A STUDY ON FINANCIAL LITERACY AMONG THE RESIDENTS OF MIRA-

BHAYANDAR

A project submitted to

University Of Mumbai for Partial Completion of The Degree of Bachelor of

Management Studies

Under The Faculty of Commerce

By-
SHAIKH AYAN ASLAM
SEAT NO:

Under The Guidance of Dr. (Mrs.) SANCHITA DATTA

Royal College of Arts, Science & Commerce.

SEM – 3

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 DECLARATION BY LEARNER

I, the undersigned Mr. SHAIKH AYAN ASLAM, hereby declare that the work embodied in this project
work ,” A STUDY ON FINANCIAL LITERACY AMONG THE RESIDENTS OF MIRA-
BHAYANDAR” forms my own contribution in the research work carried out under the guidance of
DR. (MRS.) SANCHITA DATTA, is result of my own research work and has not been previously
submitted in any other University for any other Degree or Diploma in this or any other university.

Wherever reference has been made to previous works of others, it has been clearly indicated as search
and included in the bibliography.

I further declare that all information in this document has been obtained and presented in accordance
with academic rules and ethical conduct.

Name and Signature of Learner

SHAIKH AYAN ASLAM

Certified By

Name and Signature of Guiding Teacher

DR. (MRS.) SANCHITA DATTA

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 ROYAL COLLEGE OF ARTS ,SCIENCE & COMMERCE. CERTIFICATE
This is to certify that Mr. SHAIKH AYAN ASLAM has worked and duly completed the project work for
the degree of bachelor’s in management studies under the faculty of commerce in the subject of Research
Methodology and his project is entitled, “ A STUDY ON FINANCIAL LITERACY AMONG THE
RESIDENTS OF MIRA-BHAYANDAR” under my supervision. I further certify that the entire work
has been done by the learner under my guidance and that no part has been submitted previously for any
Degree or Diploma of any University.

It is his own work, and the facts are reported by his personal findings and investigations.

Name and Signature of Guiding Teacher

DR. (MRS.) SANCHITA DATTA

Date Of Submission: 25th May 2021

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 ACKNOWLEDGMENT

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous. I would like to acknowledge the following as being idealistic
channels and fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank the Founder of our College, Prof. A. E Lakdawala, for giving
me the opportunity to study and explore the course of Accounting & Finance.

I would like to thank my Principal, Prof. Kalpana Jain Patankar, for providing the
necessary
facilities required for completion of this project.

I would also like to express my sincere gratitude towards my Project Guide, Dr. (Mrs.)
Sanchita Datta whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout
my project.

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 EXECUTIVE SUMMARY

The economy of any country is driven by investments leading to capital formation. Savings lead to
investments. In India, the household sector occupies the prime place as far as savings is concerned in
comparison to institutional sectors, whether it is private or public. Every government in the world would like
households to save, as personal saving constitutes the largest segment of national saving in most of the
countries. This is followed by savings in the corporate sector, with government savings being least or
negligible in most of the countries. According to the economists and central bankers, for sustained economic
growth of a country, a rise in domestic savings is necessary. As per the 2013 RBI annual report, household
savings for 2012-13 are 22.3 percent of the GDP. Every individual earning money spends it to meet his or
her own personal needs or to fulfil the basic needs of his or her family.
Individuals use money for various purposes including funding their daily household expenses and expenses
incurred for buying luxuries for a better life. Money earned is used to fund some immediate expenses or
saved to meet some future needs. Those who spend less than what they earn end up with savings. These
savings can be accumulated and grown to fund various goals, such as, for education, marriage, vehicle
purchase, house purchase or for acquiring any other asset, for medical emergencies and for meeting the post-
retirement financial needs In general, the entire amount saved is not held in cash, but is invested in different
asset classes or investment avenues in order to get a return, which can be in the form of regular income or
capital appreciation or sometimes both. Women, in general are savers according to the Association of
Bankers 2013 report. Even in India, under the recently launched Janadhan Scheme, many new bank accounts
were opened. In rural areas, major part of the new accounts was opened in the names of women according to
the report released in 2014 by Punjab National Bank, resulting in a greater contribution by women. This
scheme provided an opportunity for women to open bank accounts thereby increasing the percentage of the
population under financial inclusion program of the government. Successive governments in India have
stressed on providing and improving the educational opportunities for children, especially girl children. The
efforts of the government have led to an increase in the number of educated women, who are professionally
qualified and have the necessary skills to gain employment. With the opening of the economy and the
progress and investment made in the banking, financial services, insurance, software and educational sector,
job opportunities have increased for women in India. The increase in the number of employed women has
led to rise in the number of savers as well as the quantum of savings by women.
Financial Marketers are increasingly looking towards women investors for growing their sales. The range of
products is multiplying manifold due to globalization and interconnectivity of financial and commodity
markets across the world. There is general notion that, men are more comfortable in managing money in
comparison to women.

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 INDEX

SR PARTICULAR PAGE NO
NO

1 INTRODUCTION 8 - 35

1.1 WHAT IS FINANCIAL LITERACY ? 8-9

1.2 SCOPE OF FINANCIAL LITERACY 9

1.3 WHY FINANCIAL LITERACY MATTERS 9 - 10

1.4 KEY COMPONENTS OF FINANCIAL LITERACY TO KNOW BUDGETING 10 -12

1.5 INDIAN INVESTMENT SCENARIO 12 - 13

1.6 SAVINGS AND ECONOMIC GROWTH 13 - 14

1.7 INVESTMENT OBJECTIVES 14 - 15

1.8 INDIVIDUAL INVESTOR LIFE CYCLE 15 - 16

1.9 THEORETICAL VIEW OF INVESTORS IN HOUSEHOLDS 16 - 17

1.10 INVESTMENT MANTRAS IN EVERY HOUSEHOLD 17

1.11 CHALLENGES AND OPPORTUNITIES FACED BY WOMEN INVESTORS 17 - 18

1.12 TYPES OF FINANCIAL MARKETS 18 - 22

1.13 BENEFITS OF FINANCIAL LITERACY 22 - 25

1.14 ADVANTAGES AND DISADVANTAGES OF FINANCIAL LITERACY 25 - 31

1.15 HOW TO BECOME FINANCIALLY LITERATE 31

1.16 EFFECTS OF FINANCIAL ILLITERACY 31 - 33

1.17 6 WAYS TO IMPROVE YOUR FINANCIAL LITERACY 33 - 35

2 RESEARCH METHODOLOGY 36 - 38

3 LITERATURE REVIEW 39 - 47

4 DATA ANALYSIS, INTERPRETATION AND PRESENTATION 48 - 68

5 SUGGESTION AND CONCLUSIONS 69 - 70

6 ANNEXURE 71 - 73

7 BIBLIOGRAPHY 74 - 75

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 CHAPTER - 1
INTRODUCTION

Financial literacy includes understanding concepts such as budgeting, saving, investing, debt management,
and retirement planning. By promoting financial literacy in Mira-Bhayandar, we can help residents achieve
greater financial stability, make wise investment choices, and secure their financial future. This initiative can
be conducted through workshops, educational programs, and community outreach efforts to ensure that
residents have the tools and knowledge to navigate their financial lives successfully. To secure the financial
future of the community, it is imperative that residents be equipped with the necessary knowledge and skills
to make informed financial decisions.

1.1 What is Financial Literacy ?

The term "financial literacy" refers to a range of crucial financial concepts and skills. Individuals who
possess these skills are typically less susceptible to financial fraud. A solid foundation in financial literacy
can support several life goals, including paying off debt, managing debt, planning for retirement, and
managing personal
spending. Financial literacy can be acquired through reading books, listening to podcasts, subscribing to
financial content, or speaking with a financial professional.

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A solid foundation of financial literacy can help support various life goals, such as saving for education or
retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing
how to create a budget, plan for retirement, and understand financial literacy. From about years, financial
products and services have become increasingly widespread throughout society. While earlier generations of
Mira Bhayandar residents may have purchased goods primarily in cash, various credit products are popular
today, such as credit and debit cards and electronic transfers.

