FINANCE LITERACY AS A TOOL FOR MICROFINANCING: A LITERATURE REVIEW

Abstract

The research goal of this study is to provide a summary of economic research and literature in the domain of financial literacy. There are 1.7 billion people in the world who do not have access to financial services. One of the goals of the UN Sustainable Development Goals is to reduce poverty through financial inclusion. Financial literacy has risen to prominence as a key element for achieving universal financial inclusion. Financial literacy is defined as the knowledge and ability of a person to understand the financial concepts. There is lack of theoretical framework and quantitative instruments for assessing the impact of financial literacy on financial behaviour. Financial literacy is a major policy issue in the realm of social and sustainable finance. The purpose of this study is to look at the existing literature in the realm of financial literacy and develop a comprehensive definition of financial literacy. For this study, the PRISMA methodology of systematic literature review was used. Financial knowledge, according to the research, does not lead to financial behaviour. Financial attitude plays an important role to transform financial knowledge into financial behaviour. There is need for further research to develop a theoretical framework and a quantitative method for measuring financial literacy. For policymakers and academics, this study will provide thorough insights into the meaning, definition and various dimensions of financial literacy as a concept. JEL Code: G51, G53, G59 Keywords: Financial knowledge, financial literacy, financial attitude, microfinance.