International Journal of Business Ethics in Developing Economies

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Financial Literacy as the Key to Financial Inclusion


Affiliations
1 Professor, Department of Commerce, University of Mysore, Mysuru, Karnataka, India
2 Research Scholar, Department of Commerce, University of Mysore, Mysuru, Karnataka, India
     

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Financial inclusion is one of the most important tools for the sustainable growth of an economy. The pace of financial inclusion will be determined by how the marginalised, without knowledge of banking, are taught the basics of dealing with money. Financial literacy is now becoming a new trend in developed and developing countries, to spread awareness on budgeting, money management, saving and investment, credit, insurance, and so on. Globally, only one in three adults show an understanding of basic financial concepts (Klapper et al., 2015). Many schemes are undertaken by the government to ensure an inclusive growth. There are many factors that act as barriers in attaining financial inclusion, with the lack of financial literacy at the top (Atkinson & Messy, 2013). There is no upper limit for financial literacy, as the developments and new instruments in the financial markets are growing. Therefore, the financial regulators are bringing initiatives to increase the financial literacy of the people so that they become wiser investors and assist in the wealth creation of the economy. The present paper is descriptive in nature and analyses the conceptual aspects of financial literacy and financial inclusion, with the help of secondary sources of information such as earlier literatures, news bulletins, books, and so on.

Keywords

Financial Inclusion, Financial Literacy, NSFE, NCFE
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  • Financial Literacy as the Key to Financial Inclusion

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Authors

Ashoka M. L
Professor, Department of Commerce, University of Mysore, Mysuru, Karnataka, India
Aswathy P
Research Scholar, Department of Commerce, University of Mysore, Mysuru, Karnataka, India

Abstract


Financial inclusion is one of the most important tools for the sustainable growth of an economy. The pace of financial inclusion will be determined by how the marginalised, without knowledge of banking, are taught the basics of dealing with money. Financial literacy is now becoming a new trend in developed and developing countries, to spread awareness on budgeting, money management, saving and investment, credit, insurance, and so on. Globally, only one in three adults show an understanding of basic financial concepts (Klapper et al., 2015). Many schemes are undertaken by the government to ensure an inclusive growth. There are many factors that act as barriers in attaining financial inclusion, with the lack of financial literacy at the top (Atkinson & Messy, 2013). There is no upper limit for financial literacy, as the developments and new instruments in the financial markets are growing. Therefore, the financial regulators are bringing initiatives to increase the financial literacy of the people so that they become wiser investors and assist in the wealth creation of the economy. The present paper is descriptive in nature and analyses the conceptual aspects of financial literacy and financial inclusion, with the help of secondary sources of information such as earlier literatures, news bulletins, books, and so on.

Keywords


Financial Inclusion, Financial Literacy, NSFE, NCFE

References