1.2 Scope of Financial Literacy:

Other products, like mortgages, student loans, health insurance, and self-directed investment accounts, have
also grown in importance. Financial literacy can cover short-term financial strategy as well as long- term
financial strategy, and which strategy you take will depend on how much money you must spend and how
long you must save. Popular examples of these skills include household budgeting, learning how to manage
and pay off debts, and evaluating the tradeoffs between different credit and investment products. Scope of
Financial Literacy Financial literacy encompasses many skills, but common examples include budgeting,
learning to manage and repay debt, and evaluating trade-offs between different credit and investment
products. Can be mentioned. These skills often require at least a working knowledge of important financial
concepts such as compound interest and the time value of money. Other products such as mortgages, student
loans, health insurance, and self-directed investment accounts are also gaining traction. This makes it even
more important for individuals to understand how to deal with it responsibly. The strategy you choose
depends on several factors, including Age, duration, and risk tolerance. Financial literacy includes knowing
how the investment decisions you make today will affect your future tax obligations. This is not about
adding new things to finance, such as e-wallets, digital money, buy now/pay later, P2P lending, and other
convenient and cheap new financial products, but it is about introducing them to potential consumers who
need to be educated about. Make appropriate decisions in their own interests.

1.3 Why Financial Literacy Matters:

Financial literacy is essential for managing these factors, which range from daily expenses to long-term
budget forecasting. It is critical to plan and save enough to provide a sufficient income in retirement while
avoiding excessive debt that could lead to foreclosure, default, or bankruptcy. Without an understanding of
basic financial concepts, people are not adequately prepared to make decisions related to fiscal management.
Financially literate people can make informed financial decisions regarding saving, investing, borrowing,
etc. Financial literacy is especially important now that a wide segment of the population has easy access to
increasingly complex financial products. For example, as governments in many countries push to increase
access to financial services, the number of people with bank accounts and access to credit products is rapidly

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increasing. Additionally, the changing landscape of retirement is shifting decision-making responsibility to
participants who previously relied on their employers and governments for financial security in retirement.

1.4 Key Components of Financial Literacy to Know Budgeting

Saving.
Managing debt Investing.
Managing credit.

1) Budgeting: Creating a budget is an initiative-taking way to manage your money. A budget makes sure
you have more money coming in than going out by keeping track of your earnings and expenses. This

9
enables you to budget for short- and long-term goals, pay for the items that are important to you, and meet
living expenses.

2) Saving: Savings: Setting aside extra cash or funds for life's costs, emergency savings, or future
purchases. This extra cash can be locked away at home or invested in investment programs, credit unions,
banks, and other location Making Investments . An investment: What is it? An investment is a sum of
money paid with the intention of making a profit on assets owned by other parties. Bonds, common stock,
and preferred stock are a few examples.
A return on investment can be obtained in two ways: either by the asset's value increasing over time or
through recurring payments from the investment. The idea can also refer to buying fixed assets for internal
usage with the intention of making a profit. This kind of financial commitment is significantly

3) Managing debt: The act of managing debts is, to put it simply, debt management. It can also refer to a
credit counseling service that combines all your unsecured debt into a single monthly payment that the credit
counseling business sends straight to your creditors. One of the various alternatives available to individuals
for lowering their credit card debt is debt management. Customers may attempt to manage their debts
independently. Consumers should keep track of their monthly outflows for everyday and living
expenditures, as well as the amount they contribute toward paying off their various loans, according to
financial experts. By doing this, they might be able to find methods to reduce the price of luxury and other
purchase.

4) Investing:
(I) Understanding Investment Options : Financial literacy helps individuals understand the various
investments Understanding Investment Options Financial literacy helps individuals understand the various
investment options available to them. From stocks and bonds to mutual funds and real estate, a solid
foundation of financial knowledge allows individuals to evaluate and select investment vehicles that meet
their goals and risk tolerance.

5) Assessing Risk and Reward: Investment decisions inherently involve risk and reward. Financial literacy
provides individuals with the tools to assess the potential risks and estimate the potential returns of various
investment opportunities. It helps you weigh the risks and benefits and make informed decisions based on
your personal situation. Set realistic goals: Financial literacy encourages individuals to set realistic
investment goals based on their financial situation, time horizon, and ambitions. This will help you
understand the power of compound interest, long-term planning, and the importance of regular contributions
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to achieving your desired financial milestones.

6) Analyzing Market Trends: Financial literacy enables individuals to effectively interpret market trends,
economic indicators, and financial news. Understanding the impact of market events can help you make
more informed investment decisions, identify potential opportunities, and avoid impulsive actions due to
short-term market fluctuations. Personal Financial Management: Financial literacy includes a more
comprehensive understanding of personal fiscal management, including budgeting, savings, and debt
management. These skills are an essential foundation for building a strong financial foundation and
supporting informed investment decisions.

7) Protection from Fraud and Fraud: Financial literacy helps individuals identify and protect themselves
from investment frauds and fraudulent schemes. By understanding common warning signs, conducting due
diligence, and seeking advice from trusted professionals, individuals can protect their hard-earned money
and avoid becoming victims of fraudulent activity.

8) Managing credit: How to Judiciously Manage Credit The most important guideline for using credit
responsibly is to always make your payments on time! Missed or overdue payments significantly affect your
ability to get fresh credit. However, becoming a great borrower entails more than just paying your bills on
time each month. When a person applies for a credit product, lenders consider all aspects of their financial
situation, therefore you should ensure that your credit portfolio is complete and does not contain any gaps.

9) Benefit of Financial Literacy: Overall, the advantage of financial literacy is that it enables people to
make more informed decisions. To be more precise, there are several reasons why financial literacy is
crucial: It can help people avoid making disastrous financial mistakes: loans with floating rates may have
variable interest rates, and traditional IRA contributions cannot be withdrawn until retirement. Despite
appearing innocent at first, these decisions can have long-term consequences that cost people money or
affect their plans.

1.5 Indian Investment Scenario

Over the last 25 years the world of investments in India has undergone a sea change. The change is in terms
of the variety of products, alteration in the market participants, rules and regulations, grievance redressal
mechanisms and the functioning of the markets. This change was due to the growth of the Indian economy
and the opening of the economy to foreign investors. Foreign investments in the Indian securities markets

11
were restricted till late 80s.
There was restriction on foreign direct investment and portfolio investments by foreigners. Indians were not
free to invest in markets abroad. Investors had extremely limited investment options and products to choose
from. Investment opportunities were limited to bank deposits, postal department savings schemes, national
savings certificates (NSC) of different maturity periods, monthly incomes schemes(MIS), traditional life
insurance products offered by the life insurance corporation, unit trust of India (UTI) operated unit -64
mutual fund scheme employee provident fund, public provident fund, equities, and debentures. Due to the
large reach of the postal department, investors were investing in most of the small savings’ schemes offered
through the postal department and wherever stock exchanges were there. Investors had the opportunity to
invest in equity shares of listed companies. For urban investors, opportunities were available for investing in
equity, bonds, debentures, and other instruments available in the capital market. For rural populations there
were chit funds in addition to postal schemes. There is possibility that, due to lack of investment
opportunities, rural India focused on buying gold, other precious metals, and stones along with agricultural
land and other real estate assets. At one point in time people invested in gold bonds. Due to the presence of
Life Insurance Corporations of India in smaller towns and district headquarters, life insurance had popularity
with some investors. Till mid-90s, Life Insurance Corporation of India was synonymous with life Insurance.
Banks had limited presence, and options available to investors were recurring deposits and fixed deposits.
Unlike the present scenario, banks were not marketing any third-party products.

1.6 Savings And Economic Growth

The role of savings and investments and its impact on macro-economic factors have raised Controversies
amongst economists. While few economists argued that excess savings could lead to depression, other
economists were against this argument. Adam Smith refuted the opinion and argued that savings could lead
to economic growth. In the wealth of nations, Smith mentioned that “As the capital of an individual can be
increased only by what he saves from his annual revenue or annual gains, so the capital of society, which is
the same with that of all individuals who compose it, can be increased in the same manner what is annual
saved is as regularly consumed as what is annually spent, and nearly at the same time too; but it is consumed
by a different set of people”
According to classical theory of savings and investment, the key factor that would bring savings and
investment into equilibrium at full employment is the interest rate. In other words, an increase in savings
would lead to a decrease in the interest rates and this would cause an increase in investment and thus
stimulate growth.
Keynes challenged the classical theory and argued in his work Keynes General Theory that, “The traditional

12
analysis has been aware that savings depend on income, but it has overlooked the fact that income depends
on investment, in such fashion that, when investment changes, income must necessarily change in just that
degree which is necessary to make change savings equal to the change in investment”. He also stated that
‘”increased investment will always be accompanied by increased saving, but it can never be preceded by it”
(1939, p 572). Further, Keynes stated that, “The investment market can be congested on account of a
shortage of cash. It can never be congested on account of saving” (1973, p 222). In contrast, the supply-
determined growth theory suggests that savings determine investments and hence, any economic policy
should be aimed at increasing the private savings which would result in lower interest rates and which, in
turn, would increase investments.

