterals. These measures are aimed at increasing the confidence of young, educated or skilled
workers who would now be able to aspire to become first generation entrepreneurs; existing small
businesses, too, will be able to expand their activates. As on 20.08.2021, Rs. 16,22,203 crores
sanctioned in 30.7 crores accounts.

6. Stand Up India Scheme

Government of India launched the Stand Up India scheme on 5th April, 2016. The Scheme
facilitates bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/
Scheduled Tribe borrower and at least one Woman borrower per bank branch for setting up
greenfield enterprises. This enterprise may be in manufacturing, services or the trading sector
activities allied to agriculture. The scheme which is being implemented through all Scheduled
Commercial Banks is to benefit at least 2.5 lakh borrowers. The scheme is operational and the
loan is being extended through Scheduled Commercial Banks across the country.

Stand Up India scheme caters to promoting entrepreneurship amongst women, SC & ST category
i.e those sections of the population facing significant hurdles due to lack of advice/mentorship as
well as inadequate and delayed credit. The scheme intends to leverage the institutional credit
structure to reach out to these underserved sectors of the population in starting greenfield
enterprises. It caters to both ready and trainee borrowers.

To extend collateral free coverage, Government of India has set up the Credit Guarantee Fund for
Stand Up India (CGFSI). Apart from providing credit facility, Stand Up India Scheme also
envisages extending handholding support to the potential borrowers. It provides for convergence
with Central/State Government schemes. Applications under the scheme can also be made online

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 on the dedicated Stand Up India portal(www.standupmitra.in). As on 23.08.2021, Rs. 26,688 crore
has been sanctioned in 1,18,462 accounts.

5.Pradhan Mantri Vaya Vandana Yojana

The ‘Pradhan Mantri Vaya Vandana Yojana (PMVVY) has been launched by the Government to
protect elderly persons aged 60 years and above against a future fall in their interest income due to
uncertain market conditions, as also to provide social security during old age. The scheme is
implemented through the Life Insurance Corporation of India (LIC) and open for subscription
upto 31st March, 2023.

PMVVY offers an assured rate of return 7.40% per annum for the financial year 2020-21 for
policy duration of 10 years. In subsequent years, while the scheme is in operation, there will be
annual reset of assured rate of return with effect from April 1st of the financial year in line with
applicable rate of return of Senior Citizens Saving Scheme(SCSS) upto a ceiling of 7.75% with
fresh appraisal of the scheme on breach of this threshold at any point.

Mode of pension payment under the Yojna is on a monthly, quarterly, half-yearly or annual basis
depending on the option exercised by the subscriber. Minimum purchase price under the scheme is
Rs. 1,62,162/- for a minimum pension of Rs. 1000/- per month and the maximum purchase price
is Rs. 15 lakh per senior citizen for getting a pension amount of Rs. 9,250/- per month.

 The Financial Education Programme for Adults (FEPA) was launched by the NCFE in the month of
September 2019. FEPA is a Financial Literacy Programme designed and implemented to spread
financial awareness among the adult population such as Farmers, Women groups, Asha Workers,
Anganwadi Workers, Self Help Groups, Employees of Organization, Skill Development Trainees
etc., This programme is conducted in line with the targets of National Strategy for Financial
Education and the focus have been given to Special Focused Districts (SFDs). This programme
expects to substantially contribute to NCFE’s vision of a “Financially aware and empowered
India”.

1.11. STATUS WITH REFERENCE TO MUMBAI CITY

In Mumbai, where financial opportunities and complexities abound, individuals who seek an advanced
level of financial literacy can explore specialized courses, certifications, and mentorship programs to
enhance their financial expertise. Being well-versed in these intricate aspects of finance can lead to more
informed decision-making and greater financial security in the city's dynamic environment.

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1. Stock Market Awareness:
Understanding the functioning of stock exchanges like BSE and Misunderstanding the various stock
market indices like Sensex and Nifty and how they reflect market performance. Learning about equity
markets, including different stock segments such as large-cap, mid-cap, and small-cap.G Navigating
international legal frameworks, such as taxation agreements and cross-border regulations. Rasping
technical and fundamental analysis techniques for stock selection.

2. Real Estate:
Examining micro-market trends within Mumbai to identify potential investment hotspots. Knowledge of
property appreciation rates and factors affecting them, such as infrastructure development. Legal
intricacies, including property titles, land use regulations, and tenant-landlord laws.

3. Banking and Investment Products:

Familiarity with digital banking services, including mobile apps, internet banking, and UPI transactions.
In-depth knowledge of various investment products like government bonds, corporate bonds, and
debentures. Understanding the risks and returns associated with different asset classes, including equities,
debt, and commodities.
4. Taxation:
Mastery of income tax planning strategies, including tax-saving investments and deductions. Expertise in
filing income tax returns and compliance with tax regulations. Understanding international taxation for
individuals with global income.

5. Budgeting:
Advanced budgeting techniques such as zero-based budgeting or envelope budgeting. Implementing
financial tracking tools and software for detailed expense analysis. Creating contingency funds for
emergencies and unplanned expenses.

6. Insurance:
In-depth understanding of policy riders and customization options in insurance plans. Analyzing claim
settlement ratios and the reputation of insurance companies. Knowledge of health insurance portability
and its advantages.

7. Financial Planning:
Utilizing financial modeling tools to simulate different investment scenarios. Constructing a diversified
investment portfolio aligned with risk tolerance and financial goals. Incorporating tax-efficient strategies
into long-term financial plans.

25
8. Debt Management:
Strategies for debt consolidation and refinancing to optimize interest payments. Understanding credit
scores and methods to improve creditworthiness. Advanced debt repayment strategies, such as the debt
snowball or avalanche method.

9. Digital Literacy:
Protecting against cybersecurity threats, including phishing and identity theft. Staying updated on the
latest fintech innovations and financial apps. Incorporating two-factor authentication and other security
measures into digital financial activities.

10. Financial Workshops and Seminars:

Attending specialized workshops on topics like algorithmic trading or real estate investment analysis.
Engaging with industry experts and networking with fellow finance enthusiasts. Participating in
hackathons or fintech competitions to apply financial knowledge practically.

11. Distance to Services:

Physical distance to financial institutions can discourage rural residents from seeking out these services.
Long travel times to reach a bank or attend a financial workshop can be a significant deterrent, resulting
in missed opportunities for financial education and support.

12. Language and Literacy Barriers:

Some rural populations may face language or literacy barriers, which can make it difficult for them to
engage with financial materials or resources. This can further impede their ability to grasp financial
concepts and make informed decisions.

13. Resource Allocation:

Limited resources for financial literacy initiatives in rural areas can mean that programs are not as
comprehensive or frequent as needed to drive meaningful change. Adequate funding and staffing are
essential to ensure that financial education efforts are effective and sustainable in rural communities.

1.12. STATUS WITH REFERENCE TO WORLD

Financial literacy on a global level empowers individuals to make informed decisions about their
finances, engage in responsible financial behavior, and contribute to economic stability and prosperity
worldwide. It is not only about personal financial success but also about participating in and influencing

26
the broader global financial system. Here are some key aspects of financial literacy in the context of the
world:

1. Basic Financial Education:

Understanding fundamental financial concepts such as budgeting, saving, and the time value of money is
crucial for everyone, regardless of location. These skills form the foundation of financial literacy. It like
understanding the importance of an emergency fund to cover unexpected expenses.

2. Global Economic Awareness:

Being aware of global economic trends, international trade, and economic indicators like GDP, inflation,
and unemployment rates helps individuals make informed decisions in a globalized world. Knowledge of
exchange rates, trade agreements, and global economic organizations like the IMF and World Bank

3. Investment and Asset Management:

Knowledge about various investment options, including stocks, bonds, real estate, ETFs, mutual funds
and cryptocurrencies, allows individuals to grow their wealth and plan for the future wisely. The
diversification strategies to mitigate risk and optimize returns in a global investment portfolio.

4. Banking and Financial Services:

Familiarity with banking services, digital payments, and fintech innovations enables people to manage
their money efficiently and securely. Also knowledge of international money transfer methods and
associated

5. Debt Management:

Understanding different types of debt, interest rates, and responsible borrowing helps individuals avoid
debt traps and make informed decisions when taking on loans. Advanced debt repayment strategies,
including debt consolidation and negotiation.

6. Retirement Planning:

Knowing how to plan for retirement, including the use of retirement accounts and pension schemes, is
vital to ensure financial security in old age. Sophisticated retirement planning techniques, including
annuities, tax-efficient withdrawal strategies, and long-term care planning. Knowledge of international
retirement systems and social security benefits.

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7. Taxation:

Understanding tax systems, tax planning, and compliance with tax laws is essential to avoid legal issues
and optimize tax benefits. Can plan strategies for minimizing tax liability through legal means like tax
credits and deductions.

8. Insurance:

Knowledge of insurance types and their significance in protecting against financial risks, such as health
issues, accidents, and natural disasters. In-depth understanding of complex insurance products like
international health insurance and liability coverage. Knowledge of insurance laws and regulations in
multiple countries.

9. Sustainable Finance:

Awareness of sustainable and responsible investment practices helps individuals make financial choices
that align with environmental and social values. Detailed knowledge of environmental, social, and
governance (ESG) criteria for responsible investing. Awareness of green bonds, impact investing, and
sustainable investment funds.

10. Financial Inclusion:

Promoting access to financial services for underserved populations worldwide is a critical aspect of global
financial literacy. This includes ensuring that marginalized communities have opportunities for financial
education and inclusion. Supporting microfinance initiatives and financial education programs in
developing countries.

11. Cybersecurity:
In the digital age, understanding online financial security and protecting against cyber threats, such as
fraud and identity theft, is paramount. Advanced knowledge of cybersecurity best practices, encryption,
and secure online financial transactions. Staying updated on evolving cyber threats and fraud prevention
techniques.

12. Global Financial Literacy Initiatives

Many international organizations and governments run financial literacy programs and campaigns to
improve financial education on a global scale. Awareness of these resources is essential for individuals
seeking to enhance their financial knowledge.

13. Cultural and Legal Context

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Recognizing that financial practices and regulations can vary greatly from one country to another is
important for individuals involved in international financial transactions or investments. Navigating
international legal frameworks, such as taxation agreements and cross-border regulations.

14. Ethical Financial Practices:

Understanding ethical considerations in finance, such as avoiding unethical investments or supporting
ethical banking practices, is becoming increasingly important to many individuals. Integrating ethical
considerations into investment decisions, such as avoiding investments in companies with poor ethical
records. Supporting ethical banking institutions and socially responsible investment funds.

1.13. DRAWBACKS
Financial literacy is combining financial knowledge with attitudes, skills, and behaviors, which are
essential to make a financial decision based on personal conditions. It helps improve your financial well-
being. Undoubtedly, being financially literate will support in influencing financial decisions. The ability
to make financial decisions and improve financial well-being are two confusing aspects according to the
definition of financial literacy.

Concepts defining financial literacy have failed to highlight the financial issues associated with the
complex financial environment. As per the financial literacy, anyone can be considered financially
illiterate for not having enough skills or knowledge about finances. It has been seen that people who have
low incomes carry the same behaviors, biases, weaknesses, and attitudes compared to those suffering
from personal and stressful situations.

