Abstract
This study investigates financial knowledge, behavior and attitude of individuals to gauge how the financial market evaluates an individual's financial capability and financial decision making. Higher financial knowledge increases the entry into sophisticated financial contracts and the understanding of contemporary featured new financial products as well as good financial decision making. Financial behavior also enhances the financial decision making of those individuals as well as the relationship between individuals and their behavior towards saving, investment, cash and credit. These effects are intensified by individuals' financial behavior, the level of relationship with investments, savings and the use of credit. This study found out that a deeper acquaintance of individuals on financial knowledge, attitude and behaviour results in positive consequences on their relations with financial services providers and in turn promotes to financial capability.
Highlights
Previous studies state that financial capability is composed of financial knowledge, financial behaviour and financial attitude (Kempson et al, 2005; Atkinson and Messy, 2012; Collins, 2013; World Bank, 2014a; Grinstein-Weiss et al, 2015; Hui et al, 2016)
This study found out that a deeper acquaintance of individuals on financial knowledge, attitude and behaviour results in positive consequences on their relations with financial service providers and in turn promotes to financial capability
A sample survey of 100 individuals, out of which 59(59%) male and 41(41%) female are taken to study the financial capability of individuals in Addis Ababa, Ethiopia
Summary
Previous studies state that financial capability is composed of financial knowledge, financial behaviour and financial attitude (Kempson et al, 2005; Atkinson and Messy, 2012; Collins, 2013; World Bank, 2014a; Grinstein-Weiss et al, 2015; Hui et al, 2016). The study identifies the financial behaviour that constitutes the individual financial capability in Addis Ababa Ethiopia. The financial behaviours such as cash, saving, credit, investment behaviours and behaviours that enhance individuals to use wide range of financial services for one’s own benefit. The study investigates the financial attitude of individuals that might drive them to use financial products, services and commands their financial behaviours
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