Financial Knowledge Research Articles

The Moderating Effect of Self-control on the Relationship between Financial Knowledge and Retirement Planning among Commercial Bank Employees in Eldoret Town, Kenya

Retirement planning is a goal-oriented behavior where individuals devote effort to prepare for their retirement life effectively, thus reducing retirement worry, keeping stress under wraps, and enhancing retirement preparedness and confidence. However, there is little literature about retirement planning among employees working in Kenyan commercial banks. To fill this gap, this study aimed to establish the moderating effect of self-control on financial knowledge and retirement planning among commercial bank employees in Kenya. This study was guided by goal setting, social cognitive, and behavioral life cycle theories. The study adopted an explanatory research design, with data being collected from a target population of 1058 employees of 32 commercial banks in Eldoret town using a closed-ended questionnaire. A sample size of 290 respondents was obtained using Yamane’s formula. The study used simple random sampling techniques to sample the commercial banks, and thereafter the researcher used systematic sampling techniques to select employees as respondents. The study hypotheses were tested using a hierarchical regression model. Results reveal that financial knowledge had a significant positive impact on retirement planning (β =.626, P =.000), confirming that employees with better financial knowledge are more likely to plan effectively for retirement. Similarly, self-control not only directly influences retirement planning (β = .258, P =.000) but also moderates the relationship between financial knowledge and retirement planning (β =.137, P =.000). Results further indicate that the moderation model is a superior model than the direct effect model as it accounts for more variance (60.5%) in retirement planning as shown by R² =.605 compared to 44.9% (R² =.449). This moderation process contributes to new knowledge in literature and theory. These study findings will be helpful to organizations and governments in developing policies and strategies related to retirement systems in the workplace. Limitations and recommendations have also been discussed.

Mediating effect of self-control on financial literacy and savings behaviour of rural women entrepreneurs

Background: Savings behaviour is crucial for any economic and investment activity. The ability of rural enterprises to save is difficult because of their ignorance of the benefits of savings, low-income levels and inability to commit personal savings, which falls to certain factors that include financial literacy (financial knowledge, financial attitude) and self-control.Aim: The article aims to examine the mediating effect of self-control on financial literacy (financial knowledge, financial attitude) and savings behaviour of rural women entrepreneurs in Mokwa Local Government, Niger State, Nigeria.Setting: The population comprised 340 rural women trained by the Department of Commerce on financial literacy applications in the 11 wards of Mokwa Local Government. A total of 175 respondents were identified using the Krejcie and Morgan sample size table.Methods: Primary quantitative data were collected using structured questionnaires and analysed using partial least square (PLS) path modelling.Results: The empirical results revealed that financial knowledge and financial attitude exerted a positive effect on the savings behaviour of rural women entrepreneurs.Conclusion: The conclusion drawn from the study is that the financial literacy of rural women entrepreneurs is empirically related to how they save.Contribution: Based on the research findings, the study recommends that government agencies supervising and coordinating the activities of entrepreneurs like SMEDAN and also financial institutions like Microfinance Banks should facilitate flexible, understandable and acceptable programmes that will enlighten rural entrepreneurs on the importance of savings for investment and the nation at large.

Digital financial literacy and financial well-being – evidence from India

PurposeThis study aims to examine the influence of digital financial literacy (DFL) on the financial well-being (FWB) of students in Andhra Pradesh, specifically exploring the factors of impulsivity and self-control. Both DFL and FWB are treated as multi-dimensional constructs in the study. The research delves into the impact of DFL dimensions, viz. digital financial knowledge, digital financial experience and digital financial skills, on both impulsivity and self-control. Subsequently, the study assesses the effects of impulsivity and self-control on financial well-being.Design/methodology/approachTo gather data, a questionnaire-based survey method was employed, reaching 475 university students through purposive sampling. The study utilizes confirmatory factor analysis for scale validation and structural equation modeling for hypothesis testing.FindingsThe results reveal a significantly negative influence of digital financial knowledge (DFK), digital financial experience (DFE) and digital financial skills (DFS) on impulsivity, while demonstrating a significantly positive impact on self-control. Additionally, the study finds that impulsivity negatively affects financial well-being, whereas self-control has a positive impact. Focusing on higher education institutions in Andhra Pradesh, the research highlights students’ limited concern for long-term financial planning.Originality/valueThis study underscores the relevance of understanding the crucial role of digital financial literacy in enhancing their financial well-being. The implications of these research findings are substantial and can be utilized to shape educational programs for students in higher education institutions. Such programs can guide institutions in imparting knowledge and skills related to personal finance management, particularly in the context of the increasing digitalization of financial transactions.