Being financially literate becomes difficult for people living in poverty to change their financial
conditions. Financial assets may also affect people who earn less adversely as it falls into the ‘bank fee
poverty trap.’ This trap is because they do not own any loans, or they have minimum bank balances to
give up.

Problems with the Concept of ‘Financial Literacy’

1. Culture
Following certain cultures will enable individuals to become financially literate. Financial literacy
does not determine how others are affected when an individual makes a financial decision, such as
supporting a local store that will open opportunities for employment by creating ample benefits
specifically for the community. Whereas shopping online is more likely to be a significant
financial decision, but it will produce adverse effects on those who are running physical stores. It
is essential to highlight the influences of financial decision making and how others are affected

29
 according to the definition of financial literacy. It includes cultural and personal values,
socioeconomic status, life stages, professional associations, educational level, media, and much
more.

2. Financial Dilemmas
Financial literacy is an individual’s capacity to gain more knowledge by reflecting on the critical
consequences of financial decisions. These are “financial dilemmas,” which include stressful
situations such as sudden expenses or unemployment. People with low income turn out to be the
“best budgeters.” It is mainly due to the implementation of their practiced survival skills. For
instance, if there is an option to either pay rent or feed the family, then an individual’s financial
decision may be conflicted. It is not a “lack of financial literacy” that affects decisions. Instead,
low-income families have a stronghold over their financial matters. It is necessary to expose
financial limitations, as it will allow implementing concepts of financial literacy per the original
context

3. Education
Another main issue related to financial literacy is that only 17 states are providing financial
education. Schools must give essential life lessons about financial skills to youngsters. This
education will help them to monetize labor and manage their assets efficiently. There is a definite
need for programs comprised of financial literacy skills to be offered to students to learn how to
manage and implement their finances appropriately.

4. Complex Financial Products:

The financial industry continually innovates with complex products like credit default swaps,
collateralized debt obligations, and leveraged exchange-traded funds. These products often
involve intricate mathematical models and a deep understanding of market dynamics. While
financially literate individuals might comprehend the basics, grasping the nuances and risks of
these products can be exceedingly challenging. This complexity can lead to risky investments or
reliance on financial advisors who may not adequately explain the products' intricacies or
potential downsides.

5. Privacy and Security Concerns:

In an era of digital financial transactions, individuals face increasing risks related to privacy and
security. Cyberattacks, identity theft, and financial fraud are ever-present threats. Financial
literacy programs may not equip individuals with the technical skills or knowledge needed to
protect their financial information from these risks or navigate online financial systems securely.

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6. Limited practical application:
Limited practical application: Even having knowledge about financial concepts, individuals may
struggle to apply that knowledge effectively in their day-to-day financial decisions. This can be
attributed to various factors, such as behavioral biases, lack of financial resources, or complex
financial situations. It's important to bridge the gap between knowledge and action to ensure that
financial literacy translates into positive financial behavior.

7. Behavioral challenges:
People often face behavioral challenges that can hinder their ability to make optimal financial
decisions. Behavioral biases, such as impulsivity, emotional decision-making, or the influence of
social norms, can lead to suboptimal financial choices, even with a good understanding of
financial concepts. Overcoming these biases requires self-awareness, discipline, and ongoing
efforts to develop healthy financial habits.

8. Distance to Services:
Physical distance to financial institutions can discourage rural residents from seeking out these
services. Long travel times to reach a bank or attend a financial workshop can be a significant
deterrent, resulting in missed opportunities for financial education and support.

9. Language and Literacy Barriers:

Some rural populations may face language or literacy barriers, which can make it difficult for
them to engage with financial materials or resources. This can further impede their ability to grasp
financial concepts and make informed decisions.

10. Resource Allocation:

Limited resources for financial literacy initiatives in rural areas can mean that programs are not as
comprehensive or frequent as needed to drive meaningful change. Adequate funding and staffing
are essential to ensure that financial education efforts are effective and sustainable in rural
community

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 2. LITERATURE REVIEW

Agarwalla, Barua & others (2013) mentioned in their working paper that the level of financial literacy among
the working youth in urban India is not satisfactory. Among the three dimensions namely financial
knowledge, behaviour and attitude, financial knowledge got the lowest score. Despite the high education
level of the respondents, that does not translate into adequate financial literacy. Researchers suggested
including relevant material on financial literacy in the general education program of schools and college

Dhruv Vij (2020) in his research paper ‘Financial literacy: a comparison between the youth of India and
USA’ stated that only 50% of the Indian population knew in detail about the concept of interest and inflation
rates. His 15 recommendations include that to improve financial literacy, governments, banks, and the
financial services industry should all come forward to create an environment where young people will take
more interest in knowing about various aspects of financial matters.

Jyoti Gupta and Manish Madan in there research paper ‘AN EMPIRICAL STUDY ON FINANCIAL
LITERACY LEVEL OF SALARIED FEMALES IN DIGITAL ERA’ financial attitude, financial behaviour
and financial knowledge these three variables were analysed to determine the level of financial literacy
among working women in contemporary digital era. Females are more prone to get effected by variety of
financial instruments as a consumer, if not enough Financial Literate. Females comprise of major portion of
workforce and potential consumers, therefore it is essential for them to be financially literate. Financial
literacy is a composition of financial attitude, financial behaviour and financial Knowledge of an individual.
These three variables are significantly positively correlated with the Financial literacy score of an individual,
as concluded by this study. Also the average financial literacy score of females who are salaried in Delhi is
only 5.24, in fact some reported the lowest score below 2. It is a matter of concern for the economy that in a
capital region, the females who are considered confident and educated, are scoring below 6 out of the score
of 9 in financial literacy assessment. It can be concluded that government should initiate few more steps in
this direction, so that the maximum and efficient use of financial markets and its instruments will be possible.

Lusardi, A., Mitchell, O., & Curto, V. (2009). Financial Literacy among the Young: Evidwnce and Implications for
Consumer Poilcy .In this research paper they examined financial literacy among the young using data from the 1997
National Longitudinal Survey of Youth. They showed that financial literacy is low among the young; fewer than one-

32
third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is
strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-

educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know
about risk diversification than a female with less than a high school education whose parents were not wealthy. These
findings have implications for consumer policy. They found that financial literacy was severely lacking among young
adults; only 27% of young adults know about inflation and risk diversification and can do simple interest rate
calculations. Moreover, women proved to be the least financially literate. Sex differences between women and men
persisted even after accounting for many demographic characteristics, family background characteristics, and peer
characteristics. There study also found an important channel through which young adults acquire financial knowledge:
parents

B, Balanagalakshmi & Kumari, Sukhavasi & Sundar, Itikela Shyam. (2022). A Study on the Financial
Literacy and its Impact on Financial Inclusion (With reference to Undergraduate Students in Hyderabad
City). 10.21203/rs.3.rs-1670694/v1. This study explored the impacts of financial literacy on financial access
over and done with banking access and fin tech using the data collected from questionnaire through
undergraduate students in Hyderabad city. Researcher has employed regression model to scrutinize whether
financial literacy significantly affects financial accessibility for the undergraduate students. The experiential
findings exhibited that knowledge regarding various financial services factors had significant impacts on
getting financial access. Variables such as age, income level of parents, knowledge regarding depositing and
withdrawing money, and knowledge regarding interest rate, FT account, FT training, FT bill pay, FT software
use etc. affected the overall access to finance. it is concluded that some of the factories in banking which we
have considered for the study like knowledge of loan and interest, knowledge of security money and
knowledge of bank instalment and Financial Technology factor like FT bill pay and FT online deal has
significant impact on acing bank account and Fin Tech Account.

Gala, S. Financial Literacy Among the Youth: The First Step to Financial Indepandence. (Vol. 10)This paper
focuses on the financial literacy of the youth in MMRDA as they are likely to spend more and save less
compared to other age groups. 205 respondents were approached from Mumbai, Thane & Navi-Mumbai via
online structured questionnaire, with objectives to study the awareness and misconceptions about financial
literacy. Researcher found that though most of the youth have theoretic knowledge but they lack in practical
aspect. Researcher strongly suggests that governments and education institutions should take more initiative
to inculcate savings habits and awareness about
the management of finance among all the students

33
Gupta, J., & Madan, M. An Emprirical Study on Financial Literacy Level of Salatied Females in Digital Era.
Agarwalla et al. (2013) concluded that socio demographic factors influence the financial literacy of
Individuals. The demographic factors which were studied and relationship determined were Gender, Age,
Marital Status, Financial Decision Making Process, Budgeting of expenditure, Joint
family (Family composition), Mother’s education and Family financial situation. The results drawn were
similar to other studies that socio demographic factors influence the financial literacy of Individuals. The
demographic variables which were found to be relevant from the point of view of this study on financial
literacy were gender, age, race, and marital status, number of children under 18 living in the household,
monthly income, employment status, assets and debt. But as the information about the assets is difficult to
obtain therefore the question asked was that whether respondent owns a house or not. The study done by
Aggarwalla et al. (2013) examined the relationship between three dimensions of Financial Literacy and found
positive relationship between Financial Behaviour and Financial Knowledge, however the study reflected
negative relationship between Financial Attitude and Financial Behaviour, which was contrasting and
unexpected. They found that financial knowledge and Financial Planning are closely related. It has been
investigated that those individuals who displayed higher level of financial literacy are found to be in a habit
of planning There was also a study which revealed that the respondents scored very low in literacy scales and
financial numeracy. Moreover, less participation in stock market is observed from those respondents who are
less financially literate. The results imply that policy measures to increase financial education can improve
financial literacy and thereby have a positive impact on savings. This suggests that programs to strengthen
financial literacy can exert a significant and positive

Gala, D. S. (2022). Financial Literacy Among The Youth: The First Step To Financial
Independence. (Vol. 10, 11) in this paper it focuses on the financial literacy of the youth in MMRDA as they
are likely to spend more and save less compared to other age groups. 205 respondents were approached from
Mumbai, Thane & Navi-Mumbai via online structured questionnaire, with objectives to study the awareness
and misunderstandings about financial literacy. The researcher found that though most of the youth have
theoretic knowledge but they lack in practical aspect. The researcher strongly suggested that governments
and education institutions should take more initiative to teach savings habits and awareness about the
management of finance among all the students.

34
Lusardi, Annamaria & Mitchell, Olivia & CURTO, VILSA. (2010). Financial Literacy Among the Young.
Journal of Consumer Affairs. 44. 358 – 380 in their research paper they examined financial literacy among
the young using data from the 1997 National Longitudinal Survey of Youth. They showed that financial
literacy is low among the young; fewer than one-third of young adults possess basic knowledge of interest
rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic
characteristics and family financial sophistication. They found that financial literacy was severely lacking
among young adults; only 27% of young adults know about inflation and risk diversification and can do
simple interest rate calculations. Women were proved to be the least financially literate.

Lusardi , A. (2008). Financial Literacy An Essetial Tool for Informed Consumer Choice.This paper proves
common financial illiteracy among the U.S. population, particularly among specific demographic groups.
Those with low education, women, African-Americans, and Hispanics display particularly low levels of
literacy. Financial literacy impacts financial decision-making. Failure to plan for retirement, lack of
participation in the stock market, and poor borrowing behavior can all be linked to ignorance of basic
financial concepts. While financial education programs can result in improved saving behaviour and financial
decision-making, much can be done to improve these programs’ effectiveness.

