Impact of financial literacy training on the financial decisions of rural households in Nepal

Financial education plays a significant role in poverty reduction and sustainable economic growth. It also increases individuals' financial well-being. Unfortunately, global financial literacy is low, and in developing countries, it is far below the global average. Nepal is a developing country...

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Bibliographic Details
Published inInternational review of economics Vol. 71; no. 2; pp. 149 - 173
Main Authors Karki, Shyam Kumar, Andaregie, Adino, Takagi, Isao
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer Berlin Heidelberg 01.06.2024
Springer Nature B.V
Subjects
Decision making
Developing countries
Economic Policy
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Financial literacy
History of Economic Thought/Methodology
Households
Law and Economics
LDCs
Personal finance
Quality of Life Research
Research Article
Rural areas
Social Policy
Nepal
Financial literacy
Impact
G51
G50
G53
Financial behavior
Logit
Multiple regression
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Summary:Financial education plays a significant role in poverty reduction and sustainable economic growth. It also increases individuals' financial well-being. Unfortunately, global financial literacy is low, and in developing countries, it is far below the global average. Nepal is a developing country with low financial literacy. Therefore, this study aimed to analyze the impact of financial literacy training on financial literacy levels and financial decisions among 399 randomly selected rural households in Bhojpur District, a rural area in Nepal. Multiple linear and logit regression models were used to analyze the data. The results revealed that financial literacy training increased the financial literacy level of training participants compared with that of non-participants. Education, financial literacy training, and migration of family members (personal migration history and plans to migrate) were other significant predictors. Respondents' financial and economic behavior was influenced by their financial literacy level, sex, age, education, family size, whether the respondent lives with parental family, and whether the respondent has migrated family members. The study suggested well-organized and inclusive financial literacy training program interventions to improve rural individuals' financial and economic decisions.
ISSN:1865-1704
1863-4613
DOI:10.1007/s12232-023-00438-3