Are crypto-investors overconfident? The role of risk propensity and demographics. Evidence from Brazil and Portugal

PurposeThe crypto market is growing quickly, marked by a lack of fundamentals, and the risks are not yet fully comprehended by participants. Our goal is to investigate overconfidence in this market and analyze the role that risk propensity and certain demographics play.Design/methodology/approachWe conducted a survey in Brazil and Portugal, leveraging an online questionnaire disseminated via social media channels to engage a diverse adult population. We collected a total of 826 responses, addressing ethical considerations throughout the process. The data analysis was conducted using SPSS statistical software and logit regression modeling.FindingsOur study reveals that overconfidence is a notable bias that distinguishes individuals who invest in cryptocurrencies from those who do not. Although overconfidence and risk propensity are closely linked, they originate from distinct personal characteristics. Furthermore, our findings indicate that age and market experience positively correlate with overconfidence and negatively correlate with risk propensity. Financial knowledge, interestingly, did not prove to be a significant factor for cryptocurrency investment.Originality/valueOur research augments the existing literature on overconfidence, delving into this phenomenon in a new subdomain, and in doing so, it enriches our comprehension of the unique and still relatively under-researched cryptomarket. Moreover, we illuminate individual factors that sway the decision to invest in cryptocurrencies and should be considered by market participants.Highlights(1)Pioneering work examining the presence of overconfidence bias among crypto-investors, using a robust data set collected from a binational survey.(2)Verifies the relations among overconfidence, risk propensity, and demographics.(3)Examines the influence of age and experience on investment decisions, revealing a positive relationship with overconfidence and a negative correlation with risk propensity.(4)Logistic regression is used to determine the combined effect of overconfidence, risk propensity, and demographics on the decision to invest in cryptocurrencies.

Examining the Financial Literacy of Healthcare Professionals: A Research on a Provincial Health Directorate.

This research aimed to assess the financial literacy levels of healthcare professionals working at a Provincial Health Directorate and examine their relationships with various financial domains. The study utilized a cross-sectional online survey. The financial literacy scale was employed to assess the financial knowledge and compentencies of healthcare professionals, providing a structured evaluation of their understandig across various financial domains. Statistical analyses, including correlation analysis, independent samples t-test, and one-way ANOVA, were performed using SPSS-25 and R programs. A total of 240 participants took part, comprising 52.1% males and 47.9% females, aged between 20 and 65 years. Younger healthcare professionals (p=.017) and males (p=.001) demonstrated higher financial literacy levels. Significant correlations were found between financial literacy and domains such as investment instruments, debt and risk management, and personal finance management. Weak but positive relationships were observed between financial literacy and digital assets, indicating emerging trends in digital finance awareness. For instance, males exhibited higher proficiency in investment instruments and debt management, while younger professionals displayed higher knowledge in investment areas. The findings underscore the importance of targeted financial education for healthcare professionals, highlighting the need for sector-specific training programs. Enhanced financial literacy is essential for improving financial decision-making, ultimately benefiting both personal financial well-being and professional performance in the healthcare sector.

“Not a Lot I Could Do”: Challenges Facing College Peer Financial Mentors

ABSTRACT This study involved 54 peer financial mentors from seven institutions to explore their challenges when working with mentees. Challenges included: mentees presented financial concerns that exceeded the mentors’ ability, mentors frequently lacked the financial knowledge to provide highquality peer financial mentoring, and the shift in programming modality felt impersonal and introduced challenges. We conclude with recommendations for research, policy, and the administration of financial wellness and peer financial mentoring programs.

The role of emotional marketing in enhancing strategic customer behavior through financial knowledge: An analytical study of a sample of shopping malls in Iraq

The research aims to diagnose the logical relationships between emotional marketing and its role in enhancing strategic customer behavior through financial knowledge to reach results in the dynamic environment of shopping malls. The paper was designed in light of adopting the descriptive analytical approach to variables and collecting data and information through the questionnaire tool distributed to the shopping malls of the research sample. Using statistical analysis programs to reach the results, the study sample reached (25) shopping malls in the local environment of the country. The results showed that there is a threat in the local environment in which these malls operate through the entry of foreign investment projects in this field, which led to an increase in supply and competition in terms of quality, prices and delivery services to gain customers. The studied malls had to develop a strategy on how to attract and retain customers by using emotional marketing practices and relying on financial knowledge to influence strategic customer behavior, as the current and future customer has become rapidly changing in tastes, needs, desires and transformation through technological development and the world has become a small village that can be viewed at any time and in short periods of time. The research also concluded that the threat of new investment through the establishment of new malls as new investment projects affects supply and demand in the environment in which these studied malls operate. The research also concluded that there is a correlation and influence relationship between the research variables of the studied malls, which includes a package of results that benefit the research community. The paper aims to bridge the knowledge gap between the variables of the paper in the dynamic environment by using emotional marketing as a competitive tool in influencing strategic customer behavior through financial knowledge to gain and maintain the current customer and gain the potential customer.

