Search results

The purpose of this study was to investigate the effect of financial literacy on personal retirement planning in Bukavu city in the Democratic Republic of the Congo (DRC), which is a Sub-Saharan underdeveloped country with a weak pension and social security system.

This study used a structural equation modeling and a sample of 361 public sector employees selected in Bukavu city in the DRC. The data were collected through a survey questionnaire, and the data were analyzed using SPSS and SMART PLS software.

The results from the study revealed that financial literacy has a significant impact on personal retirement planning. Two constructs of financial literacy, respectively, computation capability and financial knowledge were found to have a significant impact on personal retirement planning, while financial education and attitudes toward financial products were found not significant in explaining personal retirement planning.

The findings from this study can be used by policy makers in the DRC to design socioeconomic programs, aiming to increase the level of financial literacy in the country and awareness on personal retirement planning.

The reviewed studies were based mostly on developed countries, and countries were the social security system works effectively. We have not found a study on financial literacy and retirement planning that has been conducted in the DRC, which is a country with specific characteristics compared to developed countries.

People are increasingly responsible for making sound financial decisions to foster their financial satisfaction and well-being, which magnifies the importance of financial literacy, and this concept and measurement is still not yet crystallized in the literature, specifically capturing different behavior perceptions. Moreover, there is not a distinction based on different classifications of behavior, such as over or underconfidence, to understand the relation between literacy and decision process. To fill this gap, this paper aims to investigate whether the financial literacy conceptual model proposed applies similarly to every group independently of their previous self-confidence perception. For this purpose and quality control, OECD (2016) data were used with a final sample of 1,487 Brazilian citizens. Quantitative analysis technique using partial least squares structural equations path modeling and differences between groups using multi-group analysis was applied. In line with general studies, when analyzing the financial literacy usual model for the group as a whole, financial knowledge construct positively influences self-confidence, and both together positively affect financial behavior. However, for individuals with low financial knowledge and low self-confidence, as well as for those with too much or too little confidence, the model did not hold. Therefore, self-confidence perception influences the way financial knowledge is used for financial decisions and should be addressed in financial education and training to be more effective.

To operationalize the variables and test the paper’s hypotheses, the authors used the methodology developed in OECD (2016), based on the research instrument’s Brazilian application adapted from the questionnaire developed in OECD (2015), with data initially used and made available by Garber and Koyama (2016). Based on the recommendations of Hair Jr et al. (2017a, 2017b), the authors used partial least squares modeling PLS-PM (SmartPLS 3.2.6) to estimate the structural models.

Concerning structural relationships, the final model showed knowledge with a positive influence on self-confidence, self-confidence with a positive effect on behavior and knowledge with a positive influence on behavior, both directly and, through its relationship with self-confidence, indirectly. This underscores that, for the total sample, the greater people’s knowledge and self-confidence, the better their behavior. The unexpected absence of attitude in the final model, even allowing for potential measurement problems, brings up an important reflection on the mediating effect that the self-control variable may exert between attitude and behavior. A person may believe that saving for the future is important (attitude) but whether they actually save (behavior) may depend on self-control, which is needed to prevent immediate gains from being prioritized in practice.

The findings reported so far concern the study’s total sample. However, as expected from the literature review that provides the basis for the sixth and the most important hypothesis, respondents were found to be heterogeneous in terms of knowledge and self-confidence levels. These differences were evaluated by means of multi-group analyses that indicated that the model does not apply to respondents with low knowledge and low self-confidence and to those who are over- and underconfident. This implies inferring that financial education programs may be of little use if they only address technical knowledge development and fail to consider behavioral aspects such as those related to self-confidence, as this paper points out, and others. This signals the importance of diagnosing people’s profiles to enable developing solutions capable of minimizing the presence of behavioral biases. This need to be studied further.

The results imply inferring that financial education programs may be of little use if they only address technical knowledge development and fail to consider behavioral aspects such as those related to self-confidence, as this paper points out, and others. Models must be reviewed in light of natural diferences of cognition and lead to customized financial education.

This signals the importance of diagnosing people’s profiles to enable developing solutions capable of minimizing the presence of behavioral biases. Therefore, not only training topics in personal finance but also a deeper education program since the kindergarden must be considered.

Its practical contribution is to suggest the development of financial education programs that also take account of the potential presence of behavioral biases, which may prevent the misallocation of (scarce) public- and private-sector funds stemming from a limited focus on developing the population’s actual financial knowledge.

Financial literacy is a crucial element of financial decision-making, exerting significant influence on the behaviour of individual investors, while making budgetary, house financing, stock investing and retirement planning decisions. So, the purpose of this research is to determine the relationship between financial literacy and behavioural biases of individual investors in Pakistan.

