Development of a financial literacy model for individuals in India using structural equation modelling

The study examines the determinants of Islamic financial inclusion in Indonesia by applying Structural Equation Modelling (SEM) and Binary Logistic Regression. Through a field survey across Indonesia’s five main islands, the study gathered responses from 291 primary data samples. The study discovered that Islamic financial inclusion in Indonesia is determined by both the demand and supply sides. Two most significant determinants of Islamic financial inclusion in Indonesia from the demand side are financial literacy and social influence while on the supply side is human capital. The study also includes references and policy recommendations to help Indonesia’s financial regulators in formulating effective policies and strategies to foster the country’s Islamic financial inclusion agenda.

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Financial literacy as a mediator of personal financial health during COVID-19: A structural equation modelling approach

Emerald Open Research ◽

10.35241/emeraldopenres.13735.2 ◽

2021 ◽

Vol 2 ◽

pp. 59

Author(s):

Swati Anand ◽

Kushendra Mishra ◽

Vishal Verma ◽

Taruna Taruna

Keyword(s):

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Financial Education ◽

Household Wealth ◽

Mediating Effect ◽

Literacy Programs ◽

Financial Health ◽

Equation Modelling ◽

Modelling Approach

The coronavirus disease 2019 (COVID-19) pandemic has become a global humanitarian challenge. This scourge has impacted people from all walks of life as well as every economic sector and activity, from travel to automotives, hotels to banking, and supply chain to retail. The pandemic has affected not only physical and mental health but also financial health. Studies have examined the pandemic’s economic impact, but very few have examined its impact on personal finances. Efforts to contain the pandemic’s spread, such as lockdowns, have resulted in suspended business operations throughout the world that have intensified joblessness. To prepare and protect people from such unforeseen situations, financial education and planning are necessary. We attempt to expand the evidence on this issue by applying a structural equation modelling approach to identify the mediating role of financial literacy programs in preparing and protecting household wealth against sudden worldwide setbacks. The research design is descriptive and exploratory using snowball sampling technique. The data was collected through an internet survey. In total, 400 survey responses were obtained. After testing the measurement model for key validity dimensions, the hypothesised causal relationships are examined in several path models. The results indicated that coronavirus awareness exerts a direct or indirect influence on the financial health of individuals through financial literacy. We conclude that financial literacy has a full mediating effect on the personal finance of individuals during the COVID-19 pandemic. The findings not only contributed to the need and understanding of financial literacy but also have managerial implications. Financial literacy programs provide investment advice and suggestions which are actionable and also work to help individuals to come out stronger in terms of knowledge and skill set when the COVID-19 crisis passes.

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Financial literacy as a mediator of personal financial health during COVID-19: A structural equation modelling approach

Emerald Open Research ◽

10.35241/emeraldopenres.13735.1 ◽

2020 ◽

Vol 2 ◽

pp. 59

Author(s):

Swati Anand ◽

Kushendra Mishra ◽

Vishal Verma ◽

Taruna Taruna

Keyword(s):

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Financial Education ◽

Household Wealth ◽

Mediating Effect ◽

Literacy Programs ◽

Financial Health ◽

Equation Modelling ◽

Modelling Approach

The coronavirus disease 2019 (COVID-19) pandemic has become a global humanitarian challenge. This scourge has impacted people from all walks of life as well as every economic sector and activity, from travel to automotives, hotels to banking, and supply chain to retail. The pandemic has affected not only physical and mental health but also financial health. Studies have examined the pandemic’s economic impact, but very few have examined its impact on personal finances. Efforts to contain the pandemic’s spread, such as lockdowns, have resulted in suspended business operations throughout the world that have intensified joblessness. To prepare and protect people from such unforeseen situations, financial education and planning are necessary. We attempt to expand the evidence on this issue by applying a structural equation modelling approach to identify the mediating role of financial literacy programs in preparing and protecting household wealth against sudden worldwide setbacks. The research design is descriptive and exploratory using snowball sampling technique. The data was collected through an internet survey. In total, 400 survey responses were obtained. After testing the measurement model for key validity dimensions, the hypothesised causal relationships are examined in several path models. The results indicated that coronavirus awareness exerts a direct or indirect influence on the financial health of individuals through financial literacy. We conclude that financial literacy has a full mediating effect on the personal finance of individuals during the COVID-19 pandemic. The findings not only contributed to the need and understanding of financial literacy but also have managerial implications. Financial literacy programs provide investment advice and suggestions which are actionable and also work to help individuals to come out stronger in terms of knowledge and skill set when the COVID-19 crisis passes.

