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    How does financial literacy impact on inclusive finance?
    (Springer Nature on behalf of the Southwestern University of Finance and Economics, 2021-12-01) Hasan M; Le T; Hoque A
    Inclusive finance is a core concept of finance that makes various financial products and services accessible and affordable to all individuals and businesses, especially those excluded from the formal financial system. One of the leading forces affecting people's ability to access financial services in rural areas is financial literacy. This study investigated the impacts of financial knowledge on financial access through banking, microfinance, and fintech access using the Bangladesh rural population data. We employed three econometrics models: logistic regression, probit regression, and complementary log–log regression to examine whether financial literacy significantly affects removing the barriers that prevent people from participating and using financial services to improve their lives. The empirical findings showed that knowledge regarding various financial services factors had significant impacts on getting financial access. Some variables such as profession, income level, knowledge regarding depositing and withdrawing money, and knowledge regarding interest rate highly affected the overall access to finance. The study's results provide valuable recommendations for the policymaker to improve financial inclusion in the developing country context. A comprehensive and long-term education program should be delivered broadly to the rural population to make a big stride in financial inclusion, a key driver of poverty reduction and prosperity boosting.
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    The development of a complementary financial capability index : a thesis presented in partial fulfilment of the requirements for the degree of Doctorate of Philosophy in Finance at Massey University, Manawatu, New Zealand
    (Massey University, 2024-06-11) Wedlock, Meg
    Achieving behaviour change only through improved financial knowledge levels is difficult when taking into account other factors which influence an individual’s decision-making such as psychological factors, financial attitudes, and socio-demographic influencers. A deeper understanding of the relationship between psychological factors and financial capability levels provides educators and policymakers valuable insights to generate progression. Psychological biases are often innate, meaning individuals are usually not aware of the influence they may have on financial decisions. Education programmes which educate individuals on psychological influences as well as improving financial knowledge may collectively generate confidence and self-efficacy in one’s decision-making abilities. Therefore, a better understanding of financial decision-making is a critical investment in the social capital of society both today and in the future. Financial capability is an important behavioural element which contributes to the development of financial wellbeing at the individual and household level, as well as improving economic stability. Consequently, financial capability remains high on the priority list for governments seeking to improve retirement wellbeing and reduce reliance on debt funding and government funded benefits, thereby improving financial stability. This research seeks to investigate the influence of psychological factors on financial decision-making, providing findings which confirm the relationship between psychological factors and financial capability levels. Within a New Zealand context, this thesis proposes a complementary financial capability index developed in support of the financial wellbeing conceptual model developed by Kempson and Poppe (2018) and to further strengthen existing behavioural finance models. The complementary financial capability index is developed using data from the Australia and New Zealand Banking Group, and particularly focuses on incorporating measures of time orientation, self-control, locus of control, impulsivity, social status, and action orientation. Results of this study confirm the statistical significance of psychological factors independent of financial behaviour when measuring financial capability levels. The robustness of the proposed complementary financial capability index is tested on two different datasets under variable conditions. Significant results in both applications highlight the sensitivity of the index to changes in data inputs, while also confirming the ability of the model to produce financial capability scores despite changes in data inputs. To further investigate the relationship between psychological factors and financial decision-making and to understand the factors which influence financial behaviour in practice, a mixed methods study was undertaken on fourteen participants. The collection of survey data enables further applicability testing of the complementary financial capability index while thematic analysis of the one-on-one interview transcripts results in six key behavioural finance themes which further support the research objectives addressed in this thesis and provides valuable practical insights supporting existing behavioural finance literature. This investigation confirms the significance of psychological factors on financial capability levels, over and above what may be captured by traditional factors such as financial knowledge and financial behaviour. The findings of this thesis inform policymakers and education providers on the elements of the financial decision-making process that can be targeted to generate progression in the financial capability levels and consequent financial wellbeing of New Zealanders.