1.7 Investment Objectives

The investor needs to define his objectives so that he moves in that direction. The main investment
objectives are
 Increasing the rate of return and
 Reducing the risk.
 Availing tax shield

Increasing the rate of return

Return is the ultimate objective in any investment program. Many investments have two components of
return, namely,
 Capital Gain or Loss
 Some form of income – interest, dividend, etc.
The returns shall be measured in any of the following form,

 Holding Period Return

 Arithmetic Mean Return
 Geometric Mean Return
 Return on Investment
 Expected Return

The investor shall always intend to maximize the returns on the investment.

Reducing the risk

Risk assessment is one of the most important aspects of modern fiscal management. Before embarking on
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any investment, a person should understand both the expected returns and the riskiness of those returns.
Following are the measures of total risk,
□ Standard deviation
□ Variance
□ Semi-variance
□ Geometric Mean

Risk is referred to as “chance of loss” and the risk has numerous subsets. Total risk refers to overall
variability of the returns of the financial asset. The total risk has two principal components, namely,

 Un-diversifiable risk and

 Diversifiable risk
Un-diversifiable risk is the risk that must be borne by virtue of being in the market. The risk arises from
systematic factors that affect all securities of a particular type. Diversifiable risk can be removed by proper
portfolio diversification. The risk arises due to company-specific events or factors.
The investor shall aim to reduce the risk to the possible extent.

Availing tax Shield

The investor tries to take advantage of certain privileges from the Income Tax Act of 1961 like Section 80C,
80CCC, 80CCD, 80D etc. so that he engages in tax planning. In this process, he chooses the investment
channels that provide him cushion of paying lesser taxes. Investments such as Insurance, ELSS, ULIPs, etc.
provide tax shield.

1.8 Individual Investor Life Cycle

Financial plans and investment needs are as different as everyone else’s. Investment needs change over a
person’s life cycle. The investment plan should consider the investor’s age, financial status, future, risk
aversion characteristics, needs etc.
Before embarking on an investment program, the investor needs to make sure that his three important needs
are satisfied, viz,
 Adequate income to cover living expenses and
 Safety net in case the unexpected could occur
 Cash Reserve

Life insurance must be a part of any financial plan. The life insurance serves many purposes, like,

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  To meet the long term or retirement plan
 To protect the loved ones against financial hardship, in case of death before policy maturity
 To provide protection against uncertainties like payment of medical bills, disability Etc.

Cash Reserve is quite important to help meet contingencies and emergencies like job layoffs, unforeseen
expenses, emergence of worthwhile investment opportunities, safety cushion etc. The proportion of cash
reserves should also change over the life cycle of the investor. Assuming that the basic insurance and cash
reserve needs are met, individuals can start a serious investment program with their savings. Due to the
changes in net worth and risk tolerance levels, the individual investor’s investment strategies will change
over their lifetime.

Accumulation phase
□ Persons in their early and middle years of working
□ These investors are focused on immediate needs (ex: the purchase of a new home) as well as longer
term goals (retirement, etc.).
□ Investors in the accumulation phase usually have a low net worth, and often carry excessive amounts
of debt (mortgage, loans from college, etc.)
□ Characterized by a willingness to make high-risk investments in the hope of making significant gains
over time

Consolidation phase
□ Individuals in the latter half of their careers
□ Have paid off major debts like college loans
□ Investors in the consolidation phase still have a long investment horizon and willingness to accept risk
in exchange for longer term gains.

Spending phase
□ The spending phase usually begins with retirement
□ Day-to-day expenses are covered by accumulated assets, employer pension plans, and social security.
□ There is a reduced willingness to accept risk, because the prime earning years have passed, and there is
a slimmer margin for loss.
□ However, younger retirees can expect to live at least 20 more years. Therefore, they still must think of
long-term gains and income growth.

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1.9 Theoretical View of Investors in Households

Adults are born equal, and both play a key role in the creation and development of family and society in
general. In the traditional family the husband earns for the family and wife maintains it. Her role was mainly
confined to domestic works. She creates life, nurtures, guards, and strengthens it. She plays the role of wife,
mother, sister, sister-in-law, daughter, daughter-in-law, granddaughter etc. She is the transmitter of tradition
and the instrument by which the family culture is preserved.

Women’s role which was confined to domestic areas has now switched over to the other areas where she is
competing with her male counterpart. This is due to the education she is getting, the women centered
policies, programs of the government and the job opportunities available to her in the wake of
modernization, urbanization, industrialization, liberalization, globalization etc.
The opportunities available to women paved the way for economic independence and their involvement in
political and social sphere has increased. There were times when the prime role of women was confined to
her household duties. But as times changed, the world realized that her potential was meant to be explored in
various fields. Today’s women are a hard taskmaster, managing between a homely wife, a shrewd boss, a
genuine companion, with such ease and grace that is remarkably appreciable.

1.10 Investment Mantras in Every Household

Women are not as active as men when it comes to investing money. They keep themselves away from taking
investment decisions, they are well known for spending money or keeping it idle, rather than investing it to
earn more. Even non-working women are mostly dependent on their spouses for meeting their day-to-day
expenses. Though to some extend it is true that women are dependent on their spouses for finance, they
should also think about their future.
Women should start thinking and understanding the importance of money, savings, and its investment aspect
to avoid critical situations at any stage of their lives. They need to develop skills to plan for their financial
needs. Women tend to keep cash idle rather than investing it. They tend to think that this “idle cash” can be
easily used to meet expenses beauty parlors, jewelry etc.
However, as an exception few women invest in less risk avenues such as bank deposits and post office
schemes. They avoid risky options such as equities, as they think that it is difficult to understand equity
market trends, patterns and as they are volatile in nature.

1.11 Challenges and Opportunities Faced by Women Investors

The challenges and opportunities faced by women today honors some women of substance, puts forward
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some social issues and hopes to offer realistic means towards creation of a gender unbiased society. Women
today have scaled great heights. They are impervious to the traditional beliefs of our society in a non-defiant
but affirming way. They know what they want. They are not apprehensive in discovering their capacity and
carving their own niche in these contemporary yet conventional times. They know striding a fighting balance
between personal life and career is a challenge and they learnt to conquer it with the grace of savings.
Swearing by the principles of equal opportunities as propagated by the constitution itself, the role and
contribution of women in society at large can never be completely underlined, however it is articulated. It is
imperative today that each woman investors should understand the role what she plays in society. However,
there is a need to address certain challenges faced by women today.

1.12 Types of Financial Markets

Based on the types of instruments and the tenor of the instrument, financial Markets are divided into two
broad categories:
1.Money market
2.Capital market

1. Money Market
This market deals with short-term instruments. Short-term instruments have a maturity period of less than
one year. Popular instruments traded are treasury bills issued by Reserve Bank of India (RBI), commercial
papers issued by private sector, and certificate of deposit issued by banks. This market is a wholesale market
where the major participants are banks, insurance companies, mutual funds, and other institutions. Retail
investors have limited presence. Small investors can take part in this market through primary dealers or
mutual fund houses that offer schemes investing in instruments traded on the money market. Reserve Bank
of India is the regulator for this market.

2. Capital Market
In this market financial instruments with life spans of more than a year are traded. The instruments available
in this market are equity shares, debentures bonds, mutual funds including exchange traded funds
(ETF‟s).Capital market is regulated in India by Securities Exchange Board of India (SEBI). This market is
further divided into primary and secondary market.

2.1 Primary Market

In this market companies raise capital by offering securities to the public. The instruments offered are equity
shares, bonds, debentures, or any other security approved by the capital market regulator. The offer made to

17
the public is also called the Initial Public Offer (IPO). If any firm approaches the market for further issue of
capital, then such issues are called as further public offer or Follow on Public Offer (FPO). There is a
reservation of 35 % for retail investors in all IPOs. Despite reservation the subscription by retail investors is
not very encouraging. Mutual funds also approach investors through new fund offer (NFO) and private and
government companies take the premarket route for raising capital by issuing bonds and debentures.

