The Extent of Financial Literacy among
the Women in Kerala: A Perception Analysis
Dr. Biju S K
Assistant Professor
PG & Research Department of Commerce
Government Arts College, Thiruvananthapuram
Abstract
Financial literacy is
considered as an important factor
that promotes
financial inclusion. Financial literacy helps individuals become self- sufficient so that they can achieve
financial stability.
Due to the importance of
financial literacy, RBI and Central Government are undertaking many projects and programmes to
make the people financial literate.
Both women and men need to be sufficiently
financially literate to effectively participate in
economic activities and
to take appropriate financial
decisions for themselves and
their families, but
women often have less financial
knowledge and lower
access to
formal financial products than men. The present study, the extent of level of financial literacy among the women in Kerala identified that Majority of the respondents have saving habit. Majority of the respondents chose commercial banks for their savings. The second best option is savings at home. Self
help
group is the least savings option by the respondents.
The problem
faced
by
women
for taking
financial decision in
the family is ‘male
dominance’ and followed
by
limited mobility.
1.
Introduction
Financial
literacy is considered as an
important factor that
promotes financial inclusion. Due to
the importance of financial literacy, RBI and Central Government are undertaking many projects and programmes to
make the people financial literate.
Even then many of the individuals are unfamiliar with even the most basic economic
concepts needed to make sensible saving and investment
decisions. This has
serious implications for savings and other financial decisions.
Both women and men need to be sufficiently
financially literate to effectively
participate in economic activities and to take appropriate financial
decisions for themselves and
their families, but
women often have less financial
knowledge and lower
access to
formal financial products than men. Women therefore
have specific and additional financial literacy needs. In this scenario,
a study that covers the issues will be significant. So the present study focuses on the extent of level of financial literacy among the women in Kerala.
2.
Financial Literacy
Financial literacy refers to the set of skills and knowledge that allows an individual to make informed
and effective
decisions with
all of their financial resources. Financial
literacy
is having the knowledge,
skills
and confidence to make responsible financial decisions.
Financial literacy
means possession
of knowledge
and understanding of financial matters. It is mainly used in
connection with personal finance matters. Financial
literacy often entails the knowledge of properly making decisions pertaining to certain personal finance areas like insurance,
investments, savings, tax planning, retirement etc.
Financial literacy
helps individuals become self- sufficient so
that they can achieve
financial stability.
Those who understand the subject should be
able to
answer several questions about purchases, such as whether an item
is required,
whether it is affordable and whether it an asset or a
liability. Financial literacy encompasses more
than just
personal finance
to
be
financially
literate; an individual does need to
be fluent in
personal finance, but also in global
economics,
entrepreneurship and investing- all on a platform of real-time technology.
A lack of financial literacy is not a problem only in
emerging or developing economies. Consumers in developed
or
advanced economies also fail to demonstrate a
strong group of financial principles in order to understand and negotiate the financial landscape, manage financial risks effectively and avoid financial pitfalls.
Financial
illiteracy may
lead to making poor financial choices that can have negative
consequences on the financial well being of an individual. Consequently the Federal Government created
the Financial Literacy and Education Commission, which provides resources for people
who want to learn more about financial literacy.
3. Statement of the Problem
In many countries, women display lower financial knowledge than men
and are also less confident in their financial knowledge and skills. A number of
barriers appear to be related to gender differences in financial literacy. The limited access to education, employment and
formal financial
markets
not only reduce women’s financial well-being per
se, but
also
limit the extent to which women can improve their knowledge, confidence and skills about economic and financial issues. The government initiated several programmes to improve the
financial literacy, and this study aims to elicit the extent of financial
literacy among the women in Kerala.
4. Objectives of the Study
·
To identify the level of awareness
among women with
regard to various financial terms.
·
To
find out the
most
preferred investment
instruments among housewives in Trivandrum district.
·
To understand the problems faced by housewives for taking financial
decisions.
5. Methodology
The study is based on both primary and secondary
data. The primary data was collected from a
sample of 500 housewives in the capital city of Kerala with the help of
a structured
interview schedule. The secondary
data was
collected
from websites, journals and books.
