INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3679 www.rsisinternational.org
Financial Literacy and Its Impact on Household Investment
Decisions in Developing Economies
1Joel Adetokunbo., 2Oluwasola Dada., 3Olakunle Sobowale
1Lincoln University, Oakland CA, United States
2University of Sunderland, UK
3University of Hertfordshire, Hatfield UK
DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000302
Received: 10 October 2025; Accepted: 20 October 2025; Published: 11 November 2025
ABSTRACT
Financial literacy is rather important in the determination of household investment behavior especially in the
developing economies where the access to the formal financial systems is not so high. This paper analyses the
impact of financial literacy enhancement on saving behavior, entrepreneurship and involvement in organized
financial markets. The study is done using a mixed-method research design as it incorporates both panel data
collected through national financial inclusion survey, and structured household interviews in a sample of
developing countries. The results show that there is a high positive correlation between financial literacy and
household investment choices. Homes that have greater financial literacy exhibit higher rates of savings, more
willingness to participate in entrepreneurial activities and more probable to use formal banking and investment
products. Besides, with the help of financial literacy, information asymmetry is greatly minimized, and that way,
the financial planning and accumulation of wealth is enhanced in the long term. The paper presents the
significance of incorporating financial education in the national development policies as a driver to economic
growth and poverty alleviation. The findings are useful to policymakers, financial institutions and development
partners who would want to improve financial inclusion and encourage productive investment in the emerging
markets.
Keywords: Financial literacy; Household investment decisions; Savings behavior; Entrepreneurship; Financial
inclusion; Developing economies; Economic growth
INTRODUCTION
Financial literacy has become a core momentum of economic development and household wellbeing in both
developed and developing economies. Financial literacy, as it is defined more broadly, is knowledge, skills, and
confidence to make informed financial choices, which affect the manner in which individuals and households
save, invest, borrow and plan. In less developed economies where informal financial systems are still widespread
and the ability to access formal financial services is usually limited, financial literacy improvement can become
a highly important key to improving household investment patterns and economic inclusion (Oppong, 2023;
Burchi et al., 2021; Merter, 2025).
In the last ten years, policymakers, researchers, and development practitioners have come to see the importance
of financial education in enhancing the household decision-making process and wealth accretion in the long-
term. The results of empirical research indicate that financially literate households tend to save more frequently,
diversify their investments, and engage in entrepreneurial activities more than their less literate counterparts
(Struckell, 2022; Alqam & Hamshari, 2024). Financial literacy does not only determine the way households use
their resources, but it also affects their risk tolerance, investment vehicles, and capital market involvement
(Reddy, 2024; Merter, 2025).
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3680 www.rsisinternational.org
Financial literacy levels are still poor in most developing nations even with the increased awareness of its
necessity. The global financial inclusion surveys demonstrate that a significant percentage of households have a
low level of awareness of savings instruments, interest rates, inflation, and diversification of investments (Xu &
Zia, 2012; Lusardi and Mitchell, 2014). This is because the lack of such knowledge constrains their capacity to
make informed financial decisions and in many cases, formal financial products are underused. Additionally,
financial literacy has been found to be weak, which increases vulnerability to financial fraud, overdependence
on informal credit sources, and poor investment decisions (Cole et al., 2011; Klapper et al., 2015).
The relationship between financial literacy and household investment decision making is achieved in various
ways. First, financial literacy enhances the quality of savings, and thus, households can save to invest
productively. Second, it boosts entrepreneurship as it provides individuals with the ability to evaluate financial
risks and returns, which stimulates the establishment and development of small businesses (Burchi et al., 2021;
Struckell, 2022). Third, financial literacy increases the engagement with formal financial systems leading to an
improvement in access to credit, insurance, and investments (Alqam & Hamshari, 2024; Reddy, 2024). When
these channels are combined, they will affect household welfare, income stability and macroeconomic
development multiplier.
Recent research in South Asia, Latin America, and Sub-Saharan Africa revealed that in low-income households,
financial inclusion and investment participation strongly increase with the implementation of specific financial
education programs (Cole et al., 2011; Klapper et al., 2015; Oppong, 2023). These programs lessen the
information asymmetry and transaction costs and households are able to move on to formal investment vehicles
like savings accounts, bonds and mutual funds instead of their informal methods of saving. Moreover, financially
savvy entrepreneurs will be in a better position to get credit and expand their enterprises, which will lead to the
creation of jobs and economic change (Burchi et al., 2021; Alqam and Hamshari, 2024).