Secondary Market
In this market, all the securities issued in the primary market are dealt with. This market offers liquidity for
the securities offered in the primary market. The transaction in securities in the secondary market are done
through the stock exchanges and over the counter (OTC) market. A major investment opportunity for retail
investors exists in this market. Securities to be traded on the stock exchanges must follow all the rules and
regulations of the stock exchanges and SEBI. BSE and NSE are the two major exchanges of India. More
than 5500 companies’ securities are listed on BSE, but active trade takes place in about 3000 company
shares. Many flies by night companies were delisted from exchanges for not conforming to the rules and
regulations of exchanges and SEBI.
With the opening of the mutual fund sector for entities other than Unit Trust of India (UTI) in mid 80s, there
was a rapid growth in the mutual fund schemes offered by Indian banks and foreign mutual fund houses.
This brought in product innovation due to the expertise of the foreign fund houses as well as due to the
competition. Investors were able to get a wider range of mutual fund schemes meeting their requirements.
As of today, the market size of mutual funds in India is close to Rs 10 lakh crores, and many investors enter
the securities market through mutual fund investing.
Till the creation of SEBI, retail investors suffered in the hands of brokers and other financial intermediaries
due to lack of transparency in the execution of the trade and pricing of securities. Investors in the stock
market were at the mercy of stockbrokers. In the early 90s many investors lost money and faith in the capital
market due to various frauds led by Harshad Mehta’s stock market fraud, which exposed the weakness in
regulation of the stock market. Investors lost money due to lack of transparency in brokers, manipulative
promoters and unreliable companies that entered the capital market, as well as due to lack of regulatory
control. Stock exchanges were controlled by brokers, which resulted in further sufferings for the retail
investors, as exchange authorities were not bothered about the resolution of investor complaints and
grievances. Investors were plagued with defective documents including fake share certificates, damaged
transfer deeds, signature mismatching transfer deeds, delay in transferring of shares, non-receipt of
dividends and many more issues which weakened the confidence of the investors.
A major change in the Indian market took place with the setting up of Securities Exchange Board of India
(SEBI), the regulator for the securities market. Major objective of SEBI is investor protection and investor
grievances resolution

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Major reforms in the market started with the formation of SEBI, which was given sufficient powers to
prosecute and penalize errant brokers, stock exchanges, companies, and manipulators. The opening of the
National Stock Exchange (NSE) in a demutualized form, where the owners of the exchange were different
from the members having trading rights brought in the transparency in the trades and prices. NSE embraced
technology from inception and brokers could set up office in any part of the country due to the screen-based
trading on NSE. Foreign investors were allowed to participate in the Indian capital market in mid 90s which
led to further growth in the Indian capital market. Further impetus to the market was provided by the passing
of the Depositaries Act 1996, which paved the way for holding securities in the electronic form by investors.
This reduced the investors’ complaints regarding the delay in the transfer of shares, removal of duplicate and
fake shares from the market and all other problems faced when the securities are held in physical form.
Participation by foreign investors and holding of securities in electronic form brought in the demand for
derivatives market which was opened for Indian investors in the year 2000 that again led to the surge in the
capital market investment. With the growth in the capital market the mutual fund industry started to grow
and is now offering a very wide range of products meeting the needs of several types of investors. As of
today, more than 40 asset management companies offer more than 1400 types of mutual fund schemes
including systematic investment plans index funds, ETF’s and manage assets close to Rs.10 lakh cores. In
the year 2008 NSE and BSE started offering foreign currency trades. With the rapid penetration of the
internet and the mobile phone services along with the online money transfer facility, trading in securities is
different from what it used to be a decade back.

Table 1.4 Proportion of household investment in Equity (in %)

Year Investment in
equity
2014 3.0
2015 4.5
2016 8.0
2017 11.0
2018 9.0
2019 6.0
2020 4.5
2021 4.0

Household savings since 2014 are displayed in the above table. It is observed that equity investment peaked
in 2017 and has been consistently falling since then indicating the lowering of interest in equities by

19
investors.
The insurance sector also grew along with the capital market. Life insurance and general insurance were
controlled by government owned companies till the mid-90s. Life Insurance Corporation (LIC) was
synonymous with Life Insurance in India. The Insurance landscapes has changed when the government
opened the insurance sector to private players. A new regulator for this sector was formed to regulate the
Insurance market. Insurance regulatory development authority (IRDA) is the regulator of the insurance
sector in India.
Due to the intense competition the service level increased, and many new products were launched. Increase
in product range allowed people to buy products meeting their requirements. One of the revolutionary
products launched in this sector was the Unit Linked Insurance Plans (ULIP) that allowed insured people to
participate in the growth of the capital market. Under this scheme part of the premium paid goes towards the
term insurance cover and the balance amount is invested through fund houses into various schemes,
including liquid funds, bond funds and equity funds. There was rampant mis-selling of insurance products
during the initial days of ULIP product availability, due to higher commissions offered to the insurance
agents and other intermediaries. IRDA stepped in and put restriction on the commission level. This step
from IRDA has reduced mis-selling of ULIP schemes.
Marketing of insurance schemes has increased the penetration level, but still India is an under insured
country.
Withdrawal of pension by government led to an increase in demand for annuity funds and insurance linked
annuity products. We have reached a stage where IRDA is taking necessary steps to offer holding of
Insurance policies in electronic form, which is likely to help an investor consolidate all his financial
holdings. Despite a wide range of products, gold is a preferred investment for Indian investors for historical
reasons. The primary demand for gold is in the form of jewelry followed by gold coins and bars of different
weights. There is change in the way gold investment opportunity is available today. Investors have the
option to invest in gold through commodity exchanges. Commodity exchanges allow investors to hold gold
in electronic form. There is a choice for investors to invest in gold through mutual fund houses that offer
gold linked schemes as well as gold linked exchange traded funds.
Boom in real estate and its attraction for Indians, serve dual purpose of investment as well as consumption.
The increase in the income level and the increase in nuclear families have aided the growth of real estate
investments. Many investors buy second and third homes from an investment angle and look for capital
appreciation as well for regular income by way of rental. Real estate investment is a big-ticket investment.
Real estate as an investment product is out of the reach of small investors, due to the lack of availability of
suitable products. As of now there is no product available in the market for small investors to participate in
the real estate sector, for small investors. The government is working on allowing real estate companies to
offer retails participation by way of Real Estate Investment Trusts (REITS).
Despite regulators and the use of technology, there are still some grey areas. Chit fund industry, though for
20
many years was highly unregulated, is still popular with small investors in certain pockets of the country.
Chit funds function as an investment avenue for many investors, as participation in chit funds has dual
option of investment as well as a source of borrowing money. In the semi urban and rural areas, chit fund is
still considered as a primary source of savings.
In the current scenario, Indian financial markets are robust and well regulated by the respective regulators.
There is a need for banks to come out with more products for their customers. Investors have limited choice
of fixed deposits or recurring deposits. Banks are allowed to sell mutual funds, pension schemes and
insurance products which has increased products availability across India.
There is an urgent need to create investor awareness among retail investors. According to some studies
conducted by mutual fund houses, lack of knowledge and awareness about various financial products is one
of the factors for the slow growth of the financial sector. Lot of effort is put by regulators, stock exchanges,
insurance companies and mutual fund houses to spread the financial literacy level in last five years.
Financial literacy has improved during the last five years, due to an increase in internet usage and portals
offering financial education workshops.
1.13 Benefits of Financial Literacy

Being financially literate is a skill that brings forth an assortment of benefits that can improve the standard
of living for individuals through an increase in financial stability.

Listed below are the assortment of benefits of being financially literate:

 Ability to make better financial decisions

 Effective management of money and debt
 Greater equipped to reach financial goals
 Reduction of expenses through better regulation
 Less financial stress and anxiety
 Increase in ethical decision-making when selecting insurance, loans, investments, and using a credit
card
 Effective creation of a structured budget
 Making steps to becoming financially literate is an important component of life that can ensure
financial solidity, reduce anxiety, and stimulate the achievement of financial goals.

Where to Gain Financial Literacy

Beyond gaining knowledge through word-of-mouth, there is an assortment of tools and online modules that
can increase an individual’s financial literacy.

Listed below are some tools an individual can use to increase financial literacy:

 EconEdLink: Online financial lessons for K-12 students

 Money Smart: Free financial tools such as podcasts, lesson plans, and games to increase financial
literacy
 MoneyWi$e: In a partnership between Capital One and Consumer Action, Moneywi$e provides free
multilingual financial education
 InCharge: Dedicated to empowering consumers through personal financial management, In Charge
provides online eBooks for educational purposes
21
  Any of the options listed above provides beneficial financial knowledge that should be pursued if an
individual wishes to improve their financial literacy.