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Development of a Financial Literacy Model for Individuals in India Using Structural Equation Modelling

International Journal of Business Innovation and Research ◽

10.1504/ijbir.2020.10028599 ◽

2020 ◽

Vol 1 (1) ◽

pp. 1

Author(s):

Monita Mago ◽

Sarita Thakur

Keyword(s):

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Equation Modelling

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Analysis of Factors Determining Financial Literacy using Structural Equation Modelling#

SDMIMD Journal of Management ◽

10.18311/sdmimd/2018/19998 ◽

2018 ◽

Vol 9 (1) ◽

pp. 1-11

Author(s):

R. Venkataraman ◽

Thilak Venkatesan ◽

◽

Keyword(s):

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Equation Modelling

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Pengaruh Product Knowledge dan Financial Literacy terhadap Investment Decisions dengan Investor Behavior sebagai Variabel Intervening

Jurnal Intelektualita Keislaman Sosial dan Sains ◽

10.19109/intelektualita.v10i1.8830 ◽

2021 ◽

Vol 10 (2) ◽

pp. 273-281

Author(s):

Ghina Alvia Rahman ◽

Maya Panorama ◽

Peny Cahaya Azwari

Keyword(s):

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Investment Decisions ◽

Partial Least Square ◽

Least Square ◽

Investor Behavior ◽

Product Knowledge ◽

Purposive Sampling ◽

Equation Modelling

Penelitian ini bertujuan untuk mengetahui seberapa besar keputusan investasi investor dalam memilih produk investasi Sukuk di kota Palembang. Dalam penelitian ini data yang dikumpulkan dengan menyebarkan google form terhadap 100 responden investor kota Palembang dengan teknik pengambilan sampel purposive sampling. Analisis dilakukan dengan menggunakan metode Structural Equation Modelling (SEM) berbasis partial least square (PLS). Hasil analisis menunjukkan bahwa product knowledge berpengaruh terhadap investor behavior, financial literacy berpengaruh terhadap investor behavior, product knowledge tidak berpengaruh terhadap investment decisions, financial literacy berpengaruh terhadap investment decisions, investor behavior berpengaruh investment decisions, product knowledge berpengaruh terhadap investment decisions melalui investor behavior, financial literacy berpengaruh investment decisions melalui investor behavior.

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Do the effects of individual factors on financial risk-taking behavior diversify with financial literacy?

Kybernetes ◽

10.1108/k-10-2016-0281 ◽

2017 ◽

Vol 46 (10) ◽

pp. 1706-1734 ◽

Cited By ~ 7

Author(s):

Sibel Dinç Aydemir ◽

Selim Aren

Keyword(s):

Locus Of Control ◽

Risk Taking ◽

Financial Literacy ◽

Structural Equation Modelling ◽

Structural Equation ◽

Financial Risk ◽

Financial Behavior ◽

Individual Factors ◽

Content Type ◽

Equation Modelling

Purpose This study aims to examine the roles of individual factors on risky investment intention as an indicator of risky financial behavior. Design/methodology/approach The data were collected from a survey instrument and composed of 496 individuals’ responses. The authors exploited structural equation modelling and multigroup structural equation modelling for direct and indirect effects, respectively. Findings Results indicate that emotional intelligence and locus of control have a positive impact on financial risk-taking, while risk aversion in general has the negative one. Although financial literacy does not have a direct effect on risky financial behavior, it has important role as a moderator variable, interacting with external locus of control. Originality/value The authors expect this study to contribute into behavioral finance literature in two ways. First, they investigate joint and relative effects of four major factors (i.e. emotional intelligence, locus of control, risk aversion in general and financial literacy) identified in the literature on financial risk-taking of individual investors. Each belongs to a different venue in an individual’s psyche and therefore is expected to influence financial risk-taking through different mechanisms. However, the research arguing their roles on the financial risky behavior directly is very limited. Investigating their individual effects is likely to provide unique insights into our understanding of risky financial behavior. Second, the authors also posit and manifest that the effects of the first three of the aforementioned factors on risk-taking intentions are moderated by financial literacy. This finding is likely to provide rather valuable insights pertaining to the emergence of risk-taking behaviors and may shed light on the root reasons behind equivocal findings in previous research regarding the effect of each factor.

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