DOI: https://doi.org/10.18371/fcaptp.v4i27.154303

CAUSAL RELATIONSHIP OF FINANCIAL LITERACY WITH INDICATORS OF THE FINANCIAL AND SOCIAL SECTORS

Inna Bielova, Viktor Oliinyk, Nataliia Nilova, Mariia Nilova

Abstract


In a situation where the growing likelihood of financial sector crises in both individual countries and globally, the issue of fragility of financial institutions as a result of significant credit, accumulation of "toxic" loans is becoming increasingly important. And low level of financial literacy of the population also plays an important role.

Low financial literacy of the population has many consequences, including: excessive credit, lack of proper responsibility for their own financial decisions, etc. All this, as a result, has an impact on the personal financial status, and even on the spread of poverty.

A significant contribution to the development of the theory, methodology and practical issues of financial literacy development has been made by the following famous scientists: A. Lusardi, O.Mitchell; A.Hasler; A. Meir, Y. Mugerman, O. Sade; V. R. Maarten, others.

At the same time, there are not enough scientific papers that highlight the peculiarities of influencing the level of financial literacy on the development of the financial and social sectors.

In this research, the task of checking hypotheses about the existence of a relationship between the level of financial literacy and the indicators of financial and social sectors development is set. The article deals with the relationship between the level of financial literacy and the indicators of the development of financial and social sectors according to the data of the EU-28 and countries of the world as a whole. The results are: as financial literacy grows, the borrowers less often take money from a private informal lender and from a family or friends and more frequently - from a financial institution; there is an inverse interrelation between the level of financial literacy among adults and the NPL (nonperforming loans); also, for the EU-28 countries, the direct interrelation between the severely materially deprived people (% of total population) and the NPL level has been confirmed.

The problem of raising the level of financial literacy should be a public priority in countries with high rates of "bad" loans, with widespread poverty.


Keywords


financial literacy; loans; non-performing loans; poverty.

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References


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GOST Style Citations


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ISSN (print) 2306-4994, ISSN (on-line) 2310-8770