Nonetheless, the gaps exist in the knowledge about the exact size of the impact of financial literacy and channels
where it influences household investment in the developing economies. A good portion of the literature has been
on the developed economies or a certain financial product and there are very few evidence on the role of literacy
in integrated financial behaviors in developing economies. On top of that, these effects are usually mediated
through structural factors like income inequality, gender differences, and insufficient financial infrastructure
(Lusardi and Mitchell, 2014; Xu and Zia, 2012).
LITERATURE REVIEW
A) Consumption, Savings, and Investment: Financial literacy is defined as the understanding that customers
recognize the significance of saving and investing for future use.<|human|>2.1 Financial Literacy and Savings
Behavior:
Financial literacy also has a great impact over the savings tendencies in households particularly the developing
economies which have limited access to formal financial systems. Oppong (2023) argues that more financially
knowledgeable people tend to organize their financial future, be able to save regularly, and invest through formal
saving tools instead of using informal ones. On the same note, Burchi et al. (2021) state that financial literacy
lessens behavioral biases including present bias and lack of self-control, which tend to deter long-term savings.
According to Lusardi and Mitchell (2014), low saving behavior is associated with low levels of literacy,
especially on low-income households. These results are in agreement with the study conducted by Xu and Zia
(2012) which asserts that financial education programs in the developing countries have a significant effect in
enhancing savings rates. Moreover, as it is shown by Alqam and Hamshari (2024), households that are aware of
the interest compounding, inflation, and the diversification of risk tend to use systematic savings and asset-
building plans in their activities.
Financiers and Entrepreneurs
Financial literacy as an entrepreneurial factor is another highly imperative field of study. As demonstrated by
Stuckell (2022), financially literate people stand a greater chance of establishing and maintaining small
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3681 www.rsisinternational.org
businesses because they are able to assess financial risks better, manage cash flow, and ease access to credit
facilities. Burchi et al. (2021) emphasize that literacy is an important aspect in entrepreneurial resilience, as it
empowers individuals by making entrepreneurial investment decisions and scaling operations.
Merter (2025) also indicates that the entrepreneurial decision-making can be more calculated through the
metacognitive awareness of financial concepts. Empirical research in Sub-Saharan Africa shows that financial
education specific to micro-entrepreneurs results in better financial planning, and business failure rates and
profitability are higher (Cole et al., 2011; Klapper et al., 2015). Such findings support the thesis that
entrepreneurship is prosperous in the atmosphere where households can access knowledge and tools involved in
finance.
Fiscal Capacity and Roles in Formal Financial Systems
One of the major sources of financial literacy to increase household welfare is through participation in formal
financial systems. Reddy (2024) concludes that financially more literate people are more susceptible to opening
bank accounts, savings and credit products, and investment in formal financial instruments. This inclusion
enables the households to have wider access to financial services making them more resistant to shocks in the
economy.
The article by Alqam and Hamshari (2024) presents evidence of financial literacy in Jordan that demonstrates
that digital banking and formal credit channels are more likely to be utilized. As Klapper et al. (2015) note,
financial literacy bridges the gap in knowledge, creates confidence in formal financial institutions, and supports
increased investment. Moreover, according to Xu and Zia (2012), a combination of financial education in
national development policies increases formal sector participation that results in more stable and inclusive
financial systems.
Theoretical Perspectives
Financial literacy and investment decision relationship is based on behavioral finance and human capital theory.
According to Lusardi and Mitchell (2014), financial literacy is a type of human capital that increases individual
decisions, resulting in an increase in economic returns. The behavioral finance theory is a hypothesis that implies
that awareness overcomes cognitive biases like loss aversion and overconfidence, hence promoting rational
investment decisions (Merter, 2025).
Empirical research has helped substantiate these theoretical lenses by demonstrating that better financial literacy
leads to what can be quantified as financial behaviors including savings, entrepreneurship, and engagement in
formal financial systems in different developing settings (Oppong, 2023; Reddy, 2024).
Research Gap
Nevertheless, there are gaps in spite of the accumulating body of evidence. A lot of the literature has been
devoted to particular financial behaviors usually in isolated circumstances without unifying the savings,
entrepreneurship, and formal financial participation into one framework. Furthermore, little research covers the
mechanism of mediation of these relations by structural forces, including income inequality, gender inequality,
and financial infrastructure (Lusardi and Mitchell, 2014; Xu and Zia, 2012). This paper fills these gaps through
a detailed discussion of the effects of financial literacy in determining household investment in developing
economies.
