A Study of Financial Literacy of Rajkot District, Gujarat, India

Abstract

Since the independence of our country, there has been major focus on policy development and financial reforms. Financial inclusion has become a priority for both the central government and the RBI. For a nation to achieve financial inclusion effectively, the population should be financially literate. A review of existing literature in this field reveals that most studies have focused on three key variables, viz., financial literacy, financial development and economic growth. To contribute to this existing body of research, this paper explores the distinction between ‘financial literacy’ and ‘financial awareness’ to better understand what can truly drive ‘financial inclusion’ in the country. Primary data from 130 respondents was collected from the district of Rajkot, Gujarat, of which 100 respondents were taken into consideration, followed by statistical analysis of the data. The study concludes that gender makes a significant impact on financial literacy, where males showed higher financial literacy as compared to females. Further, age and education of the people makes a significant impact of financial literacy of the population, which in turn, will lead to financial inclusion. There do exist a marginal correlation between financial awareness and financial literacy (r=0.054).