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    Young New Zealanders and retirement savings engagement: a longitudinal study update
    (2020-02-01) Matthews C; Reyers M; Stangl J; Wood P
    This report covers an interim update to the 20-year longitudinal study into how young New Zealanders learn about personal finance. The main longitudinal study, conducted at five-early intervals, launched in 2012 and comprised a cohort of New Zealanders aged 18 to 22 years, at that time. The second stage of the study took place in 2017 and the third stage will take place in 2022. Overall, the Longitudinal Study endeavours to understand issues related to the financial knowledge and financial education experience, both formal and informal, of the participants. Planned interim updates, such as this, enable on-going contact with the participants as well as providing a periodic snapshot of their financial knowledge progression and financial wellbeing. The study previously undertook interim updates in 2014 and 2016.
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    Young New Zealanders Ongoing Personal Finance Journey: A Longitudinal Study – Stage 2
    (Fin-Ed Centre, 2019-01-01) Matthews C; Reyers M; Wood P; Stangl J
    The report presents findings from the second stage of the Fin-Ed Centre’s 20-year longitudinal study, which tracks the financial knowledge, attitudes and behaviours of a group of New Zealanders through different life stages. The longitudinal study is unique in New Zealand. The first stage occurred in 2012 when the cohort was aged from 18 to 22 years. Now, five years on, the participants are aged from 23 to 27 years. The study will repeat again in 2022, 2027, and conclude in 2032. At study termination, the participants will range in age from 38 to 42 years. Of the original 350 cohort, 232 participated in the second phase of the study – a 66 percent retention rate. The study undertook interim updates in 2014 and 2016, which dealt with the topical issues of economic inclusion and housing affordability. The current focus is to determine how attitudes and behaviours have changed over the past five years as participants move into new life stages. The study finds young New Zealanders still rely on their parents for financial advice, despite many harbouring doubts about parental advice. Nearly half the participants said they had learned “everything” or “almost everything” from their parents. While this was down from two-thirds in 2012, the reliance on parental advice was surprising, given only 35 percent felt that their parents knew what was best for them in terms of their finances. When asked about how they expected to learn about money management in the future, parental advice still featured highly, but the dominant source, at 39 percent, was “life experiences.”
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    YOUNG NEW ZEALANDERS AND FINANCIAL RESILIENCE IN THE TIME OF COVID-19: A LONGITUDINAL STUDY UPDATE
    (Fin-Ed Centre, 2021-02-01) Matthews C; Reyers M; Wood P; Stangl J
    This report covers an interim update to the 20-year longitudinal study into how young New Zealanders learn about personal finance. The main longitudinal study, conducted at five-early intervals, launched in 2012 and comprised a cohort of New Zealanders aged 18 to 22 years, at that time. The second stage of the study took place in 2017 and the third stage will take place in 2022. Overall, the Longitudinal Study endeavours to understand issues related to the financial knowledge and financial education experience, both formal and informal, of the participants. Planned interim updates, such as this, enable on-going contact with the participants as well as providing a periodic snapshot of their financial knowledge progression and financial wellbeing. The study previously undertook interim updates in 2014, 2016 and 2019.
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    Young New Zealanders’ Ongoing Personal Finance Journey: A Longitudinal Study– Stage 3
    (Fin-Ed Centre, 2023-08-01) Matthews C; Wood P; Stangl J
    The report presents findings from the third stage of the Fin-Ed Centre’s 20-year longitudinal study, which tracks the financial knowledge, attitudes and behaviours of a group of New Zealanders through different life stages. The longitudinal study is unique in New Zealand, using participants identified randomly from the New Zealand electoral roll from six geographic locations. The sample is not demographically representative of the New Zealand population in terms of gender and ethnicity, with a likely self-selection bias, but the demographics between samples are generally stable. The first stage occurred in 2012 when the cohort was aged from 18 to 22 years, with stage 2 following in 2017. Now, five years further on, in the third stage the participants are aged from 28 to 32 years. The study will repeat again in 2027, before concluding in 2032. At study termination, the participants will range in age from 38 to 42 years. Of the original 350 cohort, 232 participated in the third phase of the study – a 66 percent retention rate. The study undertook interim updates in 2014, 2016, 2019 and 2020, which dealt with topical issues including economic inclusion, housing affordability and the COVID-19 pandemic. The focus of this report is to consider how participants’ attitudes and behaviours have changed over the past five years as they move into new life stages. While the study finds young New Zealanders still have some reliance on their parents for financial information, the parental influence has dropped, with parents now the source of “everything” or “almost everything” learned about finance for just 26 percent of participants. Life experiences had replaced parents as the most popular source of information, and was expected to dominate in the future. The gender gap in financial literacy is narrowing, with a 17 percent increase in the average score for females compared to just 6 percent for males. Overall, there was an improvement in financial literacy. In addition, there was an improvement in participants’ self-assessed literacy, returning to the self-confidence of 2012; however, the gender gap also remained with only 29 percent of females assessing their financial literacy as “Very Good” or “Excellent” compared to 44 percent of males. Part of the improvement in financial literacy may reflect the higher proportion who reported having taken steps to proactively enhance their money management skills, including a much higher proportion of participants reporting talking to financial professionals such as bank staff and financial planners/counsellors.