Financial literacy refers to the knowledge and understanding of various financial concepts, tools, and
systems that individuals need to make informed and effective decisions about their financial resources. The
benefits of financial literacy are numerous and can have a positive impact on various aspects of an
individual's life. Here are some key benefits:
1. Better Budgeting: Financial literacy equips individuals with the skills to create and manage a
budget effectively. This allows them to allocate their income wisely, save for future goals, and avoid
unnecessary debt.
2. Smart Spending: Understanding financial concepts helps individuals make informed choices about
spending. They can differentiate between needs and wants, prioritize expenses, and avoid impulsive
or unnecessary purchases.
3. Debt Management: Financially literate individuals are better equipped to manage and reduce debt.
They can make informed decisions about borrowing, understand interest rates, and develop strategies
for paying off debts efficiently.
4. Savings and Investments: Financial literacy encourages individuals to save and invest for the
future. It provides the knowledge needed to choose appropriate savings and investment vehicles,
understand risk and return, and work towards long-term financial goals such as retirement.
5. Emergency Planning: With financial literacy, individuals are better prepared for unexpected
expenses or emergencies. They can establish and maintain emergency funds to cover unforeseen
circumstances without resorting to high-interest debt.
6. Improved Credit Scores: Understanding credit and how it works enables individuals to maintain a
good credit score. This is crucial for accessing favorable interest rates on loans and financial
products.
7. Empowerment and Confidence: Financial literacy empowers individuals to take control of their
financial future. With knowledge comes confidence, and this confidence can lead to more proactive
financial decision-making.
8. Goal Achievement: Financial literacy helps individuals set and achieve financial goals. Whether it's
buying a home, starting a business, or funding education, a solid understanding of financial
principles is essential for achieving these objectives.
9. Entrepreneurship and Business Skills: For those interested in entrepreneurship, financial literacy
is crucial. It helps in understanding financial statements, managing cash flow, and making sound
financial decisions for the success of a business.
10. Retirement Planning: Financially literate individuals are more likely to plan for retirement
effectively. They can navigate retirement savings options, understand investment strategies, and
ensure a comfortable retirement.

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What are the Major Benefits for Students to Become Financially Literate?

Financial literacy refers to the ability to understand and manage personal finances effectively. For students,
financial literacy is an important skill that can have a lasting impact on their future financial stability and
independence. In this article, we will explore the major benefits that students can gain from becoming
financially literate.
It offers numerous benefits, including improved money management skills, a better understanding of student
loan debt, preparation for financial stability and independence, increased confidence in financial decision
making, and career advancement opportunities. By incorporating financial literacy into their daily routine,
students can take control of their finances and achieve their financial goals.

Now here are the benefits of financial literacy to students.

Improved Money Management Skills

One of the major benefits of financial literacy is improved money management skills. Students who become
financially literate learn how to create a budget, reduce debt, and save for the future. This improved
understanding of personal finances helps them make informed decisions about their money and achieve
financial stability. Financial literacy can also help students avoid financial pitfalls, such as overspending and
high credit card debt.

Better Understanding of Student Loan Debt

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Another benefit of financial literacy is a better understanding of student loan debt and this understanding can
also be increased by various financial literacy courses which are very popular nowadays. With the increasing
cost of education, student loan debt is a growing concern for many students. Financial literacy can help
students understand the long-term implications of their student loan debt and provide a foundation for
making informed decisions about student loan repayment.

Preparation for Financial Stability and Independence

Financial literacy can also help prepare students for financial stability and independence. By mastering
financial literacy skills while they are still students, students can take control of their finances and achieve
their financial goals. They can also learn about the importance of savings, investments, and retirement
planning, which can help them lead a financially stable life after graduation.

Increased Confidence in Financial Decision Making

Financial literacy can also increase students’ confidence in making financial decisions. By gaining a deeper
understanding of personal finance, students can feel more confident in their ability to make informed
decisions about their money. This confidence is also increased by using various platforms like Upsurge can
help them achieve their financial goals and reduce financial stress.

Career Advancement Opportunities

Financial literacy can also provide students with career advancement opportunities. Many careers, such as
finance, accounting, and investment, require a strong understanding of personal finance. By becoming
financially literate, students can improve their chances of success in these fields and take control of their
financial futures.
You can also grab these benefits by visiting many platforms which work on financial literacy of students and
according to me Upsurge is the best platform for you. Upsurge is an innovative platform that provides
comprehensive financial literacy education to students. The platform offers a range of online courses and
resources designed specifically for students, covering a wide range of topics such as budgeting, saving,
investing, and managing debt.

1.14 Advantages and Disadvantages of Financial Literacy

Financial literacy is a valuable life skill. Understanding and using basic financial concepts can help you
make better decisions about your money. However, are there any downsides to being financially literate? In
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this article, we’ll explore financial literacy’s advantages and disadvantages

Financial Literacy – What Is It?

Financial literacy is the ability to understand and use financial concepts. It includes understanding your
financial status, interest, and taxes and managing money to reach your financial goals. Financial literacy also
involves understanding credit, investing, and risk management.
According to a study by the Milken Institute, 57% of Americans are financially literate. But unfortunately,
almost half of the population lacks the knowledge to make sound financial decisions.
The good news is that anyone can learn financial literacy at any age. There are many resources available to
help you improve your financial literacy skills. Here are a few suggestions:
 Books
 Courses
 YouTube

The Advantages of Financial Literacy

Many advantages come with being financially literate. For one, you’re able to manage your money more
effectively.
People who have high levels of financial literacy tend to:
 Save more
 Pay less in fees
 Invest more wisely
 Feel more confident about their finances

25
Being financially literate also gives you a sense of control over your finances. You know where your money
is going and what you need to do to achieve financial well-being. That can lead to a more stable financial
future and peace of mind.

Finally, financial literacy can help you build wealth over time. Understanding how money works can make
better financial choices with long-term benefits. This can help build financial security and stability for
yourself and your family.

key advantages:
1. Informed Decision-Making: Financially literate individuals can make informed decisions about
their money. Whether it's budgeting, investing, or borrowing, they understand the potential
consequences and can choose options that align with their financial goals.

2. Effective Budgeting: Financial literacy enables people to create and stick to budgets. This skill is
crucial for managing income, controlling spending, and directing funds towards savings.

3. Debt Management: Understanding financial concepts helps individuals manage and reduce debt
effectively. Financially literate individuals can navigate credit options, make wise borrowing
decisions, and avoid falling into a debt spiral.

4. Improved Credit Scores: Financial literacy empowers individuals to understand how credit works
and how to maintain a good credit score. This is essential for obtaining favorable terms on loans,
mortgages, and credit cards
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 5. Savings and Investments: Financially literate individuals are more likely to save for the future and
make informed investment choices. This can lead to the accumulation of wealth over time and
provide financial security.

6. Risk Management: Financial literacy involves an understanding of risk and return. Individuals with
financial knowledge are better equipped to assess and manage risks in their financial decisions,
whether in investments or other financial ventures.

7. Goal Achievement: Financial literacy helps individuals set realistic and achievable financial goals.
This could include buying a home, funding education, starting a business, or saving for retirement.

8. Emergency Preparedness: Financially literate individuals are better prepared for unexpected
financial challenges. They are more likely to have emergency funds in place, reducing the impact of
unforeseen expenses on their overall financial stability.
9. Empowerment and Confidence: Financial literacy empowers individuals to take control of their
financial lives. Confidence in managing money leads to a sense of empowerment, reducing stress and
anxiety related to financial matters.

10. Career Advancement: Financial literacy can contribute to career success. Understanding workplace
benefits, negotiating salaries, and making wise employee benefits choices are all part of financial
literacy that can impact one's overall financial picture.

11. Family Financial Stability: Families benefit from financial literacy as it facilitates better financial
planning and communication. Parents who are financially literate can teach their children valuable
money management skills, contributing to the family's overall stability.

The Disadvantages of Financial Literacy

Materialism
So, what are the downsides of financial literacy? Some may argue that focusing so heavily on personal
finance could make some people more materialistic and obsessed with money. While this is possible.
Focusing on how to grow your wealth could lead to some materialism. Part of financial literacy is knowing:
 When you have enough
 Recognizing that growing your wealth requires consuming less, not more.
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Also, a considerable part of financial literacy focuses on being grateful for what you have and recognizing
that donating, charity, and volunteering is a part of personal finance.

