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Understanding the Role of Financial Literacy in Enhancing Economic Stability and Resilience in Montenegro: A Data-Driven Approach

Author

Listed:
  • Ivana Katnic

    (Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro)

  • Milorad Katnic

    (Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro)

  • Marija Orlandic

    (Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro)

  • Marija Radunovic

    (Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro)

  • Ilija Mugosa

    (Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro)

Abstract

Financial literacy has emerged as a crucial factor in promoting economic stability and resilience, particularly in Montenegro. With the increasing complexity of financial products and the growing need for individuals to make sound financial decisions, the importance of financial literacy cannot be overstated. This study employs a quantitative, survey-based approach to explore the association between financial literacy levels and measures of economic stability, including savings rates, active debt management, and access to financial products. Data were collected through a representative, two-stage stratified sample of 1000 Montenegrin adults aged 18–79, ensuring comprehensive geographic coverage across all Montenegrin municipalities and balanced representation by gender and age. This stratification enables a detailed analysis of financial literacy trends across the population. Correlation analysis reveals that higher levels of financial literacy are associated with better financial practices, such as increased savings and responsible credit use, thereby enhancing economic resilience at the household level. Moreover, improved financial literacy contributes to sustainability by fostering long-term financial stability, reducing inequalities, and promoting inclusive economic growth. The findings suggest that financial literacy can mitigate the impact of economic shocks, emphasizing the need for policies that promote financial education as a tool for sustainable development. This study contributes to the literature on financial literacy in emerging economies and offers actionable insights for policymakers in Montenegro and similar contexts, highlighting financial education as a pathway to individual and national economic resilience.

Suggested Citation

  • Ivana Katnic & Milorad Katnic & Marija Orlandic & Marija Radunovic & Ilija Mugosa, 2024. "Understanding the Role of Financial Literacy in Enhancing Economic Stability and Resilience in Montenegro: A Data-Driven Approach," Sustainability, MDPI, vol. 16(24), pages 1-25, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:11065-:d:1545706
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    References listed on IDEAS

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    1. Nikola Fabris & Radoica Luburić, 2016. "Financial Education of Children and Youth," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 5(2), pages 65-79.
    2. Adele Atkinson & Flore-Anne Messy, 2012. "Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study," OECD Working Papers on Finance, Insurance and Private Pensions 15, OECD Publishing.
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    Cited by:

    1. Changhe Wu & Walton Wider & Mengxi Yang & Hao Wu & Nasyra Ab. Jamil & Muhammad Ashraf Fauzi & Eugene Burgos Mutuc, 2026. "Resilient futures: intellectual and thematic pathways in financial resilience research and their relevance to well-being," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-16, December.
    2. Tang My Sang, 2026. "Determinants of financial well-being: the roles of family financial socialization, financial literacy, financial inclusion, and propensity to plan," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 31(1), pages 1-14, March.
    3. repec:bjc:journl:v:12:y:2025:i:8:p:390-415 is not listed on IDEAS
    4. Benjamin Miranda Tabak & Débora H. Cardoso & Cristiano C. Silva, 2025. "Assessing the Drivers of Financial Vulnerability and Fraud in Brazil: The Critical Role of Financial Planning over Literacy," Sustainability, MDPI, vol. 17(20), pages 1-33, October.

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