This study measured financial literacy levels among high school students in India and found low levels of
performance on standard measures of financial literacy. The percentage correct score on the basic financial
literacy questions was 45% and on the sophisticated financial literacy questions the score was 44%. Financial
literacy levels in India were found to be lower than those in developed countries. Gender differences were
found, with females beating males, different to findings in developed countries. Students who pursued the
commerce/economics stream of education were found to have higher levels of financial literacy than students
pursuing the science stream. Results showed that students, in spite of having high levels of skill, were unable
to transfer that knowledge to do financial computations. Parent involvement was also found to have a
significant influence on financial literacy. Interviews with students highlighted the fact that understanding of
societal and macroeconomic impacts of financial literacy was low. These findings lend support for high
school financial education which involves parents and stresses practical hands-on application, societal and
macroeconomic impact, as a means of improving financial literacy. The results from this study give
educators, policy makers, curriculum designers, and finance professionals an awareness of the level of
financial literacy among high school students in India.

35
Falak Khan, Dr. Muhammad Ayub Siddiqui & Dr Salma Imtiaz (2023) Role of financial literacy in achieving
financial inclusion: A review, synthesis and research agenda, Cogent Business & Management This paper
carries out a planning and content analysis by collecting studies at the intersection of financial literacy and
financial inclusion from a sample of 10,091 studies spread over the last 45 years and conducted on a sample
of more than 850,000 individuals worldwide. We find that the number of studies increases; by fields, Finance
and Economics dominate the literature; by countries, most studies come from developed countries, in
particular the US; by authors, citations are skewed and by measures; studies are moving from non-functional
measures to functional measures .They have concentrated their investigations on creating research questions
in consideration of the UFA 2020 program and have attempted to generalize their recommendations based on
their results.

Jindal, M. (2020). International Journal of Financial Management and Economics. The purpose of this
research paper is to study the financial literacy and investment behaviour of working as well as non-working
women. From the study it may be concluded that there is a need for conducting financial literacy programs
for women in order to develop an understanding of investment and taking effective investment decisions. The
study shows that majority of the women were investing their money in investment instruments by taking help
of their family and friends. The study also reveals that the most of women are still lagging behind in taking
financial decisions.

Tiwari, C., Krishnan, S., Kaur, D., & Pal, A. (2020). Promoting Financial Literacy through Digital Platforms:
A Systematic Review of Literature and Future Research Agenda. (2nd ed., Vol. 7).This paper is an attempt to
systematically study, review and explore the existing literature in the area of online financial literacy. It
outlines the roles played and impact generated by electronic platforms in imparting financial literacy through
the use of technology. Achieving financial literacy through online mode is dependent on the digital literacy of
the individual along with prior knowledge and experience of the subject. It has been observed that available
digital platforms or systems accessible through electronic devices such as computer, desktop, laptop,
smartphones etc. has significantly improved the financial learning experience of the users.

Tiwari, C., Krishnan, S., Kaur, D., & Pal, A. (2020). Promoting Financial Literacy through Digital Platforms:
A Systematic Review of Literature and Future Research Agenda. (2nd ed., Vol. 7)This paper throws light on

36
various measures taken by the regulatory bodies of India for the improvement of financial inclusion and
financial literacy among the individuals and also to understand the importance of financial literacy among the
individuals in the country. Suggestions that can improve the level of financial literacy can be adding basic
concepts relating to financial literacy in the school curriculum so that a child can lean the concept at very
young age and teach the parents in case parents are illiterate. Advanced concepts of financial literacy can be
added in the higher education curriculum that will make students to have in depth knowledge on financial
products that can help to have effective and efficient financial planning. Regulatory bodies can have
periodical verification on their initiatives. According to change in the requirement of the economy
government

t can initiate innovative policy regarding financial literacy and financial inclusion that can result in achieving
stable economy in our country.

They found that the main determinants of financial literacy are the educational level, income, age, and
occupational status and that both financial literacy and general education levels are related positively and
significantly to savings behavior and financial inclusion.The results imply that policy measures to increase
financial education can improve financial literacy and thereby have a positive impact on savings. This
suggests that programs to strengthen financial literacy can exert a significant and positive macroeconomic
impact

Klatt. M. (2009) [2] conducted a study on An Assessment of Women's Financial Literacy. Study found that
there are some barriers that women face in regards to financial matters, and showing that women are not
participating fully in retirement planning and not as comfortable as men in seeking financial advice.

Chijwani. M. et al. (2014) [3] conducted a study of financial literacy among working women in Pune. The
study found that the most popular investment avenue among the females interviewed is systematic
investment plan.

D'Ancona. E. L. (2014) [4] conducted a study on Financial Literacy and Financial Inclusion of Women in
Rural Rajasthan- a Case Study of the Indian School of Microfinance for Women’s Financial Education
Project. This study found some significant social benefits from the MEDP Training including negotiating

37
power and increased status of women within their communities. This study was based on variables like
Literacy, knowledge of financial terms and work schedule

Lusardi A. (2006) [1] conducted a study on Planning and Financial Literacy: How Do women Fare? Study
found that women had little financial literacy, retirement calculation was not an easy task particularly for
women and they are much more rely on family, friends and advisers for their financial planning.

Huddleston and Danes (1999) examined the impact of a high-school financial planning program on a national
sample of students in the USA. They found that teaching personal finance (PF) in high schools can increase
financial knowledge and have a positive impact on both teenage financial behaviour and subsequent
behaviour as adults.

Chatzky (2002), when commenting on the PF education of American teenagers, agreed that the majority are
not getting such education, but even those that are being exposed to money matters do not appear to retain
much of the content. She relied on evidence that the average high-school senior was able to answer only 50%
of 31

Jump$tart Coalition for Personal Financial Literacy multi-choice PF questions correctly, whilst students who
had completed a money-management course were only able to answer 48% correctly. After investigating
what may have ‘gone wrong’ with the program, she suggested the following: PF education does not have ‘a
home’ in US schools and high school is too late to start to teach it

Huston, S. (2010). Measuring Financial Literacy. (2nd ed., Vol. 44, 21) This article summarizes the broad
range of financial literacy measures used in research over the last decade. An overview of the meaning and
measurement of financial literacy is presented to highlight current limitations and assist researchers in
establishing standardized, commonly accepted financial literacy instruments.Creation of financial education
programs designed specifically to enhance financial literacy has been viewed as a solution to mitigating
financial problems that individuals and families face. However, the literature offers mixed evidence that
education provides measurable benefits. Some research suggests that financial education does not have a
significant effect on improving financial knowledge scores of high school students in the United States. In

38
contrast, other studies support a relationship between financial education, financial literacy and positive
financial outcomes.

The purpose of this paper is to analyse the level of financial literacy among youth in the world based on
previous studies. The study, particularly, focus at how socio economic and demographic factors such as age,
gender, marital status and income influence financial literacy level of youth and whether there is any
interrelationship between financial knowledge, financial attitude and financial behaviour. Strong endeavour
of the world economies to improve the financial well-being of their citizens has contributed to the rising
importance of financial literacy as it equips the individuals to take quality financial decisions to enhance their
financial well-being.After going through various studies related to the financial literacy, it has been observed
that financial literacy has been of utmost interest to various researchers, organisations and economies since
last two decades. Strong endeavour of the world economies to improve the financial well-being of their
citizens has contributed to the rising importance of financial literacy for it equips the individuals to take
quality financial decisions to enhance their financial well-being. Orienting households with the benefits of
proficient management of savings products can positively influence their household welfare

Chen, H., & Volpe, R. An Analysis of Personal Financial Literacy Among College Students .
(2nd ed., Vol. 7)This study surveys 924 college students to examine their personal financial literacy; the
relationship between the literacy and students' characteristics; and impact of the literacy on students' opinions
and decisions. Results show that participants answer about 53% of questions correctly. Non-business majors,
women, students in the lower class ranks, under age 30, and with little work experience have lower levels of
knowledge. Less knowledgeable students tend to hold wrong opinions and make incorrect decisions. It is
concluded that college students are not knowledgeable about personal finance. The low level of knowledge
will limit their ability to make informed decisions.It concluded that college students are not knowledgeable
about personal finance. The incompetency will limit their ability to make informed financial decisions. The
purpose of this experimental study was to explore the validity of the research outcomes of Chen and Volpe
(2002) in an Australian context. To this end the study concentrates on determining the level of financial
literacy among Australian undergraduate business students at the University of Western Sydney (UWS).

Wagland, S., & Taylor, S. WHEN IT COMES TO FINANCIAL LITERACY, IS GENDER REALLY AN
ISSUE?. (1st ed., Vol. 3, 13)The study has attempted to investigate all three key components defined by this

39
study as necessary to be considered financially literate. Results indicated that 74% of respondents were able
to correctly answer most questions displaying a reasonable level of general personal financial knowledge.
However, only 53% of all students had an understanding of financial terms and concepts. The results also
indicated that 60% of students were able to make appropriate financial decisions in their best interests. Even
as the findings of this study indicate there is a need to improve financial literacy skills amongst students, the
findings indicated that gender was not a significant factor among Australian students. The study suggest that
further research is required, using a larger sample so as to further develop a more appropriate definition of
financial literacy and additionally provide a possible measurement technique for determining an individual’s
level of financial literacy. The researchers are of the view that with a greater understanding as to level of
financial literacy presently demonstrated by Australians generally, that targeted educational programs could
be designed to improve financial literacy generally for the broader Australian community resulting in
widespread benefits.

This study examines college students overall financial management practices using quantitative and
qualitative data from a multi-state research project. The study investigates how college students acquire
financial knowledge and behaviours and the factors that place some students at greater financial risk than
others. The findings show that parents play a key role in their children’s financial socialization. The results
provide important insight into financial education opportunities for students, parents, campus administrators,
and financial professionals and educators.It concluded that some college students are not managing their
finances well, because they have not adopted the set of recommended practices and another conclusion is that
some “recommended” practices should be modified to more accurately match ways in which college students
responsibly manage their finances

Mahdzan, N.S., Tabiani, S. (2013), „The Impact of Financial Literacy on Individual Saving: An Exploratory
Study in the Malaysian Context”, Transformations in Business & Economics, Vol. 12, No 1 (28), pp.41-55.
This study examines the influence of financial literacy on individual saving in the context of an emerging
market, Malaysia. A survey was conducted on approximately 200 individuals in Klang Valley, Malaysia to
study the relationship under investigation. Other determinants of individual saving were also examined, in
particular, saving regularity, risk-taking behaviour, and socio-demographic characteristics. Results of a Probit
regression revealed that the level of financial literacy had a significant, positive impact on individual saving.
In addition, saving regularity, gender, income and educational level influenced the probability of saving
positively. Results of this study suggest that it is important for policymakers to increase financial literacy of

40
households by implementing various financial education programmes, to further influence saving rates at the
national level. This study has shown the financial literacy is an important determinant of individual saving.
Financial literacy, which is defined as individuals’ knowledge about basic and advanced financial topics, such
as knowledge/computation on interest rate, inflation rate, percentage calculation, stocks, and unit trusts, has
been found to be positively related to the probability of having positive saving amongst individuals, ceteris
paribus. This result, although a preliminary finding from this exploratory research, suggests that if the
government aims to increase saving amongst households, it should increase efforts in promoting financial
literacy through basic educational programs regarding financial issues.

