A Study on Assessing the Financial Literacy among Employed Individuals in India

Financial literacy is the basic knowledge that people need to survive in the modern society (Kim, 2001). Financial literacy is defined as a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing (Organization for Economic Co-operation and Development (OECD)). Financial literacy of an individual is a gamut of his abilities and competencies that enables the individuals to respond effectively to the ever-changing personal and economic circumstances, yet is subject to alterations throughout the life cycle of the individual.

The purpose of this study is to understand the financial literacy among the employed individuals in India, which is one of the fastest emerging economy in the world. The study is conducted among employed individuals across three major cities using a structured questionnaire. Even though the financial literacy studies have been conducted in few states in India, this study would be original in capturing the literacy level in geographical purview covering the key cities in India. The findings on the financial literacy among employed individuals would benefit the policy makers, financial institutions to take suitable measures and to build regulatory frameworks to improve the delivery of financial services which would ultimately result in overall wellbeing of the individuals, families and communities.