Antecedents of the Youngster’s Awareness About Financial Literacy: A Structure Equation Modelling Approach

Financial literacy has been identified as an important functional area that attains a special concern in the Indian government policies and plans specially designed for the financial market. SEBI has issued various guidelines and awareness programs towards investment financial products, digital payment systems, consumer protection and so on. Therefore, the purpose of the present article is to analyze the level of financial literacy among youngsters in India. The study examined the relationship between the antecedents of financial literacy, that is, financial attitude, financial knowledge and financial behavior. The theoretical purposed model was tested with the help of primary data that was collected with the help of the self-structured questionnaire. A total of 647 responses were obtained from the respondents belonging to the holy city Mathura, Uttar Pradesh, India. To identify the financial literacy antecedents and their inter-relationship, exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modeling were applied to the collected data. The findings indicated that in the case of the Indian population, financial attitude and financial behavior were significantly associated with financial literacy. The moderation analysis reveals that males are more particular about financial knowledge and financial behavior in comparison to females. Respondents belonging to the age group of 26–30 years have better financial knowledge. Respondents who have income more than ₹800 thousand and below two years have more financial knowledge. This article contributes to the theoretical body of knowledge by providing insights about the interesting topic of financial literacy by identifying its antecedents. The study also highlights the impact of the demographic variables as moderators on the antecedents of financial literacy. The outcomes of the study are vital for the government in the designing of public policies. The findings are helpful for the educational program designers for the outlining of the programs and syllabus for the subjects taught in the schools and colleges. The findings are useful for the bank managers to understand the psychological behavior as well as demographic variables for the effective marketing and communication of their financial products.