Washington , A. (2013). Financial literacy and financial literacy programs in Australia. (32)The purpose of
this paper is double. First, review the existing evidence on the level of financial literacy in Australia, along
with the posited determinants and potential impacts on consumers and the marketing of financial services.
Second, survey programs currently in place aimed at increasing the level of financial literacy across the
population as a whole and in specific groups set in place by government, industry, community, and workplace
initiatives. The paper includes comments concerned with measuring, assessing and understanding financial
literacy and the purpose, design and evaluation of financial literacy programs. Major reports by financial
institutions and governments and a score of smaller research projects have been completed, all of which
identified the pressing need for improvements in financial literacy for the Australian population as whole and
significant disparities in the level of financial knowledge among certain socioeconomic and demographic
subgroups, particularly, women, the Indigenous, those from non-English speaking backgrounds, low-income
workers, the unemployed, and the young. In response, a large number of government departments and
agencies, businesses and business associations, community groups and workplaces have designed, implanted
and funded financial literacy programs, many targeted at these financially less literate groups.With the many
and varied financial literacy stakeholders in mind, this paper reviewed the existing findings on financial
literacy in Australia, along with its purported determinants and the potential impact on consumers and the
marketing of financial services. The paper also sampled many of the financial literacy programs set in place
by government, industry, community, and workplace initiatives. Clearly, there is much work required of the
many and diverse financial literacy stakeholders in both areas

Nicolini , G., Cude, B., & Chatterjee, S. Financial literacy: a comparative study across
four countries. (17)The purpose was to understand whether factors associated with financial literacy in one
country can be generalized to other countries as well or whether unique national characteristics make it
necessary to examine financial literacy in each country individually. A financial literacy index, based on the
number of correct answers to four multiple-choice questions, was used to test the relevance of country of

41
origin to financial literacy. Results suggest significant differences among countries indicating that there are
national and cultural differences in what households know and need to know about their personal finances.
Policy makers should consider these differences when developing financial literacy assessment tools for their
respective countries. The results suggest varying levels of financial knowledge across the four countries. In
addition, there were inconsistencies in the influence of socio-demographic variables. Adding financial
behaviour variables to the ordered logistic regression model increased the explanatory power of the model in
each country but the socio-demographic variables generally retained their explanatory power. The results
clearly indicate the need to coordinate if not standardize financial literacy assessments across countries.
Asking identical financial literacy questions (with appropriate adjustments for country-specific information,
such as currencies) would facilitate comparison.

Kadoya , Y., Saidur , M., & Khan, R. (2020). What determines financial literacy in Japan?. (19)This study
investigates the factors affecting financial literacy in Japan using data from Osaka University’s Preference
Parameter Study. We examine several demographic, socio-economic, and psychological variables drawn
from the social learning, consumer socialization, and psychological theories of learning. The results indicate
that the demographic factors of gender, age, and education; the socio-economic factors of income and
occupation; and the psychological factor of perceptions of the future significantly affect the level of financial
literacy. The results are robust to different measures of financial literacy and emphasize that social contact
and people’s future orientation can improve financial literacy levels in Japan. The results of their study
suggest that socialization and future orientation have a profound impact on the acquisition of financial
literacy in Japan, which could improve residents’ savings, retirement planning, and investment decisions. In
view of the specialty of financial literacy, policymakers could consider promotion through special programs.
As Yoshino and Yamori (2016) pointed out, financial education programs at the school level are not well
organized and are not taught by specially trained teachers. Therefore, more focus on financial education in
schools is needed. The socialization of financial education through television programs, training programs,
and newspaper articles could also help people learn about finance However, awareness of the need for
precaution in the early stages of life could ensure that people place more importance on the future//Topic -

Beal, D., & Delpachitra, S. (2003). Financial literacy among Australian university students. Economic
Papers: A journal of applied economics and policy, 22(1), 65-78. This research was undertaken as the prelude
to a larger project to determine the financial literacy of the Australian population. The research has found that
financial literacy is not high and this, no doubt, stems from the lack of financial-skills education in high

42
schools. Of the five identified areas of financial skill or knowledge, decision-making skills and knowledge of
insurance appeared to be the least well developed. The weighted average score for decision-making skills
was 47% and for knowledge of insurance was 46%

Boisclair, D., Lusardi, A., & Michaud, P. C. (2017). Financial literacy and retirement planning in Canada.
Journal of pension economics & finance, 16(3), 277-296.In this paper, we draw on internationally
comparable survey evidence on financial literacy and retirement planning in Canada to investigate how
financially literate Canadians are and who does plan for retirement. We find that 42 percent of respondents
are able to correctly answer three simple questions measuring knowledge of interest compounding, inflation,
and risk diversification. This is consistent with evidence from other countries, and Canadians perform
relatively well in comparison to Americans but worse than individuals in other countries, such as Germany.
Among Canadian respondents, the young and the old, women, minorities, and those with lower educational
attainment do worse, a pattern that has been consistently found in other countries as well. In this paper, we
examine financial literacy via responses to questions that have been used in surveys in many other countries.
We report several important findings. First, only 42 percent of respondents in Canada correctly answer basic
questions relevant to personal financial decisions. This is low but not very different from findings in other
countries where the same questions were asked. For example, only 30 percent of American respondents
correctly answered the same questions while 53 percent of German respondents did so. Second, Canada is no
different from other countries when it comes to the groups who know the least: financial literacy is lower
among the young and the old, women, minorities, and those with lower educational attainment. It is also
lower in Quebec and Atlantic provinces and, in particular, low among those speaking French in Quebec.
However, these differences seem mostly due to differences in educational attainment among regions and
language groups. Financial literacy increases with education, but even among those with high levels of
education, for example college‐educated respondents, only 60 percent could

LEORA KLAPPER and GEORGIOS A. PANOS (2011). Financial literacy and retirement planning: the
Russian case. Journal of Pension Economics and Finance, 10, pp 599618 doi:10.1017/S1474747211000503
We examine the relationship between financial literacy and retirement planning in Russia, a country with a
relatively old and rapidly ageing population, large regional disparities, and emerging financial markets. We
find that only 36% of respondents in our sample understand interest compounding and only half can answer a
simple question about inflation. In a country with widespread public pension provisions, we find that
financial literacy is significantly and positively related to retirement planning involving private pension funds

43
Our study contributes to the existing literature by examining the relationship between financial literacy and
retirement preparedness in a relatively understudied and interesting context, i.e., that of a country with a
relatively old and rapidly ageing population, large regional disparities, and emerging financial markets.

Liew, T., Lim, P., & Liu, Y. (2020). DIGITAL FINANCIAL LITERACY: A CASE STUDY OF FARMERS
FROM RURAL AREAS IN SARAWAK. International Journal Of Education And Pedagogy, 2(4), 245-251
This study intends to investigate the DFL among the farmers in Sarawak, a targeted group which are originated from
rural areas. A total of 252 respondents was selected and a questionnaire adapted from Morgan et. al (2019) was
administered to gauge their DFL in terms of four dimensions including knowledge of digital financial products and
services, awareness of digital financial risks, knowledge of digital financial risk control and knowledge of consumer
rights and redress procedures. The findings indicate that the respondents have moderate scores on the knowledge of
digital financial products and services but low scores in the other three dimensions. This suggests that the FinTech
development has left many of the country’s vulnerable people behind. It highlights the needs to promote DFL to
disadvantaged groups via specific initiatives in order to achieve a more inclusive financial and economic development.
The farmers from the rural areas in Sarawak have moderate scores on the knowledge of digital financial
products and services but low scores in the other three dimensions: awareness of digital financial risks,
knowledge of digital financial risk control and knowledge of consumer rights and redress procedures. The
findings suggest that the FinTech development has left many of the country’s vulnerable people behind. It
highlights the needs to promote DFL to disadvantaged groups like the less educated, the elderly and the rural
residents via specific initiatives in order to achieve a more inclusive financial and economic development.
Extensive research to other disadvantaged groups will reveal a clearer picture in order to formulate well-
tailored education strategies.

Kumari, S., & Harikrishnan, A. (2021). Importance of Financial literacy For Sustainable Future Environment:
A Research Among People In Rural Areas With Special Reference To Mandi District, Himachal
Pradesh. International Journal of Engineering, Science and Information Technology, 1(1), 15-19.This paper
is to discuss the importance of financial literacy for sustainable future Environment. It deals with the concept
of financial literacy, sustainable development and to study the respondent demographic profile as well as the
knowledge about financial literacy for sustainable future environment. Proper utilization of funds in saving or
growing the environment is one of major challenge for the economy. Apart from that there is need to provide
awareness through seminar or providing financial education to all the people for both financially well being
as well as for society welfare. Financial literacy seminars promotes the standards for transparency, fairness

44
and customer care in market place that respect the local culture and traditions, pursue a long term vision for
sustainable win win relationships with all the stakeholders

Azeez, A. (2021). Rural-Urban Financial Literacy Divide in India: A Comparative Study of Kerala and Uttar
Pradesh. (Vol. 14, 12)This paper tries to find the rural-urban financial literacy divide based on the primary
data collected from two states of India, namely Kerala and Uttar Pradesh. A total of 400 samples respondents
were taken by using the multi-stage sampling technique. A comprehensive approach for measuring financial
literacy is developed by constructing the Financial Literacy Index (FLI), which comprises financial
knowledge, financial behaviour, and financial attitude. The results concluded with the rural-urban financial
literacy divide findings as the financial literacy in rural areas is consistently lower than in urban. The results
expose the need for a persistent and prolonged intervention from all the stakeholders,including policymakers,
to enhance and sustain financial literacy to accomplish a bright financial decision making by the rural
people.The study shows the association between people residential location in terms of rural and urban and
financial literacy. That is, respondents from the urban area were more financially literate than those from the
rural area. Financial literacy in rural areas is consistently lower and there exists a rural-urban financial
literacy divide.

Gondaliya, V., & Shah, N. (2023). A Stidy of Financial Literacy Amongst the Rural and Urban Areas of Surat
District. (571)This study measuring financial literacy and its relation with familiarity of investment avenues
amongst the household of rural and urban area of Surat district. This study assesses financial literacy using a
financial literacy model used by OECD. It has been modified in accordance with local condition.It is found
that there has been a fair financial literacy among the household of rural and urban area of Surat district.
Respondent is well familiar with all investment avenues except derivative. Overall from the study it is found
that financial literacy is important for investment decision.

MATHIVATHANI, V., & VELUMANI, D. (2014). A Study on Financial Literacy Among Rural Women in
Tamilnadu. (12th ed., Vol. 4, 2) The purpose of this study is to know the level of financial literacy among
women in rural areas of Tamil-nadu. Since we are in a growing global economy in the world financial
awareness and knowledge is very important to everyone, especially for the women.Financial literacy of
marginalized rural women is very low. Development of financial literacy would help the women for better
financial decision making and proper utilization of financial services and products. It would help them for

45
wealth accumulation and financial well being. It will lead to their personal development as well as social
development.