Remittance investment climate analysis: Ascertaining the local development potential of overseas remittances in Philippine rural hometowns

This paper analyzed the potential of remittances in developing the rural hometowns of migrants and their families. Researchers employed a mixed methods tool, the Remittance Investment Climate Analysis in Rural Hometowns (RICART), for over eight years in six municipalities in the Philippines. We found that there is no common trend among municipalities that combining a sound investment climate, an ample number of financial institutions, high levels of residents’ financial literacy and an active program for migrants and their families all ensure remittances-induced hometown investing. Improving rural residents’ financial knowledge and instituting investment climate reforms may help direct remittances to local development.

Các yếu tố ảnh hưởng đến ý định mua trước trả sau đối với hình thức thanh toán trực tuyến của thế hệ Z

In recent years, Buy Now - Pay Later forms of payment are becoming popular, however, the core basic principle of “Buy Now Pay Later” in providing credit Interest-free benefits for consumers are being challenged by inflation and rising interest rates. This study was conducted to build a model to study factors affecting the intention to buy now - Pay later for online payment methods of generation Z, including: (1) Perceived benefits, (2) Perceived ease of use, (3) Perceived risks,(4) Digital financial knowledge, (5) Social influence. Using a survey of 306 sample members, the authors concluded that the Social Influence factor has the strongest impact on the intention to use Buy now - Pay later for customers. with the online payment method of generation Z. From there, the authors propose appropriate solutions to help the government, consumers and businesses doing business on e-commerce platforms.

Psychological factors and retirement planning behavior among Chinese university faculty members: The mediating effects of retirement planning intention

ABSTRACT Informed retirement planning impacts the wellbeing of individuals and broader society. However, the current related literature contains a limited understanding of the challenges faced by Chinese university faculty members concerning retirement planning. This study developed a model that combines social cognitive theory (SCT) and the theory of planned behavior (TPB) to investigate the effect of attitude toward retirement planning, social group support, perceived financial knowledge, and future time perspective on retirement planning intention, as well as the mediating influence of retirement planning intention. Data collection was conducted from 514 faculty members of public universities in China through an online questionnaire survey. The findings indicated that perceived financial knowledge demonstrated the strongest positive influence on retirement planning intention, followed by future time perspective and social group support, with retirement planning intention as a mediator. This research offers implications for policymakers, retirement benefits consultants, and financial institution practitioners. It suggests that implementing financial education workshops and personalized planning services could promote retirement planning behavior.

The Effect of Financial Literacy on Financial Behavior of Micro, Small and Medium Enterprises (SMEs) in Ulugawo District, Nias Regency

Low financial literacy has significant implications, including restricted access to financial institutions and mismanagement of money and wealth. A common consequence of low financial literacy is the limited access to financial services, often restricted to banks. This issue is particularly prevalent among Micro, Small, and Medium Enterprises (MSMEs), where poor financial literacy hinders both business growth and economic development. Many individuals lack the financial knowledge necessary to manage investments, pay bills on time, and maintain a budget, all of which are essential for sound financial management. In the case of MSME actors in Ulugawo sub-district, observations reveal that many do not have a clear understanding of financial management, nor do they maintain proper financial records. This lack of financial knowledge often leads to difficulties in organizing expenditures and managing finances. As a result, many MSMEs struggle to present their financial standing clearly, making them ineligible for capital credit access. The purpose of this study was to examine the impact of financial literacy on the financial behavior of MSME actors in Ulugawo, Nias. The research employed a quantitative descriptive approach, with data collected through questionnaires. The data analysis revealed that financial literacy accounts for 70% of the variation in financial behavior among MSMEs in Ulugawo, indicating that the remaining 30% is influenced by other factors not covered in this study. The t-test results for the financial literacy variable (X) showed a t-value of 2.191, with a significance level of 5%. The calculated r-value was greater than the critical r-value (r-calculated > r-estimated, 1.6759), confirming the significant influence of financial literacy on financial behavior.

The Influence of Financial Knowledge and Financial Attitudes on Financial Management Behavior on UMKM Actors in Lahomi Sub-District

This research aims to determine the influence of financial knowledge and financial attitudes towards financial management behavior among MSMEs in Lahomi sub-district. This research is included in associative research. This result of the research shows that (1) there is a positive and significant influence of financial knowledge on financial management behavior among MSMEs in Lahomi District (2) there is a positive and significant influence of financial attitudes on financial management behavior among MSMs in Lahomi District (3) there is a positive and not significant influence on the financial management behavior of MSMEs in Lahomi District.