In this research paper, a sample of 300 observations was obtained through questionnaires from individual investors residing in Lahore and invested in Pakistan Stock Exchange. The data obtained, was passed through Cronbach’s Alpha and Exploratory Factor Analysis (EFA). The hypothesis developed for the research was tested by Pearson’s Chi-square and Ordinal Regression Analysis.

The hypothesis testing of the research concluded that there is a negative association between financial literacy and behavioural biases of individual investors. So, it means; with an increase in level of financial literacy, the likelihood of investor facing behavioural biases reduces. It also appeared that male respondents have more financial literacy than female respondents

Previous studies in the field of finance, identified different factors causing the financial behaviour of individual investor of Pakistan, and also focused on level of financial literacy in Pakistan, but these studies have not emphasized the crucial relationship between financial literacy and behavioural biases of individual investors. Thus, the unique empirical analysis developed in this paper has accentuated the financial literacy as a factor that mitigates behavioural biases of individual investor.

This article describes financial professionals' perceptions of their clients' financial behaviors and the explanatory factors underlying these behaviors.

In this qualitative research, the authors seek to understand financial professionals' experiences in relation to how their clients manage their own finances. The authors conduct and analyze 26 semi-structured interviews with financial professionals from several industries within the financial sector in Canada.

The professionals in this study noted that despite their clients' financial knowledge, several other factors can explain these individuals' financial behaviors. They include psychological factors (such as financial bias, the need for instant gratification, and the lack of awareness regarding the long-term effects of certain types of financial behaviors), financial habits (such as lifestyle, financial planning and lack of discipline) and the financial system's flexibility with respect to debt financing and repayment. These perceptions are categorized according to whether they are related to debt financing or repayment, savings or investments.

By using a qualitative methodology that relies on the perceptions of financial professionals, this study aims to better understand the financial behaviors of individuals and households, and these behaviors' underlying factors. This study's findings could be useful to various stakeholders interested, in one way or another, in financial literacy, such as organizations aiming to strengthen and promote financial literacy, educators, researchers, regulatory bodies of financial institutions and financial advisers.

The coronavirus disease 2019 (COVID-19) pandemic has become a global humanitarian challenge. This scourge has impacted people from all walks of life as well as every economic sector and activity, from travel to automotives, hotels to banking, and supply chain to retail. The pandemic has affected not only physical and mental health but also financial health. Studies have examined the pandemic's economic impact, but very few have examined its impact on personal finances. Efforts to contain the pandemic's spread, such as lockdowns, have resulted in suspended business operations throughout the world that have intensified joblessness. To prepare and protect people from such unforeseen situations, financial education and planning are necessary. We attempt to expand the evidence on this issue by applying a structural equation modelling approach to identify the mediating role of financial literacy programs in preparing and protecting household wealth against sudden worldwide setbacks. The research design is descriptive and exploratory using snowball sampling technique. The data was collected through an internet survey. In total, 400 survey responses were obtained. After testing the measurement model for key validity dimensions, the hypothesised causal relationships are examined in several path models. The results indicated that coronavirus awareness exerts a direct or indirect influence on the financial health of individuals through financial literacy. We conclude that financial literacy has a full mediating effect on the personal finance of individuals during the COVID-19 pandemic. The findings not only contributed to the need and understanding of financial literacy but also have managerial implications. Financial literacy programs provide investment advice and suggestions which are actionable and also work to help individuals to come out stronger in terms of knowledge and skill set when the COVID-19 crisis passes.

This study aims to determine the contribution of financial skills to entrepreneurial intentions among women involved in university education.

Clustering and logistic regression analyses were used to infer the determinants and motivators of entrepreneurial intention in a sample of women students at a Spanish online university.

Financial and numerical skills could play a significant role in boosting entrepreneurial culture, overcoming reticence and increasing awareness of business opportunities, particularly when women are motivated to increase their autonomy and income. The study offers meaningful implications for policymakers.

Further research will be needed before these conclusions may be inferred to other settings and circumstances. Comparison with a similar sample of potential male entrepreneurs may also be necessary to deduce the influence of gender.

The introduction of certain financial content into the education system by governments and policymakers would produce remarkable results on entrepreneurship intention among women.

Relational capital and positive social influences also contribute to mitigating the effects of risk aversion, one of the main barriers for potential female entrepreneurs.

The role of financial literacy in entrepreneurial intention among women has scarcely been addressed in academic research. The literature also has paid little attention to the analysis of what motivates women into entrepreneurship, and whether women who decide to embark on a business venture show different profiles. The aim of this study is to contribute to closing these gaps, exploring the effect of cognitive skills, personality traits, contextual factors and motivations.

