Financial literacy and financial well-being of low-income women in Malaysia: a capability view

The low-income group is viewed as a vulnerable segment of the society, with many difficulties in various aspects of life, including finances. While the government is concerned with the financial well-being (FWB) of its citizens, particularly those in low-income groups, little is known about the FWB of women in this group in Malaysia. The objectives of this study are two-fold. First, we investigate the effect of low-income women’s financial literacy (FL) on their FWB. Second, we examine the moderating effect of capability on the relationship between low-income women’s FL and FWB. A survey of 320 low-income women in Malaysia was conducted. The results showed that FL, in terms of financial behavior, had a significant positive effect on the FWB of low-income women. FL in terms of financial attitude and financial knowledge, on the other hand, had significant negative effects on the FWB of low-income women. However, capability did not moderate the relationship between any of the FL components and FWB. The results provide insights for relevant parties to develop strategies to improve the FWB of low-income women in Malaysia.