Exploring financial graph literacy: determinants and influence on financial behavior

Purpose Graphs are widely used in the banking and finance domain to support consumers’ decision-making process, but subjects differ in their ability to understand them. This study aims to detect the determinants of the ability to read and process financial information conveyed in the graphical format, i.e. financial graph literacy (FGL) and the relationship between FGL and subjects’ actual financial behavior (FB). Design/methodology/approach Data are collected by administering a structured questionnaire to the Italian adult population (n = 502). The survey includes different sections aimed at collecting information about sociodemographic and socioeconomic variables, financial literacy and FB. The econometric analyses are developed using OLS and Poisson regressions. Findings The results show that gender, geographical area, education, marital status and income are crucial determinants of FGL. Moreover, the analysis reveals that an increase in the FGL indicator is associated with a higher propensity for individuals to purchase banking or financial products or actively manage financial resources; results are robust, even controlling for financial knowledge. Originality/value Although previous research investigates the impact of graphs in financial decision-making, no studies measure the ability of consumers to read and interpret financial information conveyed in the graphical format. This study is the first to investigate the determinants of FGL and link it to actual FB. Implications for policymakers, regulatory and supervisory authorities and financial intermediaries are discussed.

Knowledge and Skills Are Not Enough—Exploring the Determinants of Financial Behavior Formation

ABSTRACTUnderstanding how young people learn to manage their finances responsibly can guide interventions to improve their financial health and stability in the short and long term, yet merely increasing financial knowledge and skills is ineffective. Psychological and environmental factors appear to be important determinants of financial behavior, yet such factors have long been neglected in the literature. The present study appears to be the first to assess empirically the contribution of intuitive and rational mental capacity as well as opportunities and motivation to financial behavior formation. We surveyed 2299 young adults at 229 high schools and universities in Croatia. Through structural equation modeling, we found that intuitive and rational thinking as well as motivation and opportunity substantially influenced the formation of financial behavior, whereas financial knowledge played a negligible role. Rational thinking was a stronger determinant than intuitive thinking in the case of healthy financial behavior, while the opposite was true in the case of impulsive consumption. These insights may help develop effective interventions for promoting positive financial habits among young adults.

The impact of financial literacy on SMEs lending conditions

This study investigates the influence of entrepreneurs' financial literacy on the banking-lending terms extended to small and medium-sized enterprises (SMEs). We employed structured interviews with account managers from the second-largest bank in Brazil. The findings demonstrate that financial literacy positively impacts SME bank lending terms across three dimensions: knowledge, behavior, and attitudes. Entrepreneurs with higher levels of financial knowledge are more adept at negotiating favorable credit terms, thereby reducing administrative costs. Financial attitudes serve as a signal to banks of entrepreneurs' confidence and professional management capabilities. Additionally, heightened financial behavior enables entrepreneurs to advocate for more sophisticated financial products. Results achieved are further evidence of the positive impact that financial literacy can bring to SMEs by providing a basis for making sound financial decisions. This research provides valuable insights into how assessing lending practices through the lens of financial literacy can inform policy design, aiming to transform regions with low economic development by leveraging credit as a tool for poverty alleviation. The research aimed to analyze the influence of financial literacy on the lending conditions of SMEs from the perspective of financial institution agents involved in credit provision.

Evaluating robo-advisors through behavioral finance: a critical review of technology potential, rationality, and investor expectations

The mini review assesses the value propositions of robo-advisors through the lens of behavioral finance. Despite their promise of data-driven, rational investment strategies, robo-advisors may not fully replicate the personalized service of human financial advisors or eliminate human biases in decision-making. A content analysis of 80 peer-reviewed articles and publications was conducted, focusing on the intersection of financial technology and behavioral finance. Literature was retrieved using The Chicago School University Library's OneSearch and the EBSCO host database, with key terms including “robo-advisor,” “investment behavior,” “risk tolerance,” “financial literacy,” and “affective trust.” The review identifies four key limitations of robo-advisors: (1) their inability to replicate the service-relationship of human advisors; (2) the presence of human bias in supposedly rational algorithms; (3) the inability to minimize market risk; and (4) their limited impact on improving users' financial literacy. Instead, robo-advisors temporarily compensate for a lack of financial knowledge through passive investment strategies. The findings suggest that integrating behavioral finance principles could enhance the predictive power of robo-advisors, though this would introduce additional complexities. The review calls for further research and regulatory measures to ensure that these technologies prioritize investor protection and financial literacy as they continue to evolve.