Overconfidence
My father once told me that a little bit of information could be dangerous. Another concern some may have
is that financial literacy is that some who believe themselves to be financially literate could overestimate
their ability to manage money. This overconfidence could lead them to make poor decisions, such as taking
on too much debt or investing in high-risk ventures.
While a valid concern, part of being financially literate is having the skills and knowledge to know when to
do or not to do something with your money. The key is to understand your risks and seek out information
and knowledge to make the best decision with the information you have. Is it possible to become
overconfident? Yes, of course, but if you set up systems to make the most of your money and make the right
decisions when it counts, overconfidence shouldn’t be too much of a concern.

A False Sense of Security

This goes hand in hand with overconfidence. Being financially literate could make you feel like you can
withstand anything. And if you have your numbers right, save appropriately, and invest wisely, you likely
can handle most things. But if the last few years have taught us, any pandemics and great recessions can
come out of nowhere and make a mess of our finances.
But if you are investing for the long term, have a well-funded emergency fund, and live within your means,
you can weather even the most unexpected financial storms.

While financial literacy offers numerous advantages, there can be some potential disadvantages or
challenges associated with it. It's essential to recognize these aspects to address them effectively. Here are
some potential disadvantages of financial literacy:
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1. Overconfidence: One potential disadvantage is that individuals who acquire a basic level of
financial knowledge may become overconfident in their abilities. This overconfidence might lead to
riskier financial behavior or decisions without fully understanding the complexity of certain financial
instruments.

2. Inequality in Access to Education: Financial literacy is not evenly distributed, and some
individuals may not have equal access to financial education. This can contribute to existing
socioeconomic inequalities, as those with limited access may face challenges in making informed
financial decisions.

3. Complexity of Financial Products: The financial industry can be complex, and some financial
products are inherently difficult to understand. Even financially literate individuals may struggle to
grasp the intricacies of certain investments, leading to potential misjudgments or mistakes.

4. Changing Economic Landscape: Economic conditions and financial markets are dynamic and
subject to change. Financial literacy education may not always keep pace with these changes, leaving
individuals with outdated information or strategies.

5. Emotional Biases: Financial literacy may not fully address emotional biases that can impact
decision-making. Fear, greed, and other emotions can influence financial choices, even among
individuals with a good understanding of financial principles.

6. Lack of Application: Acquiring financial knowledge does not guarantee its application. Some
individuals may possess financial literacy skills but struggle to implement them due to various
factors such as behavioral challenges, lack of discipline, or external pressures.

7. Potential for Fraud: Financially literate individuals may still fall victim to scams or fraudulent
schemes. Fraudsters often exploit individuals' trust in their financial knowledge, leading to financial
losses.

8. Inadequate Financial Regulation: In some cases, even financially literate individuals may face
challenges due to inadequate financial regulation. Lack of oversight and transparency in financial
systems can expose individuals to risks beyond their control.

9. Cultural and Societal Factors: Cultural and societal factors can influence financial behaviors.
29
 Financial literacy programs may not always account for these factors, making it challenging to
address the diverse financial needs of various populations.

10. Limited Impact without Behavior Change: Acquiring financial knowledge does not automatically
translate into positive financial behavior. Without a corresponding change in behavior, the benefits
of financial literacy may be limited.

11. Educational Gaps: Financial literacy programs may vary in quality, and not all programs effectively
address the needs of different demographics. This can result in gaps in knowledge and skills among
certain groups.

1.15 How to Become Financially Literate

Many thinks being financially literate means knowing how to save money and investing it in the right
places. However, there is so much more to financial literacy than that. To be financially literate, you need to
understand all aspects of your finances, including your income, debts, expenses, and assets.
You can do a few key things to become more financially literate:
1. Start tracking your spending. This will help you see where your money is going and where you can
cut back.
2. Create a budget and stick to it. Tracking your spending will help ensure you are not spending more
than you can afford.
3. Plan for your future.

Set goals and figure out how you will reach them. Use the information you gained from paying attention to
your spending, debts, income, and aspirations.

1.16 Effects of Financial Illiteracy

Financial illiteracy affects all ages and all socioeconomic levels and the lack of it may lead to poor financial
choices that can have negative consequences on the all-round well-being of an individual.
It can cause many people to become victims of predatory lending, subprime mortgages, or fraud and high
interest rates, resulting in bad credit or bankruptcy.
The lack of financial literacy can lead to large amounts of debt and poor financial decisions. For example,
the advantages or disadvantages of fixed and variable interest rates are concepts that are easier to understand
if you possess financial literacy skills.

30
Research studies on financial literacy have shown that most financial consumers lack the ability to
understand and effectively manage basic financial concepts or products. A lack of financial literacy
education is responsible for poor money management skills and below-par financial planning for business
and retirement.
Here are some of the effects financial illiteracy can have:
 Prohibits individuals from becoming productive members of the economy and society in the same
way that the inability to read or write disadvantages generations
 Decreases the chances of assessing financial risks or opportunities. This makes financial choices
riskier and potentially damaging
 Handicaps anyone seeking to be financially secure. For example, financial illiteracy can increase the
chances of losses due to fraud or scams
 Magnifies the physical and mental issues associated with being in debt and lessens the chances of
finding an appropriate debt solution

Financial illiteracy can have profound and wide-ranging effects on individuals, families, and societies. Here
are some of the notable effects:

1. Accumulation of Debt: Financially illiterate individuals may be more prone to accumulating high
levels of debt. Lack of understanding about interest rates, credit terms, and proper debt management
can lead to excessive borrowing and financial strain.

2. Poor Financial Decision-Making: Financial illiteracy often results in poor financial decision-
making. Individuals may make uninformed choices about investments, savings, and spending,
leading to suboptimal outcomes and missed opportunities.

3. Limited Wealth Accumulation: Financially illiterate individuals may struggle to build wealth over
time. They may miss out on the benefits of savings, investments, and long-term financial planning,
hindering their ability to achieve financial goals.

4. Increased Financial Stress: Lack of financial knowledge can contribute to heightened financial
stress. Individuals may feel overwhelmed by money-related issues, impacting their mental and
physical well-being.

5. Inadequate Retirement Planning: Financial illiteracy often translates to inadequate retirement

planning. Individuals may not save enough for retirement, misunderstand pension options, or make

31
 poor investment choices, jeopardizing their financial security in later years.

6. Limited Access to Financial Opportunities: Financially illiterate individuals may have limited
access to financial opportunities. This includes lower chances of obtaining favorable loan terms,
accessing credit, or participating in investment opportunities that could enhance their financial well-
being.

7. Impact on Health and Relationships: Financial stress resulting from illiteracy can negatively affect
physical and mental health. Moreover, financial difficulties can strain relationships, leading to
conflicts and instability within families.

8. Vulnerability to Scams and Fraud: Individuals lacking financial literacy may be more susceptible
to scams and fraudulent schemes. This can result in significant financial losses and erode trust in
financial systems.

9. Generational Impact: Financial illiteracy can be perpetuated across generations. If parents lack
financial knowledge, they may struggle to teach their children essential money management skills,
creating a cycle of financial challenges.

10. Reduced Economic Growth: At a societal level, widespread financial illiteracy can contribute to
reduced economic growth. A population with limited financial knowledge may struggle to participate
effectively in economic activities, hindering overall economic development.

11. Struggles with Economic Mobility: Financially illiterate individuals may face challenges in
improving their economic status. Without the ability to make sound financial decisions and build
assets, upward mobility can be impeded.

12. Underutilization of Financial Services: Financially illiterate individuals may underutilize

beneficial financial services and products. This includes neglecting opportunities for savings
accounts, retirement plans, and insurance coverage that could enhance their financial security.

1.17 6 ways to improve your financial literacy

Being financially literate means having the knowledge and confidence to effectively manage, save and
invest money for you and your family. This can include everything from getting out of debt, sticking to a

32
budget, buying insurance, exploring investments, and creating college or retirement savings plans.
We all have different levels of financial literacy, but aren’t sure how else to plan for retirement, or maybe
you’re wondering whether you should pay off your mortgage or pad the college fund. You may just be
looking to make more confident financial decisions and having your paycheck go as far as possible.
Wherever you are on your financial journey, here are six ways to improve your financial literacy skills to
help you achieve your short- and long-term goals.

1. Subscribe to financial newsletters.

For free financial news in your inbox, try subscribing to financial newsletters from trusted sources. You can
explore a large variety of topics and gain expert insight into current events and personal finance trends. And
if you’re not already a subscriber, you can subscribe to our Smart Strategies, designed to help you take your
financial journey to the next level with insight on retirement planning best practices.

