Factors affecting College students’ multidimensional financial literacy in the Middle East

Abstract

Financial literacy is internationally recognized as an essential requirement for citizens who need to make informed personal finance decisions in an increasingly deregulated and complex financial system coupled with the fast emergence of fintech. In the Middle East, Gulf countries are facing serious economic growth challenges since the collapse of oil prices in 2014.This paper analyzes the main socio-economic and demographic factors of financial literacy among University students. The data is collected though an online survey submitted to a randomly selected sample of 2500 students from the University of Sharjah in the UAE. The survey includes 32 questions adapted to the Gulf context covering knowledge, behavior and attitude dimensions. The results of the main binary logistic regression show that the most vulnerable students in multidimensional financial literacy are UAE national females, studying in the undergraduate level, majoring in non-scientific areas, who did not take the Personal Finance course (University elective), with a lower CGPA and a lower family income. It was found that 31.36% of students who responded to the survey are classified as financially literate.Logistic regressions considering each of the three dimensions of financial literacy were performed with the same predictors. The results confirm that most of the explanatory variables are significant in predicting the category of financial knowledge. However, they fail to predict the categories of financial behavior and attitude.