6. Extent of Financial Literacy
The financial literacy is
the main stimulant for financial inclusion and inclusive growth. It can be
attained through inculcating savings habit and motivating them to invest in
bank, insurance and other assets. This analysis took into the savings habits, investment
avenues and the problems faced by the kerala women in financial literacy
related issues.
6.1.
Respondents’ savings habit
The table 6.1 shows that 88% of
the respondents have saving habit. 12% of the respondents
do
not
have
saving habit. It is clear that
majority
of the respondents have saving habit.
Table 6.1: Respondent’s savings habit
|
Source: Primary data
6.2.
Source of financial information or advice
The
table 6.2. shows that 14% of the respondents get financial information from Television, 6% from Internet, 22% from Newspaper, 8% from their friends, 28% from their Bank/Financial consultants and 22% from their family. It can be
noted that majority of the respondents
get financial information or aadvice from their bank/financial consultants.
Table 6.2: Source of financial information
|
#
|
From where Respondents get Financial Information
|
Number of
Respondents
|
Percentage (%)
|
|
1
|
T.V
|
70
|
14
|
|
2
|
Internet
|
30
|
6
|
|
3
|
News Paper
|
110
|
22
|
|
4
|
Friends
|
40
|
8
|
|
5
|
Bank/ Financial Consultants
|
140
|
28
|
|
6
|
Business Magazines
|
0
|
0
|
|
7
|
Family
|
110
|
22
|
|
8
|
Others
|
0
|
0
|
|
Total
|
500
|
100
|
Source: Primary data
6.3.
Opinion about Bank Account
The
table 6.3 reveals that all the respondents have bank account.i.e.100%.
Table 6.3: Opinion about bank account
|
Source: Primary data
6.4.
Opinion about ATM Card
The table 6.4 shows that 68% of the respondents have ATM card. 32% of the respondents do not have ATM card.
Table 6.4: Opinion about ATM card
|
Source: Primary data
6.5.
Operation of bank account with ATM Card
The table 6.5 reveals that 94% of the respondents who have ATM card, operating their account with the ATM card and 6% of the respondents use their ATM card with the help of others.
Table 6.5: Operation of bank account with ATM
|
Source: Primary data
6.6. Reason for opening Bank account
The table 6.6.
shows the reason for opening a
bank
account by the respondents. It can be noted from the table that 52% of the total respondents open a
bank account for making deposits, 28% are taken for availing loans, and 6% are taken for getting subsidies from Government.
14% of the respondents have
no specific purpose while opening a bank account.
Table 6.6: Reason for opening bank account
|
Source: Primary data
6.7.
Role in taking financial decision in the family
Out
of 500
respondents, majority of the respondents have active
role
in taking financial decisions in their family.i.e; 76%. 24% of
the
respondents do not have active role in taking financial decisions.
80 76
70
60
50
40
24
20
10
Yes
No
No
0
Active Role In Financial
Decision
6.8.
Purpose of savings
The purpose of savings
is
classified
into various
categories. The respondents
give Rank in the order of their
preference. Respondents
give Rank-1 for education of their children with an average
of 87.4. The
respondents give Rank-2 for Repayment of loan
and Old age security with an
average of 79.2. They give Rank-3 for Acquisition of
capital asset with an average of
77.2, Rank-4 for Construction of
house
with an average of
76 and Ran-5 for other purpose like Medical treatment.
Table 6.8: Preference of Respondents
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Source: Primary data
6.9.
Best Investment Option
The table 6.9
reveals the
investment option of the
respondents. They give Rank-1 for Bank deposit as the best investment option with an average of 88. The respondents give Rank-2 for LIC/Insurance with an
average of 75.2. Rank-3 for Chitty and Post office Savings with an average of
74, Rank-4 for KSFE with an average of 71, Rank-5 for Gold investment with an average of 59.2, Rank-6 for Mutual Fund with an average of 41.4 and Rank-7 for Real Estate as an investment
option with an average of 37.2.