This study is based on the analysis of financial literacy of the women in rural areas of Himachal Pradesh.
This present study is based on primary data and 100 women are taken as the sample of the study and all the
relevant dimensions are being evaluated. The issue of financial literacy of women living in the rural areas, is
an important issue in the present scenario because even in the rural areas women are getting a number of
opportunities in different fields of politics, education, economy and even leadership. If the women are not
financially literate then they will be dependent on male counterpart for finance related matters. Apart from
this, the knowledge of finance related matter will make them confident while using the different financial
services and even they educate the other family members in this respect.

Devi, A. (2016). Financial Literacy Among Women: A Sample Study in the Kampur District of Assam. (2nd
ed., Vol. 4, 4) This paper is an attempt to study the financial literacy level among the women in rural and
urban areas. Attempt has also been made to compare the financial literacy among the working and non-
working women.Financial literacy level among the rural women is much it is found that more working
women are aware of this right in compare to nonworking women which is 88% and 28% respectively. 42%
working women and 62% nonworking women are not aware of the price of essential commodities in the
market

Binod, A. (2019). Financial Literacy among Women in Kerala:a Rural – Urban Comparison. (2nd ed., Vol. 8,
6) This paper is mainly an attempt to analysis the levels of Financial Literacy among Women in Kerala. Also,
the extent of rural – urban difference in financial literacy, the influence of socio-demographic variables on
financial literacy of women in Kerala is studied here. The findings from this study confirm that financial
literacy is composed of a combination of knowledge, skills, and dispositions that appear to be gender-related
and that also appear to be related to access to varying types and levels of financial resources. It was found
from the study that women in Kerala have a reasonably fair level of financial literacy.

46
Gupta, K., & Kumar, S. (2018). Financial Literacy and its Impact on Investment Decisions-A study of Rural
Areas of Himachal Pradesh. (2nd ed., Vol. 8, 1-10)The present study focuses on determining the impact of
financial literacy on investment decision of people living in rural areas of Himachal Pradesh in Shimla
district. The study also measured the relationship between financial literacy and demographic factors like
gender, age, income, education and occupation of the respondents using chi-square test.It is concluded that
there is significant impact of financial literacy on investment decision about financial products namely,
saving account in post office, insurance policy, mutual funds and shares of rural people in Himachal Pradesh.

Sulthana, A., Subrahmanyam, N., & Rao, P. V. (2022). A STUDY OF FINANCIAL LITERACY
AWARENESS AMONG WORKING EMPLOYEES, WITH SPECIAL REFERENCE TO THE
TELANGANA REGION. Journal of Commerce & Accounting Research, 11(1). This paper concentrated on
financial literacy among working employees and to observe how well-resourced they are to take financial
decisions.The conclusion of the study proposes that financial literacy diverges suggestively among
respondents based on several demographic and socioeconomic factors. Financial literacy level is affected by
gender, education, income, and caste,whereas it is not affected by age. All investment avenues, except
marriage and post office schemes, have an impact on financial literacy. Overall, it can be concluded that
financial literacy level is squat among working employees in Telangana and required measures should be
taken by the government to increase awareness about finance-related staples.

Dube, V. S., & Asthana, P. K. (2017). A comparative study on Financial Literacy of Uttar Pradesh with
Central Zone states in India. IOSR Journal of Business and Management (IOSR-JBM), 19(10), 22-27.The
purpose of this study is to find out the financial literacy in Uttar Pradesh in pre financial inclusion scenario
and to make a comparison of Financial Literacy level of Uttar Pradesh with other states in the central zone.It
concluded that the Government should provide impart financial literacy training to different sections of the
society both at the urban and rural areas at more large scale. The Government and financial institutions
should take more initiatives in starting programme to educate people regarding the benefits of financial
planning.

Ambuli, D. T. (2022). A STUDY ON FINANCIAL LITERACY AMONG YOUNGSTERS IN CHENNAI

CITY. Journal of Contemporary Issues in Business and Government, 28(4), 1251-1258. This study identifies
that income, qualification, gender and age affects the level of financial literacy. It also finds out the financial

47
alternatives preferred by youngsters The study done in Chennai city from youngsters concluded that financial
literacy level is above average and government should take the necessary measures to increase the awareness
to the youngsters about financial related matters.

Patel, A. (2018). Study of financial literacy among residents of Gujarat. Pacific Business Review
International, 11(4), 97-106.To achieve objective of financial inclusion, people must be financially literate
first. So to observe the financial literacy of the respondents of Gujarat, particular study is undertaken. Study
revealed that Respondents possess fair financial literacy. This shows that respondents are quite informed and
aware about financial terms, concepts and its working. But the study was confined towards to the major cities
of Gujarat, results of financial literacy test conducted in semi urban areas and villages may differ with this.

Taft.MarziehKalantarie et al (2013) “The Relation between Financial Literacy, Financial Wellbeing and
Financial Concerns” International Journal of Business and Management; Vol. 8, No. 11; 2013 Taft et.al
(2013) stated that the demographic, social and economic components are having a important role to play in
the course of financial literacy. The researcher found that the married men and women gradually become
more financial literate, this may be the result of their regular practice of financial avenues. They also stated
that literacy may result in more appropriate knowledge of financial avenues and the practice of the same and
a literate person is more financially strong than a illiterate person.

Gupta.et al (2014) “A Study of Financial Literacy Among Micro Entrepreneurs in District Kangra”IMPACT:
International Journal of Research I Business Management (IMPACT: IJRBM) ISSN(E): 2321-886X;
ISSN(P): 2347-4572 Vol. 2, Issue 2, Feb 2014, 63-70.

Fatoki Olawale & Olabanji Oni (2014) “Financial Literacy Studies in South Africa: Current Literature and
Research Opportunities” Mediterranean Journal of Social Sciences, ISSN 2039-2117 (online),ISSN 2039-
9340 (print) Vol 5 No 20 pp 409-414Fatoki (2014) the researcher opined that all the government and private
agencies are required to make certain changes in their strategic framework so that the situation can be
improved on the other hand it is very important to gain the attention of people, because if the people are not
motivated they will not take interest in such drives. The research was based on primary data and conducted in
the different provinces of South Africa.

48
Prawitz Aimee.D (2014) “Workplace Financial Education Facilitates Improvement in Personal
FinancialBehaviors”, Journal of Financial Counseling and Planning Volume 25, Issue 1, 2014, pp5-26.stated
that any given person, either from rural or urban background, has to be financially literate so that he or she
will be able to keep the track of own income and expenditure. This study was conducted in Europe and the
sample respondents were from the rural areas

Rasoaisi and Kalebe (2015) analyzed the basic financial knowledge among the students of National
University of Lesotho using the drop and pick method during lecture sessions to fill up the questionnaires.
For selecting the required sample stratified random sampling technique was adopted where each faculty was
treated as a stratum and from each stratum ten students were selected randomly. The analysis revealed that
male students have higher financial literacy level than female students. The reason observed for this finding
was that male students don’t prefer borrowing from informal financial sources. Age was found to have
insignificant impact on the level of financial literacy among the respondents since students on average
belongs to same age category and hence there exist lack of age variation among students

Beal and Delpachitra (2003) conducted empirical research among students at the University of Southern
Queensland (USQ) in Toowoomba, Queensland by presenting e-questionnaire as research instrument which
was pre-tested and revised before finally used to collect the required data. Logistic regression and regression
modelling was done to analyze the data. It was found that financial literacy increases with work experience
and income level. It suggests that people gradually learn to apply financial skills through trial and error. It
was also seen that less risk averse people probably have more financial exposure. Students studying business
studies scored better on financial knowledge test due to their higher level of interest in financial matters.

Bhushan and Medury (2013) determined the financial literacy level of a sample of 516 salaried individuals of
Himachal Pradesh using multistage sampling based on various demographic and socio-economic factors and
found that the financial literacy level of people was low. Financial literacy level was seen to be influenced by
sex, educational attainment, economic condition, employment statu

49
Murmu, B., & Singh, B. (2022). A STUDY OF FINANCIAL LITERACY AMONG THE PEOPLE OF
NORTH EAST INDIA WITH SPECIAL REFERENCE TO MIZORAM. EPRA International Journal of
Economics, Business and Management Studies (EBMS), 9(2), 38-45. The study assessed the financial
literacy of the 200 respondents of Mizoram and its association with various demographic variables was
analysed. The result indicates that majority of the respondents possessed average financial literacy and the
very less percentage of the respondents possess poor financial literacy.The study examines the financial
literacy of the respondents of Mizoram and the result shows that the financial literacy level is moderate. The
result shows that gender, age, income, education, number of family members have no association with the
financial literacy level of the respondents whereas significant association was found between employment
and financial literacy level of the respondents

Gupta, K., & Kaur, J. (2014). A study of financial literacy among micro entrepreneurs in district
Kangra. International journal of research in business management, 2(2), 63-70. The aim of the study is to
assess the level of awareness of financial literacy among the micro entrepreneurs of district Kangra of
Himachal Pradesh. It can be concluded that, to some extent these micro entrepreneurs are lagging behind in
the adoption of formal financial practices. The financial literacy programmes organized by the authorities
should be directed to approach each sector of the society. Apart from households, micro entrepreneurs should
also be targeted and made aware about different alternatives available to benefit them.

Purohit, H., & Chutani, R. (2022). Financial literacy and its effect on financial decisions of households in
Punjab and Haryana State. International Journal of Business and Globalisation, 31(3), 251-271.The attempt
has been made to identify importance of financial literacy in financial system, to examine current global and
Indian scenario regarding financial literacy, steps taken at global level and in Indian context to improve
financial literacy level.It shows that proper steps and awareness campaign have been started by many
countries which has major advanced economies

M., & ARORA, S. (2021). Measuring Financial Literacy Among the Students of Professional
Courses. NLDIMSR Innovision Journal of Management Research, 6-13. The research aims to identify the
level of financial literacy among students in Delhi NCR. The study concluded that at higher education
institutions, there is no substantial significant difference in financial literacy between males and females.The
study concludes that financial literacy is very important in the present scenario. Financial literacy is the

50
ability to comprehend and use a wide range of financial skills, including personal financial management,
budgeting, and investing

Chijwani, M., & Vidyapeeth, D. Y. P. (2014). A study of financial literacy among working women in
Pune. International Journal for Scientific Research & Development, 1(11), 2456-2458. The paper studies the
level of financial literacy among working women in Pune region. The research also aimed at assessing the
knowledge of females towards investment in various financial instruments.Results of the analysis revealed
that most of the females in India do possess certain kind of financial knowledge, but they are still financially
illiterate.Still majority of females are highly ignorant about different investment opportunities in the market
as majority of them do not have a Demat account and who have they do not trade frequently.

Servon and Kaestner (2008) examined whether technological literacy can serve as an entryway to financial
literacy. The article analyzed a demonstration program on information and communication technologies
mounted by a major bank to study the impact. Using both quantitative and qualitative data the study advocate
that through increased financial literacy and less-expensive banking alternatives, Information Technology can
expand access to greater financial freedom for Low and Moderate Income households and poor inner-city
communities.

