BRIDGING FINANCIAL KNOWLEDGE AND FINANCIAL BEHAVIOUR: A SOCIO-ECONOMIC STUDY IN THE VIDARBHA REGION

Abstract

The financial literacy factor in identifying the financial behaviour of individuals is critical but there is always a broad gap between the content covered by financial literacy and the behaviour of individuals in relation to the making of financial decisions as far as the different socio-economic groups are concerned. The proposed study will be aimed at examining the relationship between financial knowledge, financial behaviour of limited residents within the Vidarbha region and how the socialeconomic factors such as income, education, occupation, age, and place of residence enters the picture. The research design was descriptive and analytic whereby primary data was utilized to get information concerning the respondents within the sample districts of the Vidarbha region through a structured questionnaire. Budgeting and savings management, credit and insurance awareness, investment awareness indicators, financial behaviour measure where actual practices such as saving habits, borrowing pattern, and risk management, and long-term financial planning were used to measure the levels of financial knowledge. The statistical tools used to analyse the data were descriptive statistics, correlation analysis and multiple regression analysis. The findings show that financial knowledge and financial behaviour are statistically related with each other and translation of financial knowledge into legal financial action is a powerful control of socio-economic status. Increased levels of education and income are also associated with better financial behaviour and even with basic financial knowledge the respondents that have low-income and rural background show low levels of behaviour. The article exposes the existence of contextual and structural issues, which pose a challenge to the effective utilization of financial literacy. The study will contribute to the literature available regarding a region-based empirical finding of Vidarbha and policy implications of the study in relation to the way to construct some financial literacy interventions. The findings demonstrate that there is need to come up with inclusive, contextually relevant financial education programmes that go beyond merely creating awareness but also focusing on behavioural change particularly in socioeconomically vulnerable groups.