Financial Literacy and Demographic Factors in Karachi City of Pakistan

Abstract

Considering the vigorously dynamic fluctuations in the monetary condition, particularly in financial/budgetary markets, it is urged to improve speculators’ money managing knowledge. Financial proficiency involves making well aware and efficient financial choices. The present examination explores the socio-economic factors defining Pakistani investors’ financial literacy and effects of financial literacy on stock market investment decision. A (questionnaire) survey was developed based on 3 sections: The primary section included the measuring of demographic characteristics of respondents, the secondary was based on measuring financial literacy of respondents, whereas the last section was dedicated to measuring stock market investment decision of respondents.

Purpose – The motivation behind this study is to evaluate the financial proficiency of individual speculators/investors of the Karachi city of Pakistan who put resources into the Pakistan stock exchange, local financial market in Karachi. Likewise, it inspects the connection between financial education and the participation of the socio-economic-demographic components which influence the investment choice.

Design/methodology/approach – we articulated a modified questionnaire for our investigation, separated into three sections. The first part of which was dedicated to statistics of demographic factors. The subsequent part highlights factors influencing the speculation choice of the Pakistani speculators. The last section is committed to financial literacy utilizing examination-type, true and false, questions and incorporates 10 questions. Convenient sample of 231 of Pakistani national financial specialists/investors is utilized for this purpose.

Findings – The outcomes show that the financial literacy of Pakistani speculators’ is relatively higher than the average expected level. The financial education seen to be influenced by salary, sex, and employment status and work place activity. financial education exists paying little heed to the age of the respondents. We observed a “significant difference in the level of financial literacy between groups of respondents as per their sexual orientation. More specifically, females have a lower level of financial education than males. At last, the outcomes show that there is a significant relationship between financial literacy and investment decision. Results likewise show that respondents with higher financial literacy have higher stock holding as compared with those with low financial literacy.”

Originality/value – The present examination is viewed as significant and unique being one amongst the very few conducted in Pakistan's situation and Pakistani context. As far as we possibly know, no such examinations have been led with respect to estimating financial literacy in Pakistan or the connection between financial literacy level and the variables that influence the investment choices.