Barte 2012 assessed the financial skills of fish vendors of Pasil in Philipinnes. Questionnaires and interviews
were conducted of 123 fish vendors selected randomly. Findings of the study indicated that vendors are
lacking in financial skills. A significant number of vendors do not keep record of their transactions and
profits and losses. Vendors are deficient in cash management practices and are confined to high interest loans.

Ramasawmy (2013) assessed the level of awareness of financial literacy among management student. The
study considered four fundamental aspects of financial literacy viz. level and importance, definition and
theories, constraints and measures. Based on the survey performed, it was analysed that there was no impact
of age, gender, language, race and income level on financial education.

Annamari Lusardi (2008) studied on financial literacy among US population and their demographic factors
by measuring basic advance financial literacy and found that low education, women, African-American and
Hispanics have low financial literacy by suggesting financial education programs to improve financial
literacy.

51
Sarah Amisi (2012) analyzed effect of financial literacy on investment decision making by pension 16 funds
managers in Kenya through structured questionnaire and found that financial literacy has significant effect on
investment decision making by fund managers.

Faoziah Haji Idris, K. Sarojani Devi Krishnan, Norfiza Azmi (2013) determined the relationship between
variables of financial literacy and those of financial distress of 430 youths. Result shows that level of
financial literacy and financial distress are moderate. Positive but weak relationship has been found between
financial literacy and level of financial distress. It pointed out the fact that better financial literacy will lead to
higher productivity of work to organization.

Javed Iqbal Bhabha, Shadiullah Khan, Qamar Afaq Qureshi, Abdul Naeem & Irfanullah Khan (2014) aimed
to assess the financial literacy and its impact on saving-investment behaviour of working women in Pakistan
and concluded that working-women in Pakistan are financially illiterate; female workers in Pakistan only
know that they are depositing money in various institutions in order to get more wealth in name of profit but
they are ignorant about the functions and existence of financial markets. It is also concluded that saving-
investment behaviour of working women in Pakistan heavily depends on the financial literacy.

Swati Narula (2015) investigated on demographic factors on financial literacy and variation in decision
making of retail investors from Delhi from responses of 100 respondents through structured questionnaire by
using T test, ANOVA and Friedman Test. They found that respondents have medium level knowledge with
subject to difference in decision making in different time period.

52
 3. RESEARCH METHODLOGY

3.1. INTRODUCTION

It is a systematic and structured approach that researchers use to plan, conduct and analyse their research.
It includes techniques, procedures and guidelines to be followed to gather and interpret data, answer
research question and to check hypothesis.

Research Methodology includes various elements like design of the research, data collection methods,
sampling techniques, source of data, statistical tools and data analysis. Data collection methods is an
integral part of research methodology, covers survey, interviews, experiments, observation, and document
analysis.

Research Methodology involves, to define research problems, framing research questions and design
appropriate study plan. This plan includes selection of research approach like it is Quantitative,
Qualitative or Mixed according to research topic.

3.2. STATEMENT OF PROBLEM

Financial literacy, or the ability to understand and make decisions about personal finances, is a
fundamental life skill. It will allows an individuals to manage their money effectively, save for their
future, and direct the difficulties of the financial world. However, across the globe, there exists a
significant problem of financial illiteracy, which is mainly serious in both rural and urban areas. The
problems arises because of limited access to financial resources, different educational opportunities, and
varying levels of exposure to financial services. This complete problem statement explores into the
difficulties of financial literacy of differences in rural and urban settings.

 The Problems in Rural Areas

In rural area financial literacy faces unique problems like limited access to financial institutions. And also
individual get difficult to get engage with modern financial concepts as they are relayed on traditional or
cash based transactions. As it being a remote area it becomes difficult to reach there with financial
education programmes, and also there will be less educational opportunities. An individual in rural area
can be said as financial illiterate because they are unknown about the basic financial management, like
budgeting, saving and planning for emergencies. They also have no knowledge about how to access or
utilize the financial services.

 The Problem in Urban Areas

53
 In urban area it present different side of the financial literacy problem. The access of individual in
urban areas to financial services is typically more prevalent, they struggle with their own set of
challenges. Complex financial products, high living cost can distract individuals to make informed
financial decisions Newly introduced financial services creates both opportunities and challenges for
the individuals.

 Consequences of Financial Literacy

The consequences of financial literacy are far reaching. In both the urban and rural area, the
individuals who lack with financial literacy experience stress, accumulated debt, improper planning of
budget. This in return triggers the poverty and make worse economic inequality

 Solutions for Rural and Urban Areas

To fill up the financial literacy gap in both rural and urban areas requires solutions. In rural
communities it may include innovative educational programmes. To access the affordable financial
services can be extended through the use of mobile banking. Simple financial products and
regulations can make rural residents easier to get engage with financial system
In urban areas financial educational programmes will target specific groups like young, adult to talk
their unique financial challenges

 Conclusion
The problem of financial literacy in both rural and urban areas are complicated and has wide reaching
implications for individuals

3.3. OBJECTIVES

1. Assessing Financial Knowledge:

Determine the level of financial literacy in both rural and urban areas. This involves evaluating
people's understanding of basic financial concepts, such as budgeting, saving, investing, and debt
management.

2. Analysing Financial Behaviour:

Examine how people in rural and urban areas make financial decisions. This includes
investigating spending habits, saving rates, investment choices, and debt management strategies.

54
3. Evaluating Access to Financial Services:
Assess the accessibility of financial services such as banks, credit unions, and digital financial
tools in rural and urban areas. Explore whether disparities in access contribute to differences in
financial behaviour
.
4. Measuring Financial Inclusion:
Investigate the degree of financial inclusion in both settings. Are certain groups, such as women,
minorities, or low-income individuals, excluded from the formal financial system in one area more
than the other?

5. Identifying Socioeconomic Factors:

Examine how socioeconomic factors, such as income, education, and employment opportunities,
influence financial literacy and behavior in rural and urban settings.

6. Understanding Financial Challenges:

Identify the unique financial challenges and obstacles faced by people in rural and urban areas.
For example, rural areas might have limited job opportunities, while urban areas may have higher
living costs.

7. Assessing the Impact of Policies and Programs:

Evaluate the effectiveness of financial education programs and policies aimed at improving
financial literacy in rural and urban communities.

8. Comparing Financial Outcomes:

Compare financial outcomes between rural and urban residents. This includes indicators like
wealth accumulation, debt levels, retirement savings, and financial security.

9. Developing Targeted Interventions

Based on the findings, develop recommendations and interventions that are tailored to the specific
needs of each setting. For example, if rural areas have lower financial literacy, create educational
programs that address their unique challenges.

10. Promoting Inclusive Economic Growth:

Ultimately, the goal is to use the insights gained from this study to promote inclusive economic
growth and reduce disparities in financial well-being between rural and urban areas

55
3.4. SIGNIFICANCE OF RESEARCH

1. Policy Development:
Understanding the disparities in financial literacy between rural and urban areas can inform the
development of targeted policies and initiatives. Policymakers can tailor financial education
programs to address the specific needs and challenges of each group, potentially improving
overall financial well-being.
2. Economic Development:
Financial literacy is closely linked to economic development. By addressing financial literacy
disparities, policymakers and organizations can help boost the financial stability and economic
growth of both rural and urban communities.
3. Reducing Poverty:
Financial literacy can be a key factor in poverty reduction. Improved financial knowledge can help
individuals and families make better financial decisions, escape cycles of debt, and build assets,
potentially lifting them out of poverty.
4. Financial Inclusion:
Access to financial services is critical for economic participation and growth. Understanding the
differences in access between rural and urban areas can lead to efforts to improve financial
inclusion and expand financial services to underserved populations.
5. Consumer Protection:
A study on financial literacy can highlight the need for consumer protection measures. In some
cases, individuals with low financial literacy may be more vulnerable to financial scams and
predatory practices. Identifying these vulnerabilities can lead to stronger consumer protection
regulations.
6. Social Equity:
Addressing financial literacy disparities contributes to social equity and reduces financial
inequality. By providing individuals in rural areas with the tools to make informed financial
decisions, it promotes a fairer society where everyone has an equal opportunity to succeed
financially.
7. Education Reform:
Research findings can influence educational policies, leading to improvements in financial
education curricula at schools and colleges. This can help young people in both rural and urban
areas develop the financial skills they need for a successful future.
8. Improved Investment and Savings:
Enhanced financial literacy can lead to increased savings rates and better investment choices.
This, in turn, can stimulate investment in local businesses, support entrepreneurship, and
encourage responsible financial planning.

56
 9. Empowering Communities:
Financial literacy empowers individuals and communities to take control of their financial futures.
This empowerment can lead to greater self-reliance, reduced dependency on social safety nets, and
increased economic resilience.
10. Research and Data for Decision-Making:
Research on financial literacy in rural and urban areas provides valuable data for decision-
makers, financial institutions, nonprofits, and educators. This data-driven approach enables
evidence-based decision-making for targeted interventions.
11. Global Perspective:
A comparative study can provide insights into the broader global context, helping policymakers
and organizations understand how the financial literacy challenges in rural and urban areas
compare with other countries and regions.

3.5. RESEARCH METHODOLOGY

1. Descriptive Research:

Our initial step was to conduct descriptive research. This method allowed us to understand the Financial
Literacy of Urban and Rural Area. Surveys and questionnaires were employed to gather comprehensive
data.

2. Secondary Data Analysis:

We also conducted a thorough analysis of secondary data from reports, regulatory guidelines, and ,
aiming to synthesize existing data and identify trends.

3.Literature Review:

A significant aspect of our research involved an extensive literature review. This was pivotal in building a
strong foundation, exploring existing academic papers, reports, articles, and publications related to
financial literacy between urban and rural areas

3.6. RESEARCH UNIVERSE

1. Data Collection Methods:

The research utilizes both primary and secondary data sources. Primary data is collected through
surveys conducted in rural and urban areas, focusing on close-ended questions to gather
quantitative insights. Secondary data includes reputable academic literature, reports, articles, and
publications related to financial literacy.

57
 2. Research Type:
The study primarily adopts a descriptive and analytical research approach. Its aim is to describe
the current state of financial literacy between rural and urban area and analyse.

3. Data Collection Timeline:

Data collection is conducted over a specified period, determined by the research timeline and
resource availability.

4. Sample Size and Sampling Unit:

For the purpose of research, the researcher has decided to contact 100 respondents to answer
research related questions in the form of a structured questionnaire. The sample unit consists of
communities of rural and urban areas.. The respondents are in the age group of under 20 to above
50 years including both males and females.

5. Research Instrument:
A structured questionnaire was adopted as the research instrument for the study.

6. Statistical and Analytical Tools:

The tools that are used for analysing the data are Table, pie charts and Percentages.

7. Population:
It includes individuals from rural and urban areas, aiming for a comprehensive understanding. The
research targets a broad age range, ensuring representation from individuals , aged 31 to 40
(primary focus), and above 50 years old. Specifically, individuals who possess a certain level of
awareness regarding financial literacy.