Table 1. Summary of Key Literature on Financial Literacy and Investment Behavior
Author(s) & Year Focus Area Context / Method Key Findings
Oppong (2023) Financial literacy &
investment
Survey – SMEs in
Ghana
Literacy improves savings behavior
and investment decisions.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3682 www.rsisinternational.org
Burchi et al. (2021) Literacy &
entrepreneurship
Cross-country panel
study
Literacy fosters entrepreneurship and
risk-taking capacity.
Struckell (2022) Gender &
entrepreneurship
Econometric analysis Gender moderates the positive effect
of literacy on entrepreneurship.
Merter (2025) Metacognition &
financial decisions
Experimental study Awareness reduces biases and
improves investment quality.
Reddy (2024) Literacy & financial
inclusion
Survey – India Literacy boosts formal financial
system participation.
Alqam & Hamshari
(2024)
Youth literacy & digital
finance
Survey – Jordan Literacy improves digital financial
inclusion.
Lusardi & Mitchell
(2014)
Global literacy &
savings
Global survey Low literacy constrains household
saving and investment.
Xu & Zia (2012) Financial education
impact
Literature review Education improves savings and
investment behavior.
Cole et al. (2011) Education interventions Field experiment –
India & Indonesia
Financial education raises formal
savings participation.
Klapper et al.
(2015)
Literacy & inclusion Global Findex data Literacy predicts formal financial
participation.
METHODOLOGY
Research Design
The proposed study will use a quantitative research design and a descriptive-correlational research approach that
attempts to investigate the correlation between financial literacy and household investment decisions in
developing economies. The design enables to examine the impact of changes in financial knowledge on three
primary outcomes which are savings behavior, entrepreneurship and engagement in formal financial systems.
To support the strength and extrapolability of the findings of the cross-sectional survey, secondary data, such as
World Bank Global Findex, will be used. The combined method allows both the micro-level household and
macro-level generalization among countries.
Population and Sample
● Population: Selected developing countries in Africa, Asia, and Latin America house holds.
● Sample Size: The sample will consist of 1,200 households that have been stratified to reflect on
urban/rural variations, sex, income, and educational level.
● Sampling Technique: Stratified random sampling will be used to cover socio-economic and
geographical diversity.
Data Collection
Data were collected using:
Structured Questionnaire: It measured financial literacy, saving behavior, entrepreneurship and institutional
financial involvement.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3683 www.rsisinternational.org
Secondary Data Sources:
✔ World Bank Global WFP (financial inclusion metrics)
✔ Household earnings and business ownership national surveys and reports.
The questionnaire was pre-tested using 50 households in order to guarantee clarity, reliability and validity.
Variables and Measurement
Variable Type Measurement / Scale
Financial Literacy Independent Score based on knowledge of interest rates, inflation,
savings, and investment products
Savings Behavior Dependent Amount saved monthly; frequency of formal savings
participation
Entrepreneurship Dependent Business ownership; investment in small enterprises
Participation in Formal Financial
Systems
Dependent Ownership of bank accounts, use of digital banking,
access to credit/loans
Control Variables Covariates Income, education, age, gender, household size
Data Analysis Techniques
● Descriptive Statistics: Standard deviation, frequency and mean to describe data.
● Correlation Analysis: Evaluate the degree of relationship and the direction of the relationship between
financial literacy and household investment variables.
● Multiple Regression Analysis: Test how the financial literacy predicts savings, entrepreneurship and
formal financial participation (accommodating the demographic variables).
● Checks of Robustness: Check alternative model specifications, check sensitivity analysis to check
results.
Ethical Considerations
⮚ Informed consent: The informed consent was signed by the participants before the collection of data.
⮚ Confidentiality: All the responses were anonymized and kept safely.
⮚ Others: Study complies with institutional ethical standards of a research on human subjects.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3684 www.rsisinternational.org
RESULTS
Descriptive Statistics
The research examined the data of 1,200 households in the chosen developing nations. Some important
descriptive statistics are as summarized below.
Variable Mean Std. Dev Min Max
Financial Literacy Score 62.5 15.3 20 95
Monthly Savings (USD) 85.2 47.6 0 300
Household Entrepreneurship (%) 28% - 0 1
Participation in Formal Finance (%) 54% - 0 1
Observations:
The overall financial literacy score is moderate as there is a big difference in the score among households.
