The Impact of Financial Literacy on the Decision to use a Mobile Payment Application: a Case Study of Households that Have Just Escaped Poverty in Hanoi

Abstract

Purpose: To study and quantify the impact of financial literacy on the decision to use a mobile payment application. Case study of households that have just escaped poverty in Hanoi. Theoretical framework: The foundation for building a theoretical framework is the content of personal finance knowledge in this study, including (i) financial knowledge, (ii) financial attitudes, (iii) financial skills and (iv) financial behavior. Financial literacy is assessed using a combination of objective multiple-choice questions and self-assessment. Methods: The study is based on survey data collected through a structured online questionnaire for newly lifted household heads, as well as secondary data collected from respondents' profiles. Research data were collected from 186 responses using convenient non-probability sampling technique and analyzed by descriptive statistics, ANOVA analysis and Binary Logistic regression analysis. ANOVA analysis showed a statistically significant relationship between the groups of subjects in terms of personal financial knowledge (in both self-assessment method and objective test method). Results and conclusions: Binary Logistic regression results show that the main variables that positively affect the probability of a new household head out of poverty include Personal Financial Knowledge, Personal Financial Behavior, Gender, Status Occupation and Education Level. Financial attitudes and Religion have a negative impact on the ability of household heads to decide to use mobile payment applications. Finding implication: The findings will contribute to differences in financial knowledge and financial behavior. Financial behavior in this study is considered as the decision to use mobile payment service of Hanoi households who have just escaped poverty. We also looked at the effects of gender, age, occupation, religion, marital status, family role, and years out of poverty. Uniqueness/value: The research results are the basis for proposing governance implications as well as policy recommendations to improve the personal financial knowledge of newly-escaped household heads, encouraging them to use the service. mobile payment services, thereby helping them achieve their goals of economic recovery and sustainable development.