A Study of Financial Literacy and Its Determinants: Evidence from India

Main Article Content

Kapil Choudhary
Samriti Kamboj


Financial Literacy has become a priority area across the world in recent years. In a complex and globalized marketplace, a myriad of products is offered in the financial market, and the accessibility of products has also increased. This has made it imperative for individuals to be well equipped with the necessary financial knowledge and awareness to use their financial resources in an optimum way. The study examines the financial literacy of the people by using a questionnaire developed by the Organisation for Economic Cooperation and Development (OECD). The data were collected from 500 respondents from the state of Haryana. The findings reveal that only one-third of the total sample exhibit higher financial literacy. Although the majority of the people possess basic financial knowledge and exhibit positive financial behaviour, 57 per cent of the respondents lack a positive financial attitude. This suggests the need for the introduction of initiatives on the part of policymakers, which may be beneficial in changing the attitudes of the respondents. However, analysis of the socio-demographics suggests that certain factors may prevent persons from being more financially literate. In particular, low levels of income, income instability, and low age are associated with lower levels of financial literacy. The present study offers the first ever comprehensive insight into the financial literacy of the Haryana region. 

Keywords: Financial Attitude, Financial Behaviour, Financial Knowledge, Financial Literacy, Socio-demographic Factors

JEL Classification: D14, I22


Download data is not yet available.

Article Details

Research Paper


Agarwalla, S. K., Barua, S., Jacob, J., & Varma, J. R. (2012). A survey of financial literacy among students, young employees and the retired in India. Retrieved from http://www.iimahd.ernet.in/
Atkinson, A., & Messy, F. (2012). Measuring Financial Literacy: results of the OECD/International Network on Financial Education (INFE) (No. 15). Pilot Study. Working Paper.
Australian Securities and Investments Commission. (2011). Financial literacy and behavioural change. Research Report 230, Australian Securities and Investments Commission, Sydney. Retrieved from https://www.moneysmart.gov.au
Boucher, M. R. (2010). Delivering Financial Literacy: Challenges, Strategies and Instruments. Retrieved from https://www.oecd.org/
Chen, H., & Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7(2), 107-128.
Chakrabarty, K. C. (2010). Keynote address on Furthering Financial Inclusion through Financial Literacy and Credit Counseling. RBI monthly bulletin, (December), 2361-2366. Retrieved from http://rbidocs.rbi.org.in/
Cole, S., Sampson, T., & Zia, B. (2009, February). Valuing financial literacy training. In Conference on Measurement, Promotion, and Impact of Access to Financial Services, March (pp. 12-13). Retrieved from http://siteresources.worldbank.org/
Cole, S., Sampson, T., & Zia, B. (2011). Prices or knowledge? What drives demand for financial services in emerging markets? The Journal of Finance, 66(6), 1933-1967.
Demirguc-Kunt, A., Klapper, L., & Randall, D. (2013). The Global Findex Database, Note no. 8. World Bank, Washington, DC. Retrieved from http://siteresources.worldbank.org/
Grifoni, A., & Messy, F. A. (2012). Current status of national strategies for financial education: A comparative analysis and relevant practices. OECD Working Papers on Finance, Insurance and Private Pensions, 16, 1.
Hastings, J. S., & Mitchell, O. S. (2011). How financial literacy and impatience shape retirement wealth and investment behaviors (No. w16740). National Bureau of Economic Research.
Harris Interactive Inc. (2012). The 2012 consumer financial literacy survey. The National Foundation for Credit Counseling and The Network Branded Prepaid Card Association. Retrieved from https://www.nfcc.org/
Klapper, L., & Panos, G. A. (2011). Financial literacy and retirement planning: the Russian case. Journal of Pension Economics and Finance, 10(4), 599-618.
Lusardi, A. (2008). Household saving behavior: The role of financial literacy, information, and financial education programs (No. w13824). National Bureau of Economic Research. Retrieved from http://www.nber.org/
Lusardi, A., & Mitchell, O. S. (2008). Planning and financial literacy: How do women fare? American Economic Review, 98(2), 413-17.
Lusardi, A., & Mitchell, O. S. (2017). How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness. Quarterly Journal of Finance, 7(03), 1750008.
Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: an overview. Journal of Pension Economics & Finance, 10(4), 497-508.
Lusardi, A., & Tufano, P. (2015). Debt literacy, financial experiences, and overindebtedness. Journal of Pension Economics and Finance, 14(4), 332-368.
MasterCard, (2014). MasterCard index of financial literacy index report 2014 H1. Retrieved from http://www1.mastercard.com/
OECD INFE, (2011). Measuring financial literacy: Core questionnaire in measuring financial literacy: Questionnaire and guidance notes for conducting an internationally comparable survey of financial literacy. Paris: OECD. OECD International Network on Financial Education (INFE). Retrieved from https://www.oecd.org/
OECD INFE, (2012). Supplementary questions: Optional survey questions for the OECD INFE financial literacy core questionnaire. Paris: OECD. OECD International Network on Financial Education (INFE). Retrieved from http://www.oecd.org/
Rutledge, S. L., Annamalai, N., Lester, R., & Symonds, R. L. (2010). Good practices for consumer protection and financial literacy in Europe and Central Asia: a diagnostic tool. Retrieved from http://siteresources.worldbank.org/
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472.
VISA (2012). Visa's International Financial Literacy Barometer 2012. Retrieved from http://www.practicalmoneyskills.com/
Kathleen Mumaw CMA, M. B. A. (2010). Mortgage meltdown reveals importance of financial literacy education. Journal of Personal Finance, 9, 61.
Volpe, R.P., & Mumaw, K. E. (2010). Financial illiteracy and the subprime mortgage crisis. Journal of Business and Accounting, 2(1), 17-31.
Yoshino, N., Morgan, P., & Wignaraja, G. (2015). Financial education in Asia: Assessment and recommendations. Retrieved from http://www.adb.org/