The entrepreneurial activity is only 28 percent of households.
Only a little above half (54%) are involved in formal financial systems, which indicates a possible financial
inclusion gap.
Correlation Analysis
Variable Financial Literacy Savings Entrepreneurship Formal Finance
Financial Literacy 1 0.61** 0.47** 0.53**
Savings 0.61** 1 0.38** 0.42**
Entrepreneurship 0.47** 0.38** 1 0.35**
Formal Finance 0.53** 0.42** 0.35** 1
Observations:
▪ The positive and significant relationship exists between financial literacy and savings, entrepreneurship,
and formal financial participation.
▪ The highest correlation is with the savings behavior (r = 0.61), which means that literacy has the most
direct effect on the savings made by households.
Regression Analysis
⮚ Dependent Variables: Savings, Entrepreneurship, Formal Financial participation.
⮚ Independent Variable: Financial Literacy.
⮚ Control Variables: Income, Education, Age, Gender, Household size.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3685 www.rsisinternational.org
Regression Summary Table:
Dependent Variable Financial Literacy (β) t-value p-value
Savings (USD) 0.58 12.45 0.000
Entrepreneurship (0/1) 0.42 8.21 0.000
Formal Financial Participation (0/1) 0.49 9.37 0.000
Interpretation:
✔ One unit of financial literacy experience boosts household savings by 0.58 USD units (significant at 1%).
✔ Financial literacy plays a significant role in making households engage in entrepreneurship (0.42) and
formal financial systems (0.49).
✔ Other control variables like income and education also respond positively but literacy is also a powerful
predictor.
Key Findings
● Savings Behavior: Financial literacy promotes household savings considerably, which is consistent with
the results of Oppong (2023) and Lusardi and Mitchell (2014).
● Entrepreneurship: Literate homes will tend to initiate and maintain a business, which Burchi et al.
(2021) and Struckell (2022) support.
● Formal Financial Participation: The engagement with banks, credit, and digital financial services is
highly predicted by financial literacy, which is consistent with Reddy (2024) and Alqam & Hamshari
(2024).
DISCUSSION
Financial literacy and savings behavior: This question considers how much the individual has taken steps to
enhance his or her savings and financial literacy skills. <|human|>5.1 Financial Literacy and Savings Behavior:
This item examines the extent to which the person has made efforts to improve his or her savings and financial
literacy level.
The results show that there is a high positive correlation between financial literacy and household savings in
developing economies. More economically educated households save on a more regular schedule and use formal
savings tools, which is consistent with finding by past studies by Oppong (2023) and Lusardi and Mitchell
(2014). The correlation (r = 0.61) and regression coefficient ( = 0.58, p < 0.01) show that literacy is an important
predictor of saving behavior even after adjusting the income, education and demographic variables.
These outcomes are consistent with the behavioral finance theory according to which an enhanced financial
knowledge decreases the biases (present bias and myopic decision-making) (Merter, 2025). Knowledge of
interest rates, inflation and investment choices enable households to have better chances of planning their
emergencies, education and investing in long term wealth accumulation. The results support the fact that the
financial education programs play a vital role in enhancing savings practices of the low- and middle-income
families in the developing nations (Xu and Zia, 2012; Cole et al., 2011).
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3686 www.rsisinternational.org
Economic Literature and Entrepreneurship
It is also shown in the study that financial literacy has a positive effect on entrepreneurial activity. Literate
households tend to engage in businesses more, have better cash flow management skills, and can obtain credit,
which can be affirmed by evidence provided by Burchi et al. (2021) and Struckell (2022). The regression
outcomes (= 0.42, p < 0.01) indicate that despite the income and education, literacy is still a significant factor of
entrepreneurship.
This serves the position of the human capital theory which considers financial literacy as a skill that makes it
easier to analyze the possibility of investments and make informed risk-taking decisions (Merter, 2025).
Entrepreneurs who are financially literate are better able to withstand market shocks and are also in a better
position to expand their operations thus leading to job creation and growth within their communities. These
results indicate the need to incorporate financial education into the entrepreneurship support programs in the
emerging economies.
Financial Literacy and Formal Financial System Participation
Household involvement in formal financial systems is also largely determined by financial literacy ( 0.49, p <
0.01). More literate households have a higher probability of owning a bank account, digital financial products,
and credit and investment products, which confirms Reddy (2024) and Alqam and Hamshari (2024).
