First results on financial literacy in Oman

Abstract

PurposeThis study aims to examine the financial literacy level among the Omani adults and investigate the determinants of financial literacy and its impact on savings and investment behavior.Design/methodology/approachThe data were collected using a survey instrument adopted from Organisation for Economic Co-operation and Development (OECD) survey for financial literacy and composed of 310 individuals' responses. The authors used a multiple regression analysis to determine the impact of the socio-demographics variables on the financial literacy level.FindingsThe findings are three-fold: first, financial literacy score of Omanis is 10.5 out of 21, which is lower than OECD average. Interestingly, the attitude and behavior scores are in line with the OECD average. However, the knowledge score is drastically lower. Second, financial literacy level is found to be affected by age, gender and the monthly income. Third, individuals with a higher level of financial knowledge are more likely to have monthly savings and investment in stock and bond.Research limitations/implicationsThe Gulf countries have started to modernize their economies. Governments that want to design effective economic reforms need to understand the financial skills of their citizens. The study may have implications for policymakers and financial educators in enhancing the financial knowledge programs for individuals.Originality/valueThe analysis reported in this study is unique because it provides the first systematic research on financial literacy in Oman. This paper contributes to the study of financial literacy from the perspective of emerging markets.