Table 6.9: Best Investment option
|
#
|
Description
|
Respondents Rank in order of Preference
(%)
|
Weighted Average
|
Rank
|
|||||||
|
Rank
1
|
Rank
2
|
Rank
3
|
Rank
4
|
Rank
5
|
Rank
6
|
Rank
7
|
Rank
8
|
||||
|
1
|
Bank Deposit
|
58
|
10
|
8
|
14
|
6
|
0
|
0
|
4
|
88
|
1
|
|
2
|
Insurance
|
14
|
22
|
16
|
18
|
16
|
10
|
2
|
2
|
75.2
|
2
|
|
3
|
Chitty
|
12
|
20
|
14
|
18
|
28
|
4
|
2
|
2
|
74
|
3
|
|
4
|
Post Office
|
10
|
22
|
20
|
20
|
12
|
10
|
2
|
4
|
74
|
3
|
|
5
|
KSFE
|
4
|
14
|
28
|
14
|
24
|
14
|
2
|
0
|
71
|
4
|
|
6
|
Gold
|
2
|
6
|
12
|
10
|
12
|
48
|
10
|
0
|
59.2
|
5
|
|
7
|
Mutual Funds
|
0
|
4
|
2
|
4
|
2
|
8
|
42
|
38
|
41.4
|
6
|
|
8
|
Real Estate
|
0
|
2
|
0
|
2
|
0
|
6
|
40
|
50
|
37.2
|
7
|
Source: Primary data
6.10.
Use of avenues of savings
Out
of total respondents, majority of the respondents
are used Commercial banks for savings i.e.82%. 56% used Co-operative
banks, 58% used Post office,
52%
used Self-help group for savings. 62% of the respondents
used their home for
savings.
Table 6.10: Use of Avenues of Savings
|
#
|
Type
|
Used
|
Not
Used
|
|
1
|
Commercial Banks
|
82
|
18
|
|
2
|
Co-Operative Banks
|
56
|
44
|
|
3
|
Post Office
|
58
|
42
|
|
4
|
Self Help Group
|
52
|
48
|
|
5
|
At Home
|
62
|
38
|
6.11.
Problems for taking financial decision in the family
The table 6.11 shows the problems faced by women for taking financial
decisions in their family. Majority of respondents give Rank 1 for male in the family dominance with an average of 84.6. They give Rank-2 for Lack of education
with an average of 78, Rank-3 for Limited mobility with an
average of 74.2, Rank-4 for Social system prevailing in the family with an average of
71.4,
Rank-5 for Family responsibility with an average of
69, Rank-6 for Lack of access to technology with an average of 61 and Rank-7 for Family conflict with an average of 51.8.
Table 4.20: Problems for taking financial decision
|
#
|
Description
|
Respondents Rank in order of Preference
(%)
|
Weighted Average
|
Rank
|
||||||
|
Rank
1
|
Rank
2
|
Rank
3
|
Rank
4
|
Rank
5
|
Rank
6
|
Rank
7
|
||||
|
1
|
Male
Dominance
|
32
|
30
|
18
|
4
|
4
|
12
|
0
|
84.6
|
1
|
|
2
|
Lack Of
Education And
Awareness
|
12
|
30
|
26
|
8
|
6
|
18
|
0
|
78
|
2
|
|
3
|
Family
Responsibility
|
8
|
12
|
12
|
32
|
12
|
14
|
10
|
69
|
5
|
|
4
|
Limited Mobility
|
24
|
10
|
14
|
10
|
24
|
14
|
4
|
74.2
|
3
|
|
5
|
Social System
Prevailing In the Family
|
12
|
10
|
20
|
16
|
28
|
8
|
6
|
71.4
|
4
|
|
6
|
Lack Of
Access to The
Technology
|
10
|
4
|
6
|
20
|
14
|
18
|
28
|
61
|
6
|
|
7
|
Family
Conflict
|
2
|
4
|
4
|
10
|
12
|
16
|
52
|
51.8
|
7
|
Source: Primary data
7. Findings
1) Majority of the respondents have the practice of maintaining their budget.
2) Majority of the respondents have saving habit.
