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Impact of financial literacy training on the financial decisions of rural households in Nepal

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  • Shyam Kumar Karki

    (Soka University)

  • Adino Andaregie

    (Soka University)

  • Isao Takagi

    (Soka University)

Abstract

Financial education plays a significant role in poverty reduction and sustainable economic growth. It also increases individuals' financial well-being. Unfortunately, global financial literacy is low, and in developing countries, it is far below the global average. Nepal is a developing country with low financial literacy. Therefore, this study aimed to analyze the impact of financial literacy training on financial literacy levels and financial decisions among 399 randomly selected rural households in Bhojpur District, a rural area in Nepal. Multiple linear and logit regression models were used to analyze the data. The results revealed that financial literacy training increased the financial literacy level of training participants compared with that of non-participants. Education, financial literacy training, and migration of family members (personal migration history and plans to migrate) were other significant predictors. Respondents' financial and economic behavior was influenced by their financial literacy level, sex, age, education, family size, whether the respondent lives with parental family, and whether the respondent has migrated family members. The study suggested well-organized and inclusive financial literacy training program interventions to improve rural individuals' financial and economic decisions.

Suggested Citation

  • Shyam Kumar Karki & Adino Andaregie & Isao Takagi, 2024. "Impact of financial literacy training on the financial decisions of rural households in Nepal," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(2), pages 149-173, June.
    • Handle: RePEc:spr:inrvec:v:71:y:2024:i:2:d:10.1007_s12232-023-00438-3
    DOI: 10.1007/s12232-023-00438-3
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    More about this item

    Keywords

    Financial literacy; Impact; Financial behavior; Multiple regression; Logit;
    All these keywords.

    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G50 - Financial Economics - - Household Finance - - - General

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