Financial knowledge and Literacy or Demographics: What determines the use of Financial Services in Pakistan?

Abstract

Objective: This study was aimed at evaluating the impact of knowledge related and demographic variables on the use of financial services in Pakistan. Methods/Statistical Analysis: The researchers interviewed 150 heads of households with the help of a structured interview schedule, from different parts of the country. The respondents were selected by using the stratified purposive sampling method. The data was analyzed with the help logistic regression and with help of Nvivo-10. Findings: The financial knowledge and information, income level and trust level have positive impact on the decision of using financial services and products in the country. On the contrary, general education level and numeric financial literacy, general level of education, although have an insignificant impact on the decision of using financial services and products. Results of the study highlight the importance of knowledge and information about financial services and products in the decision regarding the usage of financial services and products. Previous studies have focused on numeric and mathematical literacy, which, according to findings of this study is of lesser importance in promoting financial inclusion. Application/Improvements: Results from the study can be utilized by policy makers for devising effective programs for promoting financial literacy and for promotion of financial inclusion in the country. *Author for correspondence