3) Most of the respondents get financial information from their banks/financial consultants.
4) Most of the respondents have ATM card and majority
of the respondents
operate their account with ATM card. But some of them are operate their account through ATM with the help of others.
5) From the analysis, most of the respondents
opened their bank account for making bank deposit. Some of
them
are opened their account for availing loans.
6) Majority
of the respondents have active role in taking
financial decision in the family.
7) In the case of purpose of
savings, most of
the respondents save their income
for education of their children. And the respondents also states that they save their income for old age security,
construction of house, acquisition of capital asset etc.
8) Most of the
respondents
chose bank deposit as best
investment option.
LIC/Insurance is the next best investment option.
9) From the analysis, fixed deposit and savings deposit are aware and used by all the respondents. Most of the respondents
are unaware about the term
‘Debit card’.
10) Majority of the respondents chose commercial banks for their savings. The second best option is savings at home. Self
help
group is the least savings option by the respondents.
11) From the analysis, the
problem faced by women for
taking financial
decision in the family is ‘male
dominance’ and followed
by
limited mobility.
8.
Conclusion
Financial literacy
is considered as an important adjunct for promoting financial inclusion and ultimately financial stability. A certain
level of financial literacy is essential for every human being for taking crucial decisions
in life. Financial
literacy can be raised only through financial education. Because of
this reason, government authorities are giving much attention to financial literacy programmes. But the problem is that these resources
are not effectively utilized. It should be avoided. Awareness programmes should be introduced in such a manner to reach the women. The benefit of financial literacy
campaign will last for a long time. A financially literate population
is an asset for every nation. Hence, Government agencies and NGOs may undertake
financial awareness programmes
among
housewives
to increase
their financial literacy.
This will be helpful to empower women by avoiding
male dominance. Banks, Insurance companies and other
financial service providers may concentrate
more on women.
It
will
help the agencies to increase their
customer base. Awareness shall be
created by the banks or financial consultants among the women investors, especially housewives about the various options available for
investment
other
than
bank
deposit
so that
they can
earn from the majority of their savings. Women investors shall be encouraged to make profitable investment in the future like shares, mutual funds etc.
Financial literacy programs should start at school, as students and
parents to be educated as early as possible.
And the last and not the least, arrange ‘Finance Behaviour Modification
Programmes’ to
women with the support of Kudumbashree and similar projects.
REFERENCE
1.
Beth Cobliner (2017)
:- ‘Get a Financial
Life : Personal finance in your
Twenties and Thirties’
2.
Oraynab Mohamed
(2016) :-
‘Financial Literacy
for Women : Helping
Women Help Themselves’
3.
Daniel Fernandez
(2014) :- ‘Financial Literacy, Financial Education and
Downstream Financial Behaviors’, Catholic
university of Portugal
4. Jacqueline
Bartley
(2013) :- ‘what
drives
financial
literacy among the
young’
5. K.K.Ammannaya
(2013) :- ‘Total Financial
Inclusion via
Financial
Literacy’, Southern economist, volume- 51.
6. Dr.Vipin
Chandran
and
P.
Sandhya (2013)
:- ‘Strategies
of financial inclusion life cycle in India’, Southern economist, volume- 51.
7. Claesohlsson
(2013)
:-
‘The
Rhetoric of
Financial Literacy’,
Goteborg
University
8.
Vered Neta (2013) :- ‘Financial Independence for Women : Take Control of
Your Money and Live a Balanced Life’
9.
Leora
F
Klapper ,Annamaria Lusardi
and
Georgios A Panos
(2012) :-
‘Financial Literacy
and the Financial
Crisis’, the National
Bureau of
Economic Research, March 2012
10.
Mohamed Fazli
Sabri (2011)
:- ‘Pathways to financial success
: Determinants
of financial literacy and financial wellbeing
among
young adults’
11. Lesley Anne Scorgie (2007) :- ‘ Rich by Thirty : A Young Adult’s Guide to
Financial Success’
12. Barbara
Stanny (2007) :- ‘Prince charming isn’t coming : How Women Get
Smart About Money’
Comments
Post a Comment