2. Listen to financial podcasts.

Podcasts can be a great way to soak up financial news while you do housework, run errands or walk the dog.
You can find options that suit your interest on most podcast apps and music streaming services and hear
directly from financial experts. Learn practical tips for managing your money, simple explanations on
financial topics and how to build financial literacy as a family. For ideas, check out Best Personal Finance
Podcasts to Listen to from U.S. News and World Report.

3. Read personal finance books.

If you prefer books, there's no shortage when it comes to learning about personal finance. Explore Insider's
list of best personal finance books to find the top reads for budgeting and saving basics, paying off debt,
advice for first-time investors and strategies for building wealth.

4. Use social media.

According to a 2021 Magnify Money survey, investors between the ages of 18 and 40 use YouTube,
Instagram and TikTok as their source for financial information and investing research. You can use your
favorite social media channels to follow financial experts, get links to interesting articles and watch videos
that discuss financial topics. Consider joining a personal finance Facebook group where you can engage in
conversations and share resources with other people in a community.

33
5. Keep a budget.

All the financial guidance from experts won’t mean much if you don’t know where your money is going
every month. Start tracking your income and spending by setting up a budget using a simple spreadsheet or
website app. Your budget lets you gain a better understanding of your spending habits and how your
paycheck is allocated. With this knowledge, you can pinpoint places that may need to be tightened up or
opportunities for putting more money toward your savings goals.

6. Talk to a financial professional.

A financial professional can be a good advocate to have in your corner when you’re expanding your
financial know-how. They can answer your financial questions, whether it is about the basic day-to-day
money situations or more complex long-term scenarios. You can also work together to assess your current
situation and discuss a plan for meeting your financial needs and how to stay on track going forward.
Whatever your level of financial literacy, it’s important to keep your knowledge base growing. Be a lifelong
learner and continue to seek out new information and strategies that can improve your financial well-being.
Every step you take toward getting a better handle on your financial situation is a step in the right direction.
Knowledge is power and can help you make more and confident financial decisions through every stage of
your life.

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 Chapter 2
RESEARCH METHODOLOGY

2.1 OBJECTIVES OF THE STUDY

 To know the extent of financial literacy among

 The Mira Bhayandar resident.
 To understand the perception of People about financial literacy .
 To know the knowledge about finances.
 To study the knowledge Resources of financial literacy
 To understand the amount of money People put in Saving every month.
 To understand the upgrading knowledge of financial literacy
 To know the Sources of upgrading financial literacy.
 To Know any Specific place or person help.
 To study the behaviour of people regarding the use of credit cards.
 To study the behaviour of people regarding the use of Debit cords.
 To find the extent of financial budget in household expenses.
 To know the importance of financial literacy.
 To Study new ways to Spread Financial literacy.
 To study the security awareness of financial literacy
 To Study the courses of financial literacy
 To know how courses Improves or helps in financial literacy -
 To Study the review of credit cards
 To find People's use of credit cands offers.
 To understand if people's financial knowledge and future planning can be linked.

2.2 SCOPE OF THE STUDY

With the increase in the number of investors and governments plan to push savings for girl children, there is
going to be a substantial increase in investments by women.
Government has opened all women banks to bring more women into the banking network, indicating the
importance of savings by women. The study will be helpful to find out the ideal investment options for
women. These findings could be useful to the financial product creators like banks, mutual fund houses,
insurance companies, portfolio managers and other market intermediaries, to understand what an employed
woman may be looking for, in a financial product while taking investment decisions. Further research is
conducted to analyze the investment pattern of people in areas of Mira-Bhayandar.

2.3 METHODOLOGY

The research is based upon both primary and secondary data both. The primary data was collected through a
questionnaire designed exclusively for the study. Secondary data was taken from Research papers, journals,
magazines, and websites.

35
2.4 COLLECTION OF DATA

The research uses both Primary and Secondary data

2.4.1 Primary Data

Primary data are those which are collected for the first time and are original. A suitable combination of
Questionnaires and interview techniques is used to collect the required primary data. By using a
questionnaire, data has been collected from 100 sample respondents through a survey method.

2.4.2 Secondary Data

The secondary data are those which are already collected by someone for some purpose and are available for
the present study. Secondary data was collected from magazines, websites, and other such sources.

2.5 Tools of Analysis and Presentation

The collected data has been analyzed and interpreted by using different statistical tools such as percentages,
pie charts, bar charts, etc.

2.6 STRUCTURE OF QUESTINNAIRE

The questionnaire has been framed and circulated to collect primary data. The questionnaire contains
 Direct Questions
 Close end Questions
 Multiple Choice Questions

2.7 SAMPLE SIZE

Samples were collected from self-employed, Employed and daily wage workers through questionnaire. The
sampling size is 100, the sampling technique used for the study is Convenient Sampling

2.8 SAMPLING TECHNIQUE

Sampling technique is the technique used to select the sample size. Convenient sampling technique is used
for this research. Customers were taken according to the convenience of the research study. The respondents
from questionnaire (survey method).
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2.9 LIMITATION OF STUDY

The study suffers from the following limitations:

 The study is based on the opinion of only 100 respondents. It cannot be
generalized.
 The data was collected through structured questionnaire and analyzed based
on the information given by respondents.
 The study is based on the perception of the respondents.

37
 Chapter 3
LITERATURE REVIEW

Literature review is the process of going through the articles related to the topic of research topic, which are
published in journals, online databases, magazines, newspapers, books, or any other source of information
including online sources. Literature review helps researcher to know and understand the findings and views
of earlier researchers who have carried out research in an area similar or related to the topic of study. It also
helps in understanding the data collection methods and the statistical tools used for analyzing the data. The
key findings and the conclusion drawn by researchers are of immense help for any new researcher. It helps
us the researcher to find research gaps, which could be taken up for further studies.
A large body of literature is available in investments related to institutional investment pattern, portfolio
construction methods, portfolio performance evaluation, retirement planning, product preferences and many
more associated topics. Studies have been conducted by researchers on the gender differences in allocation
of assets, constituents of domestic savings, saving behaviour of household, gender differences in knowledge
about financial investments, investors risk tolerance, investor’s perception of various financial products.
Some of the most insightful studies conducted in India and outside are given below.

1. Nupur Gupta and Vijay Agarwal (2013) looked at the constituents of domestic savings and
investments by investors, from the cities of Mumbai and Delhi. A total of 251 respondents were
administered a structured questionnaire in person and with the help of an online survey portal. The
type of sampling chosen for the study was convenience and snowball sampling. Respondents from
different age groups and professions were contacted for the study. Data was collected from April to
November 2011. The reliability of the questionnaire was ascertained by Cranach’s alpha value.
Important variables for the study were extracted using factor analysis. The three factors identified were
the stock market factor, savings factor, and interest rate factor. For discrete data like investment in
stock market and city of dwelling, Chi square test was used to establish the presence or absence of
association. For finding the relationship between discrete independent variables like income level and
the investment pattern, a one-way ANOVA test was used. The investment patterns were categorized
as, Non-Risky, Risky and Combination. Classification was based on the composition of the investment
held by the respondents. It was found that bank deposit was the most preferred form of investment
followed by mutual funds, real estate, and gold. Significant differences were found in the investment
patterns of households between the cities of Mumbai and Delhi. Stock market investment was third
most preferred investment avenue in Mumbai whereas it was not so with the respondents from Delhi.
There was significant dependence of investment pattern on household income only in the age group of
40 to 49years. Interest rate did not have any relation to the investment pattern .This contrasts with the
study by Kabra (2010) where one of the factors influencing investment decision was the prevailing
38
 interest rate.
2. Geetha. N and Ramesh M, (2012), studied the role of demographic factors in investment decisions.
Response received from 475 respondents from Nagapattinam district of Tamil Nadu was used for
analysis. The sampling method used was convenient sampling. A well- structured questionnaire was
used to collect the data from the respondents. Statistical inference was drawn using ANOVA and Chi
square tests. The demographic attributes included age, gender, education, occupation, income, savings
size, and family size. The investment avenue considered for the study were gold, provident fund, life
insurance, real estate, bank deposits, postal savings, mutual funds, and equities.
According to the study, risk protection, safety of investment, rate of return and liquidity were the main
factors which influenced investment decisions. This is in line with the findings of Elder & Rudolph
(2003).
Graduates and postgraduates were more likely to invest in long term investment products. This
contrasts with the study by Al-Tammie (2009), who found no relationship between educational
background and investments. People in the age group of 31 to 40 years preferred investing in long
term investment products. People with a family size of four and above preferred short-term
investments. Self-analysis and advice from friends and relatives were the major source of investment
information. This study found that most of the respondents preferred monthly investments. Further it
was found that most of the respondents were driven by technical analysis and newspaper reports while
taking investment decisions. The most preferred investment was life insurance followed by real estate,
provident fund, gold, and silver, respectively. The researchers concluded that preference for real estate
and gold may be due to the boom in the prices of gold and silver during their period of study.