3.7. DATA NEEDED FOR THE RESEARCH

1. Define Research Objectives and Questions:

Clearly articulate the research objectives and questions that you intend to answer through the study. For
example, you may aim to compare the financial literacy levels between rural and urban populations and
understand the factors contributing to any disparities.

2. Literature Review:

58
Review existing literature and research on financial literacy in rural and urban areas to understand the
current state of knowledge and identify any gaps or areas that need further exploration.

3. Sampling Strategy:

Define your target population (e.g., adults in rural and urban areas) and develop a sampling strategy.
Consider factors like the sample size, randomization, and stratification to ensure that your sample is
representative of the population.

4. Data Collection:

Choose appropriate methods for data collection, which may include: Surveys: Design and administer
surveys to gather information on financial literacy levels, financial behaviours, and access to financial
services. Interviews: Conduct in-depth interviews with a subset of participants to gain qualitative insights.
Observations: Use direct observations, especially for financial behaviors, when applicable.

5. Survey Instrument:

Develop a well-structured questionnaire or survey instrument that includes questions related to financial
literacy, demographics, financial behaviors, access to financial services, and other relevant variables.

6. Data Analysis:

Use statistical software for data analysis. Some common analytical techniques include: Descriptive
statistics: Calculate means, medians, and standard deviations for financial literacy scores. Inferential
statistics: Conduct t-tests, chi-square tests, or regression analyses to identify significant differences and
relationships. Qualitative analysis: Analyse interview transcripts or open-ended survey responses to
extract themes and insights.

7. Quantitative Data Analysis:

Compare financial literacy levels between rural and urban areas, controlling for demographic variables
when necessary. Identify factors that correlate with financial literacy levels, such as education, income,
and access to financial services.

8. Ethical Considerations:

Ensure that your research complies with ethical guidelines, such as obtaining informed consent from
participants and safeguarding their privacy and confidentiality.

59
10. Interpretation of Results:

Interpret the research findings in the context of the study objectives. Discuss the implications of
disparities and the factors contributing to them.

11. Recommendations:

Provide practical recommendations for policymakers, educators, and other stakeholders based on the
study's findings. These recommendations should aim to improve financial literacy in both rural and urban
areas.

3.8. LIMITATIONS OF RESEARCH METHODOLOGY

1. Limited Sample Size: -

As urban and rural area being both a vast area, it’s not possible to cover whole rural and urban area.
Therefore, selective number of respondents were collected from both the areas.

2. Time Constraint:-

The survey was conducted for specific time period because of which data collection and data study
was required complete in that specific time period.

3. Data Collection

The collection of data fror rural area through survey was very diffcuilt as there was people not aware
about the usage of mobile.

4. Data Quality

This information might be missing things or might be a little bit wrong which can make research work
not so accurate

60
 3. Data Analysis and Interpretation:

4.1. Demographic Questions

A. Distribution of Respondents according to Gender :

Gender Number Percentage

Urban Rural Urban Rural

Male 36 10 61.01% 58.82%

Female 23 7 38.99% 41.18%

Total 59 17 100% 100%

Table 4.1

The survey conducted for the financial literacy in rural and urban area included total 76 responses. Out of
which 36 where Male from Urban Area and 23 where Female from Urban Area. In Rural Area Male
population is 10 and Female population is 7. Total Percentage of Male in Urban Area is 61.01% and of
Female in Urban Area is 38.99%%. And in Rural Area Male percentage is 58.82% and Female is 41.18%.

B. Distribution of Respondents according to Age

Age Number Percentage

Rural Urban Rural Urban

20 – 30 Years 4 5 23.52% 8.48%

31 – 40 Years 5 2 29.42% 3.38%

41 – 50 Years 1 8 5.88% 13.55%

51 – 60 Years 4 34 23.53% 57.62%

61 – 70 Years 3 9 17.65% 15.25%

71 and above 0 1 0% 1.69%

Total 17 59 100% 100%

Table 4.2

Out of 76 responses received. 4 are of the 21-30 Years from rural area and 5 from urban area, and in
percentage is 23.52% in rural area and 8.48% in Urban Area. 5 are of the 31-40 from rural area and 2

61
from urban area, and in percentage is 29.42% in rural area and 3.38%. 1 are of the 41-50 from rural area
and 8 from urban area, and in percentage is 5.88% in rural area and 13.55% in urban area. 4 are of the 51-
60 from rural area and 34 from urban area, and in percentage is 23.53% in rural area and 57.62% urban
area. 3 are of the 61-70 from rural area and 9 from urban area, and in percentage is 17.65% in rural area
and 15.25% urban area . 0 are of the 31-40 from rural area and 1 from urban area, and in percentage is 0%
in rural area and 1.69% urban area.

C. Distribution of Respondents according to Qualification

Qualification Number Percentage

Rural Urban Rural Urban

HSC 2 1 11.76% 2.38%

Graduate 7 20 41.17% 47.61%

Post Graduate 6 21 35.29% 50%

Professional 2 0 11.76% 0%

Total 17 42 100% 100%

Table 4.3

Out of 76 responses received HSC are 2 from rural and 1 from urban, and in percentage 11.76% from
rural and 2.38% from urban. Graduate are 7 from rural and 20 from urban, and in percentage 41.17%
from rural and 47.61% from urban. Post Graduate are 6 from rural and 21 from urban, and in percentage
35.29% from rural and 50% from urban. Professional are 2 from rural and 0 from urban, and in
percentage 11.76% from rural and 0% from urban.

62
 D. Distribution of Respondents according to Employment Status

Employment Status Number Percentage

Rural Urban Rural Urban

Employed Full Time 12 40 70.58% 70.17%

Employed Part Time 1 5 5.88% 8.77%

Unemployment 1 3 5.88% 5.26%

Retired 3 9 17.64% 15.78%

Total 17 57 100% 100%

Table 4.4

Out of 76 responses received Employed Full Time are 12 from rural and 40 from urban, and in percentage
70.58% from rural and 70.17% from urban. Employed Part Time are 1 from rural and 5 from urban, and
in percentage 5.88% from rural and 8.77% from urban. Unemployed are 1 from rural and 3 from urban,
and in percentage 5.88% from rural and 5.26% from urban. Retired are 3 from rural and 9 from urban,
and in percentage 17.64% from rural and 15.78% from urban.

E. Distribution of Respondents according to Monthly Family Income

Monthly Family Income Number Percentage

Rural Urban Rural Urban

15,000 – 50,000 6 6 35.29 10.16%

50,000 – 75,000 3 6 17.64% 10.16%

75,000 – 1 lakh 2 9 11.76% 15.25%

1 lakh – 1.5 lakh 1 9 5.88% 15.25%

1.5 lakh – 2 lakh 4 19 23.52% 32.20%

Other 1 10 5.88% 16.94%

Total 17 59 100% 100%

Table 4.5

63
Out of 76 responses received 15,000 – 50,000 are 6 from rural and 6 from urban, and in percentage
35.29% from rural and 10.16% from urban 50,000 – 75,000 are 3 from rural and 6 from urban, and in
percentage 17.64% from rural and 10.16% from urban. 1 lakh – 1.5 lakh are 1 from rural and 9 from
urban, and in percentage 5.88% from rural and 15.25% from urban. 1.5 lakh – 2 lakh are 4 from rural and
19 from urban, and in percentage 23.52% from rural and 32.20% from urban. Others are 1 In rural and 10
in urban, and in percentage 5.88% from rural and 16.94% from urban.

F. Distribution of Respondents according to region

Region Number Percentage

Rural 17 22.37%

Urban 59 77.63%

Total 76 100%

Table 4.6

Out of 76 responses, rural are 17 and in percentage it 22.37%. Urban are 59 and in percentage it is
77.63%

4.2. Topic Related Questions

A. Do you create a budget to manage your monthly expenses ?

Number Percentage

Rural Urban Rural Urban

Yes 15 46 88.23% 77.96%

No 2 13 11.76% 22.03%

Total 17 59 100% 100%

Table 4.7

Out of 76 responses received, Yes are 15 from rural and 46 from urban, and in percentage 88.23% from
rural and 77.96% from urban, No are 2 from rural and 13 from urban, and in percentage 11.76% from
rural and 22.03% from urban

64
 B. How do you decide where to save or invest your money?

Number Percentage

Rural Urban Rural Urban

Based on advice from financial 1 7 6.67% 15.22%

professionals

Based on personal research and 14 39 93.33% 84.78%

knowledge

Total 15 46 100% 100%

Table 4.8

Out of 76 responses received, Based on advice from financial professionals are 1 from rural and 7 from
urban, and in percentage 6.67% from rural and 15.22% from urban. Based on personal research and
knowledge are 14 from rural and 39 from urban, and in percentage 93.33% from rural and 84.78%from
urban

C. What percentage of your income do you typically save or invest?

Number Percentage

Rural Urban Rural Urban

0% 0 1 0% 1.85%

1 – 5% 3 5 18.75% 9.25%

6 – 10% 5 9 31.25% 16.67%

11 – 20% 1 14 6.25% 25.92%

More than 20% 7 25 43.75% 46.29%

Total 16 54 100% 100%

Table 4.9

Out of 76 responses received 0% are 0 from rural and 1 from urban, and in percentage 0% from rural and
1.85% from urban.1 – 5% are 3 from rural and 5 from urban, and in percentage 18.75% from rural and
9.25% from urban. 6 – 10% are 5 from rural and 9 from urban, and in percentage 31.25%from rural and
16.67% from urban. 11 – 20% are 1 from rural and 14 from urban, and in percentage 6.25%from rural and

65
25.92%from urban. More than 20% are 7 In rural and 25 in urban, and in percentage 43.75% from rural
and 46.29% from urban.

D. According to you which of the following is considered a low-risk investment?

Number Percentage

Rural Urban Rural Urban

Saving Account 16 55 94.11% 93.22%

Stock Market 1 4 5.89% 6.78%

Crypto Currency 0 0 0% 0%

Total 17 59 100% 100%

Table 4.10

Out of 76 responses received, Saving Account are 16 from rural and 55 from urban, and in percentage
94.11% from rural and 93.22% from urban. Stock Market are 1 from rural and 4 from urban, and in
percentage 5.89% from rural and 6.78% from urban. Crypto Currency are 0 from rural and 0 from urban,
and in percentage 0%from rural and 0% from urban.

E. What is the recommended percentage of your income to save for future financial goals and
emergencies?

Number Percentage

Rural Urban Rural Urban

0% 0 0 0% 0%

10% 4 12 23.52% 20.33%

15 – 20% 7 24 41.17% 40.67%

20% 6 23 35.29% 38.98%

Total 17 59 100% 100%

Table 4.11

Out of 76 responses received, 0% are 0 from rural and 0 from urban, and in percentage 0% from rural and
0% from urban. 10% are 4 from rural and 12 from urban, and in percentage 23.52% from rural and

66
20.33% from urban. 15 – 20% are 7 from rural and 24 from urban, and in percentage 41.17% from rural
and 40.67% from urban. 20% are 6 from rural and 23 from urban, and in percentage 35.29% from rural
and 38.98% from urban area.