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    Framing the financially literate subject : an analysis of financial literacy discourse in New Zealand : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in English at Massey University, Palmerston North, Manawatū, New Zealand
    (Massey University, 2022) Chapelle, Peri
    The purpose of this study is to analyse the discursive framing of the financially literate subject and their needs within New Zealand. The first part of the study identifies and traces key themes within the framing of the financially literate subject, using documents derived from OECD publications and NZ governmental institutions. Working with the critical conjunction of rhetorical analysis and critical discourse analysis informed in part by the work of Foucault, the role of financial literacy in contemporary New Zealand society is addressed through analysis of a case study based on a public debate in New Zealand about the ethics of investment in munitions by providers of the government-supported pension plan, KiwiSaver. The first part of the thesis puts KiwiSaver in a broader policy context by examining documents from the OECD that were influential in setting the framework, rationale and approach for the New Zealand government’s initiatives to restructure pension plans and encourage a change in the population’s savings habits and citizens’ grasp of financial principles. As it happened, the introduction of KiwiSaver in 2007 coincided with the onset of the global financial crisis, which saw a shift in the framing of the validation of the financially literate subject from a saving imperative to a need to manage individual risks and protect the market. These capabilities of managing risk and protecting the market, depicted as inherent to financially literate populations, manifest through the expectation that all those who participate in the market would preserve it through informal regulation based on informed consumer choice. The second part of the thesis presents a case study of public reaction to the media exposé of a financial scandal that broke in August 2016 when it was discovered that KiwiSaver funds were being invested in companies manufacturing illegal munitions. Through analysis of selected newspaper articles and Twitter commentary, the thesis emphasises the complexity of the relationship between the expectations of financial literacy on the part of the government, OECD and financial sector, versus the realities of the financial marketplace. In tension with the emphasis on individual responsibility within official and institutional discourses of financial literacy, the exchanges via Twitter reveal the desire for, and partial practice of, a more civic-focused, collective way of interacting via the financial markets. The case study serves to illustrate the apparatuses of power operating in the field of financial literacy. Analysing the discursive production of the financially literate subject and the imperative rhetoric surrounding financial literacy will provide a fuller understanding of the construction and conceptualisation of the financially literate subject, the social power relations inherent in the drive towards improved financial literacy, and the strategic goals being pursued. Ultimately, the thesis will contribute to our understanding of financial literacy as an ideological framework.
