An Assessment and Analysis of Financial Literacy in Kerala, India

Abstract

Aims: To assess financial literacy levels in Kerala, India, using the OECD framework. Kerala's financial literacy rate (39%, NCFE 2019) underscores the need for targeted education programs. This study identifies gaps in financial knowledge, behavior, and attitudes, offering insights for policymakers to integrate financial literacy into education systems and community initiatives. Study Design: Cross-sectional quantitative survey. Place and Duration of Study: Conducted in Kerala, India across 14 districts from June to November 2024. Methodology: A sample of 125 respondents, selected using stratified random sampling, was surveyed. Financial literacy was measured based on the OECD framework's three dimensions: knowledge, behavior, and attitudes. Statistical analysis included descriptive statistics and logistic regression to identify significant predictors. Results: 84% of respondents were moderately literate, 12% highly literate, and 4% financially illiterate. Gaps were identified in understanding compound interest and risk diversification, and in adopting long-term financial planning and budgeting behaviors. Conclusion: Education level significantly influenced financial literacy. The findings suggest integrating financial literacy programs into school curriculums and promoting community-based initiatives to address gaps in financial knowledge, behavior, and attitudes.