The Impact of Financial Knowledge on College Students' Financial Behavior: A Systematic Literature Review

This research explores the influence of financial knowledge on the financial behavior of students. The low level of financial knowledge among students can lead to financial problems, such as high debt. The aim of this research is to provide a clearer framework regarding how financial knowledge influences the financial behavior of students. Using the PRISMA-based Systematic Literature Review (SLR) method, it shows that the higher the financial knowledge of students, the better their financial behavior, enabling them to manage their finances well, such as budgeting, managing debt, and saving. Financial education in higher education is crucial for shaping responsible financial behavior, so appropriate interventions can help students develop better financial skills for their future.

Financial Inclusion and Rural Development: Empowering Micro-entrepreneurs in Lubuk Beringin, Bungo Regency, Jambi, Indonesia

Micro-entrepreneurs in rural Indonesia often face challenges in accessing financial services and developing sustainable business practices. This community service initiative aimed to empower micro-entrepreneurs in Lubuk Beringin, Bungo Regency, Jambi, Indonesia, by promoting financial inclusion and rural development. A mixed-methods approach was employed, incorporating surveys, focus group discussions, and in-depth interviews to assess the needs and challenges of micro-entrepreneurs. Based on the findings, a comprehensive program was designed and implemented, encompassing financial literacy training, business development workshops, and access to microcredit facilities. The program resulted in increased financial literacy, improved business skills, and enhanced access to financial resources among the participants. Data indicates a 20% increase in average monthly income and a 15% rise in business savings among participating micro-entrepreneurs six months after program completion. Additionally, the program fostered a sense of community and collaboration among the participants. This initiative demonstrates the vital role of public administration in empowering micro-entrepreneurs through financial inclusion and rural development strategies. By providing access to financial knowledge, skills, and resources, public administration can contribute to sustainable economic growth and improved livelihoods in rural communities.

Psychological Determinants of Investment Decisions: Analyzing Financial Behavior in Personal Investments

Understanding the psychological factors that influence investor behavior is critical in the dynamic world of financial markets. Financial conduct encompasses the decisions and behaviors individuals exhibit in managing their finances, including investments in various asset classes. Factors such as risk tolerance, cognitive biases, emotional influences, and financial knowledge significantly shape investment outcomes. Gaining long-term financial success requires mastery over these behavioral aspects. This study investigates the influence of three psychological factors—information asymmetry, problem framing, and risk propensity—on the investment decisions of 220 active investors trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). A quantitative research approach was employed, utilizing a structured questionnaire to collect data. Statistical analyses, including regression and correlation analysis, were used to assess the relationships between these psychological variables and investment behaviors. The results reveal significant correlations between psychological factors and investment decisions. Information asymmetry, problem framing, and risk propensity were found to strongly influence individual investor choices. These findings shed light on the intricate role that cognitive biases and psychological processes play in shaping financial decision-making. The study's findings offer valuable insights into the psychological drivers behind investment behavior. By highlighting the impact of these factors, the research contributes to both academic understanding and practical applications for financial professionals. The results underscore the importance of enhancing financial literacy and investor education, enabling more informed decision-making and promoting improved financial outcomes.

Navigating Time-Inconsistent Behavior: The Influence of Financial Knowledge, Behavior, and Attitude on Hyperbolic Discounting

Hyperbolic discounting is a psychological phenomenon in which individuals prioritize smaller immediate rewards over larger future rewards. Time-inconsistent behavior is deemed irrational as it negatively impacts savings and investment, investment in financial knowledge, and long-term financial and personal well-being. This study hypothesizes that improving financial knowledge, promoting positive financial behavior, and fostering a future-oriented financial attitude can mitigate hyperbolic discounting bias and that these three components of financial literacy enable investors to make long-term economic decisions maximizing utility. We analyzed the responses of 114,170 active investors in Japan to examine the interactions between financial knowledge, behavior, and attitude. Our findings reveal a strong negative relationship between these dimensions and hyperbolic discounting, underscoring their crucial role in shaping individuals’ intertemporal preferences. For researchers, our results highlight the need to integrate multidimensional aspects of financial literacy into investigations of intertemporal discounting behaviors. Policymakers should implement holistic financial education programs that improve knowledge, transform behavior, and shape attitudes. Financial institutions and advisors should prioritize programs that mitigate hyperbolic discounting tendencies among clients. This study represents a significant advancement in the research on financial literacy, offering a comprehensive framework for future studies and practical applications aimed at improving financial decision-making outcomes.