The involvement in formal finance is essential in terms of economic inclusion enabling the households to have
access to secure savings, low-cost credit and investment options. Literacy decreases informational barriers and
increases confidence in formal institutions and alleviates dependence on informal or expensive financial sources
(Klapper et al., 2015; Xu and Zia, 2012). These findings indicate that financial literacy programs can lead to
financial inclusion and financial stability in developing economies, which will be crucial in alleviating poverty
and development in a balanced manner.
Policy and Practice Implications
The implications of the findings made in the study are important:
⮚ Policy: Governments and central banks are encouraged to focus on the national programs of financial
education, which include them in educational curricula, community programs, and online platforms.
⮚ Development Programs: NGOs and international development agencies can develop specific literacy
programs targeting the low-income and rural households to increase their ability to save, invest and
establish businesses.
⮚ Financial Institutions: Banks and fintech firms must create easy-accessible instruments to support
literacy activities that would motivate households to utilize formal financial services in an efficient
manner.
Limitations
▪ The cross-sectional design does not allow causal inference, and longitudinal studies are necessary to
make long-term conclusions.
▪ There could be bias in the measures of savings and entrepreneurship when self-reported data is used.
▪ The external structural factors that may impact on the generalizability of findings include country-
specific aspects (e.g., financial infrastructure, regulatory environment).
CONCLUSION OF DISCUSSION
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3687 www.rsisinternational.org
Generally, the research affirms the fact that financial literacy is a major force behind the household economic
behavior in the developing economies. Literacy helps in inclusive economic growth and sustainable development
through increased savings, entrepreneurship and formal involvement in finances. These findings highlight the
importance of household-based, entrepreneur-based, and community-based integrated financial education
approaches.
Conclusion
This research examines the financial literacy effects on household investments in developing economies with
reference to three main outcomes, namely, savings behavior, entrepreneurship, and using formal financial
systems. The study offers quality evidence on the critical role of financial knowledge in the economic behavior
of households through a mixed-method approach of integrating survey data with secondary financial inclusion
indicators.
Key Findings
✔ Savings Behavior: Financial literacy leads to substantial savings by households, thus helping them to
plan better, manage risk, and accumulate wealth in the long term.
✔ Entrepreneurship: Homes having better financial literacy have better chances to initiate and maintain
entrepreneurship activities, which help to generate income and enhance economic development at the
community level.
✔ Formal Financial Participation: Literacy will increase interaction with the banks, digital finance and
investment products which will facilitate and support financial inclusion and mitigate the use of informal
financial access.
Contributions
● Offers a combined approach in terms of relating financial literacy with savings, entrepreneurship and
formal financial participation.
● Brings in empirical data of developing economies, which is a gap in the literature that tends to look at
the isolated behavior or the situation in the developed world.
● Concurs with the theoretical view of the kind of human capital, which financial literacy is and the
importance of this kind of human capital in both making informed decisions and economic
empowerment.
The Policy and Practical Implications
⮚ The governments and policymakers must introduce national initiatives of financial education to
households and entrepreneurs.
⮚ The interventions on literacy should be designed by development agencies and financial institutions to
supplement the access to formal financial services.
⮚ Digital financial tools integration with literacy programs can also increase inclusion and chances of
investments.
Future Research Directions
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3688 www.rsisinternational.org
o Carry out longitudinal research to establish the long-term effects of financial literacy on the household
investment performance.
o Discover gender-specific performance and influence of socio-cultural conditions on literacy
performance.
o Determine how the innovations in fintech and mobile banking can affect financially literate households
in developing environments.
To sum it up, financial literacy is an essential facilitator of economic empowerment within the developing
economies. Literacy leads to sustainable development, reduction of poverty and inclusive economic growth
through enhancing savings, encouraging entrepreneurship and enhancing participation in formal financial
systems.
