Financial literacy among Malaysian Muslim undergraduates

Abstract

Purpose University students are known to face many challenges in achieving high financial literacy. The purpose of this paper is to examine the level of financial literacy among Malaysian Muslim undergraduates as explained through sociocultural variables. Furthermore, this paper explores a few additional Islamic measurements as part of assessing the level of financial literacy among the students. Design/methodology/approach The questionnaires were drafted based on a multi-dimensional financial literacy model and distributed conveniently to 330 respondents. Post-interviews were also conducted with selected students to further comprehend the sociocultural context. Findings The findings suggest that exposing students to financial education and practices influence their financial literacy scores. Students who attended muamalat-related courses demonstrated better financial literacy scores. Meanwhile, post-interview results indicate that the students’ social environment and interactions also play important roles in enhancing their financial literacy. Hence, it is believed that it is essential to embed Islamic-based measurements to equip students with financial literacy in tandem with their pedagogic development. The results thus extend previous studies by confirming the importance of Islamic-based finance- and business-related knowledge for all tertiary students. Furthermore, the curricula should be made compatible to their studying environment and attuned to their values and cultures. Practical implications The findings suggest the introduction of personal financial and muamalat-based knowledge and practices relative to their Islamic programme orientation. This should take place during the students’ academic years and across all academic programmes’ orientation. The study also highlights the importance of developing special measurements of Islamic financial literacy for Muslims congruent to their distinct Islamic identity. Social implications The study indicates the importance of high financial literacy among tertiary students for them to have a financially stable future. Originality/value The research is original in its use of several measurements of financial literacy that embedded Islamic teachings concomitant to the Muslim respondents.