This study aims to comparatively measure the impact factors of financial inclusion and their spillover effects for Belt and Road countries using panel data from 57 countries in 2011, 2014, 2017 and 2021 and relevant indicators from three dimensions: availability, usage and quality to construct a digital empowerment index of financial inclusion.

A spatial Durbin panel model is constructed to empirically test the impact mechanism of financial inclusion under digital empowerment.

Results reveal that improving a country’s quality of regulation, technology and residents’ financial literacy significantly contributes to the development of its financial inclusion, while improving its neighboring countries’ financial literacy also boosts its financial inclusion development. This study provides theoretical support for evaluating the development level of inclusive finance in “Belt and Road” countries, promoting the development of inclusive finance and alleviating the problem of financial exclusion.

This study is original as it creates a research paradigm for “Belt and Road” countries, enabling systematic testing and comparative analysis of inclusive finance development. It incorporates traditional and digital services, evaluating them based on sharing, fairness, convenience and specific group benefits. An inclusive financial index is constructed using the coefficient of variation and arithmetic weighted average methods. Additionally, it introduces a more rational analysis approach for the influence mechanism and spatial effect, using an economic geography nested matrix and spatial Durbin model to explore spatial effects in inclusive finance.

This study aims to develop a valid and reliable Islamic financial literacy (IFL) scale that can capture all the segments of the Islamic financial sectors and which could be considered applicable for all jurisdictions across the globe.

To build the measure, this study followed a scale development process by collecting 698 a priori items from 81 respondents. Later, it generated an item pool through the analysis of the items with experts and gave the last form (40 items) to 287 respondents in Turkey with another IFL scale that is frequently used in the literature and a scale assessing religiosity. With explanatory factor analysis, the scale demonstrates a four-factor construct with 20 items. This construct provides good fit indexes and reliability scores.

Results of the correlation analysis and comparison of the fit indexes of alternative structures provided supportive evidence for discriminant and convergent validity of the scale and its sub-dimensions. As a result, an applicable scale is developed for countries where Islamic financial institutions are operating and where they are not.

One of the strengths of this study is that it represents a comprehensive scale development for the entire Islamic financial system, including banking, takāful (Islamic insurance) and fund management. In addition, the attempt to design an IFL scale applicable to any economy or individual is a pioneering attempt in the literature.

This paper aims to examine prospective graduate students' attitudes toward educational loan borrowing in an experimental setting.

Participants were randomly assigned to two treatment groups and one control group. Subjects in experimental group 1 received financial education: a short online course on the economic viability of getting a master's degree and how to finance it with a graduate student loan, while subjects in experimental group 2 received financial education along with information on the availability bias.

Relying on a control group in the assessment of financial literacy education intervention impacts, this research finds positive causal treatment effects on individuals’ attitudes toward debt-financed graduate education. In comparison to the control group, experimental subjects perceived the possibility of going into debt with a graduate loan to complete a master’s degree as less stressful and worrying.

This study has important educational policy implications to prevent students from stopping investing in human capital by perceiving educational loan debt as something stressful or worrying. The results can help potential (and current) grad students develop a feasible financial plan for graduate school by encouraging higher education institutions to implement educational loan information and financial education into university seminar courses for better graduate student loan decision-making.

Student attitudes toward debt have been analyzed in the context of higher education, but only a few researchers internationally have used an experimental design to study personal financial decision-making.

The purpose of the paper is to examine the financial management behavior (FMB) mediation mechanism in self-control, optimism, deliberative thinking and investment decisions in the Tanzanian stock market.

A sample of 268 individual investors in the Tanzanian stock market was obtained through questionnaires. The data were analyzed using structural equation modeling.

The findings show that self-control, optimism and deliberative thinking are significantly and positively related to FMB and investment decisions. The findings also confirmed the mediating role of FMB in the influence of self-control, optimism and deliberative thinking on investment decisions among Tanzanian individual investors. These findings imply that people with good self-control, optimistic and deliberative thinking are more likely to save money, have better FMB and prefer to make investment decisions.

The study deals with individual investors. Future research could examine the effects of psychological traits on investment decisions by adding or modifying the items of particular constructs and studying institutional investors.

Individual investors can use the information to study and evaluate their financial behavior and stock investment decisions. This research can be used by security firms to better understand investor behavior, forecast future market trends and advice investors. Individual investors require psychological features to manage their behavior in various aspects, ranging from affective behavior to cognition, which are relevant for investing decisions.

Few studies have examined the influence of self-control, optimism and deliberative thinking on the investment decisions of individual investors. The unique empirical analysis developed in this paper is that it examines the mediation mechanisms of FMB with respect to self-control, optimism and deliberative thinking and investment decisions among individual investors in the Tanzanian stock market.