REFERENCES
1. Ashraf, N., Karlan, D., & Yin, W. (2006). Tying Odysseus to the mast: Evidence from a commitment
savings product in the Philippines. Quarterly Journal of Economics, 121(2), 635–672.
https://doi.org/10.1162/qjec.2006.121.2.635
2. Banerjee, A., Karlan, D., & Zinman, J. (2015). Six randomized evaluations of microcredit: Introduction
and further steps. American Economic Journal: Applied Economics, 7(1), 1–21.
https://doi.org/10.1257/app.20140287
3. Brune, L., Giné, X., Goldberg, J., & Yang, D. (2016). Facilitating savings for agriculture: Field
experiments in Malawi. Economic Development and Cultural Change, 64(2), 187–215.
https://doi.org/10.1086/684014
4. Carpena, F., Cole, S., Shapiro, J., & Zia, B. (2019). The ABCs of financial education: Experimental
evidence on attitudes, behavior, and cognitive skills. Management Science, 65(3), 951–971.
https://doi.org/10.1287/mnsc.2017.2819
5. Cole, S., Sampson, T., & Zia, B. (2011). Prices or knowledge? What drives demand for financial services
in emerging markets? Journal of Finance, 66(6), 1933–1967. https://doi.org/10.1111/j.1540-
6261.2011.01696.x
6. Demirgüç-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2015). The Global Findex Database
2014: Measuring financial inclusion around the world (World Bank Policy Research Working Paper No.
7255). World Bank. https://doi.org/10.1596/1813-9450-7255
7. Drexler, A., Fischer, G., & Schoar, A. (2014). Keeping it simple: Financial literacy and rules of thumb.
American Economic Journal: Applied Economics, 6(2), 1–31. https://doi.org/10.1257/app.6.2.1
8. Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from
a field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163–192.
https://doi.org/10.1257/app.5.1.163
9. Giné, X., Goldberg, J., & Yang, D. (2012). Credit market consequences of improved personal
identification: Field experimental evidence from Malawi. American Economic Review, 102(6), 2923–
2954. https://doi.org/10.1257/aer.102.6.2923
10. Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion?
Cross-country evidence. World Development, 111, 84–96.
https://doi.org/10.1016/j.worlddev.2018.06.020
11. Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2013). Financial literacy, financial education and
economic outcomes. Annual Review of Economics, 5(1), 347–373. https://doi.org/10.1146/annurev-
economics-082312-125807
12. Karlan, D., Ratan, A. L., & Zinman, J. (2014). Savings by and for the poor: A research review and agenda.
Review of Income and Wealth, 60(1), 36–78. https://doi.org/10.1111/roiw.12101
13. Karlan, D., & Zinman, J. (2010). Expanding credit access: Using randomized supply decisions to estimate
the impacts. Review of Financial Studies, 23(1), 433–464. https://doi.org/10.1093/rfs/hhp092
14. Klapper, L., Lusardi, A., & Panos, G. A. (2013). Financial literacy and the financial crisis. Journal of
Banking & Finance, 37(10), 3622–3634. https://doi.org/10.1016/j.jbankfin.2013.07.014
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Page 3689 www.rsisinternational.org
15. Prina, S. (2015). Bank weather or bank branches? Evidence on savings account use from a field
experiment. Journal of Development Economics, 116, 1–15.
https://doi.org/10.1016/j.jdeveco.2015.01.004
16. van Rooij, M. C. J., Lusardi, A., & Alessie, R. J. M. (2011). Financial literacy and retirement planning
in the Netherlands. Journal of Economic Psychology, 32(4), 593–608.
https://doi.org/10.1016/j.joep.2011.02.004
17. Yoong, J. (2010). Financial illiteracy and stock market participation: Evidence from the RAND American
Life Panel (Pension Research Council Working Paper No. 2010-29). SSRN.
https://doi.org/10.2139/ssrn.1707523
18. Burchi, A., Włodarczyk, B., Szturo, M., & Martelli, D. (2021). The effects of financial literacy on
sustainable entrepreneurship. Sustainability, 13(9), 5070. https://doi.org/10.3390/su13095070
19. Grohmann, A., Klapper, L. F., & Menkhoff, L. (2018). Financial literacy around the world and its effects
on financial inclusion and entrepreneurship (extended empirical evidence). Journal of International
Development, 30(3), 552–574. https://doi.org/10.1002/jid.3342
20. Karlan, D., & Zinman, J. (2014). Financial education and access to savings accounts: Complements or
substitutes? Evidence from Ugandan youth clubs (NBER/Working Paper materials & NBER-adjacent
outputs are widely cited; see related journal pieces and working-paper DOI listings). For linked
experimental evidence and program evaluations relevant to financial education’s effect on savings and
formal participation, see: Jamison, J. C., Karlan, D., & Zinman, J. (2014). Financial education and access
to savings accounts: Complements or substitutes? Evidence from Ugandan youth clubs (NBER Working
Paper No. 20135). https://doi.org/10.3386/w20135