F. What is your planning for unexpected medical emergency?

Number Percentage

Rural Urban Rural Urban

To build an emergency fund specifically for medical 1 8 5.88% 13.55%

expenses

To purchase health insurance coverage 13 45 76.47% 76.27%

Researching and understanding available healthcare 0 4 0% 6.77%

insurance

To consult with a financial advisor to create a 3 2 17.64% 3.38%

comprehensive plan

Total 17 59 100% 100%

Table 4.12

Out of 76 responses received, To build an emergency fund specifically for medical expenses are 1 from
rural and 8 from urban, and in percentage 5.88% from rural and 13.55% from urban. To purchase health
insurance coverage are 13 from rural and 45 from urban, and in percentage 76.47% from rural and
76.27% from urban. Researching and understanding available healthcare insurance are 0 from rural and 4
from urban, and in percentage 0% from rural and 6.77% from urban. To consult with a financial advisor
to create a comprehensive plan are 3 from rural and 2 from urban, and in percentage 17.64% from rural
and 3.38% from urban area.

67
 G. What is your financial planning for retired life?

Number Percentage

Rural Urban Rural Urban

Saving a portion of my income in a 1 4 5.88% 6.78%

retirement account

Investing in stocks and bonds to grow 3 13 17.64% 22.03%

my retirement savings.

Purchasing a retirement annuity or 1 5 5.88% 8.47%

pension plan

Paying off all outstanding debts before 2 4 14.28% 6.78%

retirement

Downsizing my home or reducing 0 0 0% 0%

living expenses in retirement

All of the above 7 29 41.17% 49.15%

I haven’t started planning for 3 4 17.64% 6.77%

retirement yet.

Total 17 59 100% 100%

Table 4.13

Out of 76 responses received, Saving a portion of my income in a retirement account are 1 from rural and
4 from urban, and in percentage 5.88% from rural and 6.78% from urban. Investing in stocks and bonds
to grow my retirement savings are 3 from rural and 13 from urban, and in percentage 17.64% from rural
and 22.03% from urban. Purchasing a retirement annuity or pension plan are 2 from rural and 4 from
urban, and in percentage 14.28% from rural and 6.78% from urban. Downsizing my home or reducing
living expenses in retirement are 0 from rural and 0 from urban, and in percentage 0% from rural and 0%
from urban area. All of the above are 7 from rural and 29 from urban, and in percentage 41.17% from
rural and 49.15% from urban. I haven’t started planning for retirement yet are 3 from rural and 4 from
urban, and in percentage 17.64% from rural and 6.77% from urban.

68
 H. How will you plan your credit finance?

Number Percentage

Rural Urban Rural Urban

Set a budget and track expenses 7 21 46.67% 34.42%

Research and compare credit option 3 9 20% 14.75%

Consult with a financial advisor 0 9 0% 14.75%

Consider long term financial goals 5 22 33.34% 36.06%

Total 15 61 100% 100%

Table 4.14

Out of 76 responses received, Set a budget and track expenses are 7 from rural and 21 from urban,
and in percentage 20% from rural and 14.75% from urban. Consult with a financial advisor are 0
from rural and 9 from urban, and in percentage 0% from rural and 14.75% from urban. Consider
long term financial goals are 5 from rural and 22 from urban, and in percentage 33.34% from rural
and 36.06% from urban.

I. Do u prefer to borrow money from unauthorized money lenders or legal financial

institution?

C Number Percentage

Rural Urban Rural Urban

Legal Financial Institutions 5 22 29.41% 37.29%

Unauthorized Money Lender 1 0 5.88% 0%

I do not prefer to borrow money 11 37 64.70% 62.17%

Total 17 59 100% 100%

Table 4.15

Out of 76 responses received, Legal Financial Institutions are 5 from rural and 22 from urban, and in
percentage 29.41% from rural and 37.29% from urban. Unauthorized Money Lender are 1 from rural and
0 from urban, and in percentage 5.88% from rural and 0% from urban. I do not prefer to borrow money
are 11 from rural and 37 from urban, and in percentage 64.70% from rural and 62.17% from urban.

69
 J. Do you consider stock market as your investment option?

Number Percentage

Rural Urban Rural Urban

Yes 10 49 58.83% 83.05%

No 7 10 41.17% 16.94%

Total 17 59 100% 100%

Table 4.16

Out of 76 responses received, Yes are 10 from rural and 49 from urban, and in percentage 58.83% from
rural and 83.05% from urban. No are 7 from rural and 10 from urban, and in percentage 41.17% from
rural and 16.94% from urban

K. Have you ever invested in stocks, bonds or mutual funds?

Number Percentage

Rural Urban Rural Urban

Yes 12 55 70.59% 93.22%

No 5 4 29.41% 6.77%

Total 17 59 100% 100%

Table 4.17

Out of 76 responses received, Yes are 12 from rural and 55 from urban, and in percentage 70.59% from
rural and 93.22% from urban. No are 5 from rural and 4 from urban, and in percentage 29.41% from rural
and 6.77% from urban

70
 L. What is your common way to diversify an investment portfolio?

Number Percentage

Rural Urban Rural Urban

Putting all your money in a single stock 1 0 5.88% 0%

Investing only in one industry 0 0 0% 0%

Spreading investments across various 13 59 76.47% 100%

assets classes

Keeping all investing in cash 3 0 17.64% 0%

Total 17 59 100% 100%

Table 4.18

Out of 76 responses received, Putting all your money in a single stock are 1 from rural and 0 from urban,
and in percentage 5.88% from rural and 0% from urban. Investing only in one industry are 0 from rural
and 0 from urban, and in percentage 0% from rural and 0% from urban. Spreading investments across
various assets classes are 13 from rural and 59 from urban, and in percentage 76.47% from rural and
100% from urban. Keeping all investing in cash are 3 from rural and 0 from urban, and in percentage
17.64% from rural and 0% from urban area.

M. According to you, which of the following is considered a high return investment?

Number Percentage

Rural Urban Rural Urban

Saving Account 1 12 5.88% 20.33%

Government Bonds 0 0 0% 0%

Real Estate 3 2 17.64% 3.39%

Stocks 7 41 41.17% 69.49%

I am not sure 6 4 35.29% 6.78%

Total 17 59 100% 100%

Table 4.19

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Out of 76 responses received Saving Account are 1 from rural and 12 from urban, and in percentage
5.88% from rural and 20.33% from urban. Government Bonds are 0 from rural and 0 from urban, and in
percentage 0% from rural and 0% from urban. Real Estate are 3 from rural and 2 from urban, and in
percentage 17.64% from rural and 3.39% from urban. Stocks are 7 from rural and 41 from urban, and in
percentage 41.17% from rural and 69.49% from urban area. I am not sure are 6 from rural and 4 from
urban and in percentage from rural 35.29% and from urban 6.78%.

N. As per you what type of investment carries the most risk but also the potential for the
highest returns?

Number Percentage

Rural Urban Rural Urban

Saving Account 2 0 11.76% 0%

Government Bonds 0 0 0% 0%

Stocks 14 59 82.35% 100%

Certificate of Deposit 1 0 5.88% 0%

Total 17 59 100% 100%

Table 4.20

Out of 76 responses received Saving Account are 2 from rural and 0 from urban, and in percentage
11.76% from rural and 0% from urban. Government Bonds are 0 from rural and 0 from urban, and in
percentage 0% from rural and 0% from urban. Stocks are 14 from rural and 59 from urban, and in
percentage 82.35%from rural and 100% from urban. Certificate of Deposit are 1 from rural and 0 from
urban, and in percentage 5.88% from rural and 0% from urban area.

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 O. Are you aware about online banking and digital financial services?

Number Percentage

Rural Urban Rural Urban

Yes 17 57 100% 96.61%

No 0 2 0% 3.39%

Total 17 59 100% 100%

Table 4.21

Out of 76 responses received, Yes are 17 from rural and 57 from urban, and in percentage 100% from
rural and 96.61% from urban. No are 0 from rural and 2 from urban, and in percentage 0% from rural and
3.39% from urban

P. Are you comfortable using online banking and digital financial services?

Number Percentage

Rural Urban Rural Urban

Yes 16 55 94.12% 93.22%

No 1 4 5.88% 6.78%

Total 17 59 100% 100%

Table 4.22

Out of 76 responses received, Yes are 16 from rural and 55 from urban, and in percentage 94.12% from
rural and 93.22% from urban. No are 1 from rural and 4 from urban, and in percentage 5.88% from rural
and 6.78% from urban

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 CHAPTER – 5: CONCLUSION & SUGGESTION

Conclusion

This research work comprises of comparative study of financial literacy between rural and urban
area. As using questionnaire survey for collecting data the above data is collected for the research
work by the researcher. The above data shows the comparative presentation of the data collected
from rural and urban area on the basis of certain factors.

According to the research conducted, it is concluded that the financial knowledge of rural and urban
area are same a bit, but the implementation of the knowledge in their daily work is not effective as
compared to people staying at urban areas. In rural area there are people who are financial literate but
they can’t take effective decisions. This may happen because not being having knowledge of finance
correctly.

The study proved significant disparities in financial literacy levels between rural and urban areas.
Urban residents generally exhibited higher financial literacy, likely due to better access to formal
financial education and services.

The level of education and income act as significant factors affecting financial literacy. Urban areas
tend to have higher levels of education and income, contributing to improved financial literacy
among their residents as compared to rural areas.

The study suggests that financial education programs should be developed to address the specific
needs of both rural and urban populations. In rural areas, emphasis should be placed on improving
access to financial services, while in urban areas, the focus should be on enhancing financial
education in schools and workplaces.

The study also suggests that there are people living in rural areas who take there financial decisions
by their own, through their financial knowledge and skills. And also plan their budget from their
income.

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The rural area people try to invest their money in the most possible best manner. Even rural area are
knowledgeable about the recent financial services and some of them us or try to use it.

It has resulted that urban area is more financial literate as they have good financial knowledge and
awareness about it. Urban area is more familiar because of their daily routine. Urban area tends to
choose investment options to invest and diversify their money.

Urban area people tend to borrow funds through authorized way and not illegally. They maintain
their saving account to save their money. Urban area is more indulged in Stock Market to diversify
their portfolio and expand their money.

It has simply concluded that urban and rural area can be compared on various factors like age,
Income, their financial behaviour, and results very different. This study suggests that urban area is
more financial literate as compared to rural area.

In conclusion, the comparative study of financial literacy in rural and urban areas represents a critical
exploration of the disparities and commonalities in financial knowledge and practices across diverse
settings. By recognizing and understanding the multifaceted factors at play, we can foster a more
inclusive approach to financial education and empowerment.

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 SUGGESTION

1. There should be programmes Host educational workshops on budgeting, saving, and investing.

2. There should be surveys conducted, because it helps to identify the problems faced by rural and
urban areas.

3. In rural areas schools should also focus on financial literacy of students.

4. Promote knowledge of mobile banking services in urban area

5. Train local individuals to be financial educators.

6. Promote user-friendly mobile apps for education and budgeting.

7. To increase access to banking services and ATM in ruraareas.

8. Promote user-friendly mobile apps for education and budgeting.

9. Utilize visual aids, like posters and pamphlets, to explain financial concepts in an
easy-to-understand manner.

10.Set up local canters where residents can receive one-on-one financial counseling and
guidance.

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