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Financial literacy and its antecedents amongst the farmers: evidence from India

Sumit Kumar Maji (The University of Burdwan, Burdwan, India)
Arindam Laha (The University of Burdwan, Burdwan, India)

Agricultural Finance Review

ISSN: 0002-1466

Article publication date: 21 June 2022

Issue publication date: 19 January 2023

319

Abstract

Purpose

The article makes a modest attempt to explore the level of financial literacy (FL) amongst the farmers in India. An effort was also made to unearth the factors affecting such FL.

Design/methodology/approach

The study used secondary data on 11,030 farmers across various regions of India from the Financial Inclusion Insight Survey, 2017. Standard and Poor Global FL questions were used to measure the level of FL amongst the respondents. In addition to the appropriate statistical tools and techniques, the censored tobit regression model and generalized structural equation model were applied to explore the determinants of FL of the Indian farmers.

Findings

The outcome of the study indicated that the majority of Indian farmers are financially illiterate. The average FL score obtained by the sample farmers was found to be only 33%. The results of the study signaled significant regional variation in FL amongst the farmers across India. Apart from the regional variation in FL, farmer type, state-specific agricultural productivity, gender, marital status, age, educational attainment and financial inclusion were found to be the major determinants of the FL amongst the farmers.

Originality/value

Evaluation of FL amongst farmers is scanty in the literature in developed nations and especially in the context of emerging economies, like India. The authors tried to fill this gap by exploring FL and its determinants amongst Indian farmers. In addition to this, the study for the first time used a comprehensive and rich dataset of 11,030 Indian farmers while exploring the level of FL and its determinants.

Keywords

Citation

Maji, S.K. and Laha, A. (2023), "Financial literacy and its antecedents amongst the farmers: evidence from India", Agricultural Finance Review, Vol. 83 No. 1, pp. 124-143. https://doi.org/10.1108/AFR-01-2022-0009

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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