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    Gender differences in financial capability and the implications for retirement adequacy in New Zealand : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Finance at Massey University, Palmerston North, New Zealand
    (Massey University, 2018) Wedlock, Meg
    Empirical studies fail to extensively explore the relationship between gender and financial capability, particularly in relation to retirement adequacy. For this study, financial capability is defined as the behaviour, knowledge, attitude and ability to make decisions towards financial wellbeing; a financial theory that builds on the common concepts of financial inclusion and financial literacy. Literature exploring financial capability identifies a direct link with increased retirement planning. Ultimately, gender affects much of what is traditionally thought to impact financial capability; income, education, ethnicity and gendered social stigmas. This thesis seeks to explore the relationship between gender, financial capability and one’s ability to achieve retirement adequacy. The first hypothesis for this thesis is that a gender difference exists in financial capability and financial literacy levels of men and women. Lissington’s (2018) study measured two variables of specific interest: financial literacy and financial capability scores. These variables were tested independently using a two-sample T-test to compare male and female mean scores. Results were not sufficient to reject the null hypothesis of no difference between gender means for financial literacy or financial capability. That is, this study does not support a significant gender difference in financial literacy and financial capability levels for 50-80-year olds in New Zealand. The second purpose of this thesis is to identify whether the gender gap in financial capability found in empirical studies translates to a disparity in retirement adequacy. Using the online survey data from Lissington’s (2018) study, a binary logistic regression model was applied to test the explanatory power of gender on retirement adequacy. Controlling for income, education and ethnicity, women were found to be less likely to achieve retirement adequacy for pre-retirees only. The findings of this study enhance the understanding and progression of financial capability and retirement wellbeing, especially for New Zealand resident women. Its intended purpose is to contribute to the literature on gender and financial behaviour and guide policymakers to further explore and address gender disparities in financial capability and retirement adequacy.
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    Why financial literacy matters : an educational programme with practical daily applications : a thesis presented in partial fulfillment of the requirements for the degree of Master of Arts in Education at Massey University
    (Massey University, 2007) Hailwood, Kim
    Financial services and products have become increasingly accessible, complex and sophisticated in recent decades. There is now a huge variety, not only of financial service providers from whom to choose, but also of actual products and services. This transformation of financial services and the level of interaction required means that an individual now needs increased levels of understanding and knowledge of the sector to make decisions appropriate to their needs and circumstances. This thesis emphasises the importance of ensuring that the teaching of financial education is embedded in the New Zealand school system to enable all students to leave school prepared for the rights and responsibilities of adult life. Financial literacy, like reading and writing, affects the well-being of every individual. It is important to recognise that inadequate financial knowledge can be a substantial obstacle. This is not a minor issue or a side issue. Ultimately financial education is a decisive issue because it is a measure of whether an individual understands the forces that significantly affect the quality of their life.
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    The relationship between financial capability, financial competence and household economic wellbeing in rural Fijian households in Naitisiri Province, Fiji : a thesis presented in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Management at Massey University, Palmerston North, New Zealand
    (Massey University, 2010) Sibley, Jonathan; Sibley, Jonathan
    The study examined the use of money by households in a monetising rural Fijian community, and developed and tested a model of financial competence, bringing together previously disparate strands in the literature to better explain the relationship between the financial competence of those who make financial decisions on behalf of the household and the economic wellbeing of the household. Ex post facto field experiment methodology was used, with control and treatment groups sampled from villages in Naitisiri Province, Fiji that had participated in a financial capability development intervention comprising a financial literacy training workshop and a rural banking service. The study found evidence of a positive relationship between villagers’ levels of functional literacy and their levels of financial knowledge and skill and financial inclusion (as measured by ownership of a bank account). Evidence was also found to indicate a positive relationship between villagers’ levels of financial knowledge and skill and financial inclusion, and their level of competent financial behaviour. This relationship appears to be moderated by villagers’ attitude to money. Men generally evidenced greater financial knowledge and skill than women, but lower levels of competent financial behaviour. Evidence of a positive relationship between the economic wellbeing of the household and the level of competent financial behaviour of the household’s principal financial decision makers was also found. The findings of the study have implications for policy. Low levels of functional literacy may lead to self‐exclusion from financial capability development initiatives which may impede engagement with the formal financial system. The study found evidence to support Robinson’s (2001, 2002) argument that the extension of existing institutional retail financial services is likely to be more successful in reducing levels of financial exclusion than the promotion of poverty‐lending based microfinance schemes. The findings also suggest accurate targeting of training programmes to enhance financial knowledge and skill is required. There is a requirement for further research to validate the theoretical model and determine modalities for extending the competency approach to international development in a wider range of contexts. Within the context of Pacific Island States, there is a requirement for baseline studies of financial competence.