3. P. Parmashivivaiah, Puttaswamy and Ramya (2013) conducted a study in the city of Mysuru (Mysore),
to understand the factors influencing investment decisions. The sample size for the study was 120
respondents. They used judgment and snowball sampling to collect the data. The study was conducted
in the first half of 2013 in the city of Mysuru (Mysore). Statistical tools used for analyzing the data
were Percentage, mean, standard deviation, Chi square test, F test, ANOVA, and regression. Data was
classified based on the demographic profile of the respondents. It was found that liquidity was the
most crucial factor when choosing an investment portfolio as far as government employees and
entrepreneurs were concerned. This is like the findings of Geetha. N and Ramesh M, (2012). Private
employees and professionals gave equal priority to growth and liquidity. Women did not select
investments based on safety of the principal. This is in line with studies conducted by Annika, Sunden
and Surrette (2009) and Bernasek (2002). Based on the correlation between occupation and investment
objective, it was found that investment objective had no relation to the occupation of the respondent.
Liquidity and tax reduction were found to be the two important criteria for the selection of the
investment portfolio in this study.
39
4. Ravi Vyas and Suresh C Moonat (2012) conducted a study on the perception and behaviour of mutual
fund investors. The study was conducted to understand the preference of investors investment avenues,
mode and form of investment preferred by investors at Indore with a sample size of 500 respondents
out of which 363 respondents were investing in mutual funds, and these 363 respondent’s data was
analyzed to come out with conclusions. A structured questionnaire was used to collect the data during
personal interviews. To understand the nature of holding by the respondents, chi square test was used
along with the calculation of median and mode. After analysis of data, it was found that Gold was the
most preferred investment option followed by bank deposits and fixed deposits. Mutual fund
investment got an average score in parameters like safety, liquidity, reliability, and tax benefits. Most
of the investors were aware of the risk involved with mutual funds. Direct equity investment was not
the most preferred investment avenue. Respondents preferred less risky products in comparison to the
risky financial products.

5. Giridhari Mohanta and S S Debasish (2011) conducted a study on the investor preferences among the
investors from the city Cuttack and Khurda in Orissa. The sample size used for the study was 210
respondents, consisting of adults residing in the geographical area of the study. They used a structured
questionnaire consisting of 35 questions for collecting the data. The questionnaire had 12 questions
regarding the demographic attributes and 23 questions related to the numerous factors influencing the
investment avenue. A total of five investment avenues were considered for the study, namely, equity
shares, mutual funds, insurance, bank recurring deposits and postal schemes. Data was analyzed using
mean and percentage. Equity investment was risky. The study found that respondents having an annual
income of rupees 10 lakhs and above were willing to invest in equity market, whereas lower income
respondents preferred bank deposits and postal savings. This is in line with the findings of Raja ram
(2010) and Ravi Vyas and Muoonat (2012) Further the study found a relationship between occupation
and Investment Avenue. Business class respondents were willing to invest in equity and mutual funds,
whereas government employees preferred mutual funds, insurance, and bank deposits. Investors
considered safety of investment as a major criterion.

6. Umamaheshwari.S, Ashok Kumar (2011) conducted a study to understand the investment pattern and
awareness level of individuals belonging to the salaried class from the city of Coimbatore. A
structured questionnaire was used to collect the data during December 2010 to July 2011. Responses
from 1000 respondents were collected over a period of eight months from the areas of Valparai,
Pollachi, Metupalayam and Coimbatore. Statistical tools used for analysis were Chi Square test and
ANOVA along with mean value calculation. The awareness level was divided into three types: low,
medium, and high. Classification was based on the mean score obtained for the respondent. It was
40
 found that the most preferred avenue of investment was provident fund followed by insurance gold
and Jewelry. The financial product awareness level among adults was low. Married people had better
awareness compared to the unmarried ones. Savings and investment pattern were influenced by the
education level of the respondents.
7. Gaurav Kabra, Prashant Mishra, and Manoj Kumar Dash (2010) conducted a study to identify the
factors that could influence investment decisions of individual investors. The sample frame chosen for
the study was the investors who had invested regularly. Data was collected using a four-page
questionnaire containing questions related to demographic details and their investments. A total of 196
completed questionnaires, found complete in all respects were used for data analysis. The consistency
of the questionnaire was evaluated by calculating the Cronbach Alpha. The statistical test used were
standard deviation, percentage, Kaiser-Meyer-Olkin measure, factor analysis and regression. A total of
18 statements were identified to understand the investment pattern of individuals. Using factor
analysis six component factors were identified. The factors were security, opinion, awareness,
hedging, duration, and benefits. It was found that there were no significant differences of opinion,
security and hedging among different age groups. There was significant difference in the awareness
level, benefit, and duration among different age groups. Women preferred investment product carrying
higher level of security in comparison to men. This contrasts with the findings of P. Parmashivivaiah,
Puttaswamy and Ramya (2013) where women did not consider security as a main factor.

8. Sunita Bishnoi (2013) conducted a study consisting of 200 respondents from Faridabad, part of the
national capital region. It was found that the most preferred source of saving was life insurance
followed by deposits with banks, PPF and postal savings. This contrasts with Nupur Gupta and Vijay
Agarwal (2013), who found Bank deposits to be the most preferred investment avenue. Occupational
group and gender did not have impact on investment objective. This is in like the findings of P.
Parmashivivaiah , Puttaswamy and Ramya (2013). Newspapers and magazines were the preferred
source of information. Most of the investors preferred the investment horizon of five years or more.
Main investment objectives were safety of capital followed by tax savings. Age, income, and
education were found to have an association with the investment objectives. Respondents for the study
were picked using convenience sampling. A structured questionnaire containing questions related to
demographic details and the investment objective along with investment preference was administered
to the respondents. Simple percentage calculations along with the Chi square test were used to analyze
the data.

9. Pandian L and Aranganathan T (2012) conducted a study in the district of Cuddalore, to assess the
attitude of salaried people towards savings and investments. To collect the data, a structured
questionnaire was used. Sample size for the study was 520 respondents. The respondents covered
41
 different age groups of salaried class. The sampling technique followed was multistage sampling. To
measure the attitude of investor towards savings and investments, a five-point rating scale was used.
To identify the major aspects of savings and investments, factor analysis was used. ANOVA was used
to find the relationship among variables. Major aspects of savings and investments were found to be to
have a secure life and good future. There is lack of push from government to create savings habit. Past
wrong investments also had an influence over investments and savings decisions.

10. Parimal
Kanthi and Ashok Kumar (2013) conducted a study to understand the investment holding behaviour of
investors from the city of Coimbatore. The sample size for the study was 600, and the sampling plan
used was convenience sampling. A structured questionnaire was used to collect the data from the
respondents. Cluster analysis, and chi square test was used for classification of the investors and to
find the association between the personality type and the investments held. Based on the personality
profile of respondents, they were classified as Innovative, moderate, and conservative investors. Most
of the investors were in the category of innovative and moderate. Most preferred investment avenue
for moderate investors was Post office saving schemes followed by bank deposits and pension
schemes. This contrasts with the findings Nippur Gupta and Vijay Agarwal (2013) and P.
Parmashivivaiah, Puttaswamy and Ramya (2013) of Conservative investors preferred National Savings
Schemes (NSS) and were averse to chit funds. Innovative investors were willing to invest in mutual
funds and endowment policies, bank deposits, postal savings, life insurance policies and mutual funds.
It was found that mutual fund and endowment policy were independent of the personality type,
whereas other investment avenues under study were dependent on the personality of the investors.

11. Buchaiah
M. (2014) conducted a study to understand the perception of individual investors from the city of
Hyderabad, towards mutual fund investment. The sample size of the study was 300. Data was
collected from the respondents using a questionnaire. Convenience sampling was used for picking up
the respondents for the study. The questionnaire contained questions related to the demographic details
and their perception about mutual funds. Weighted mean value and percentage calculation were used
to analyze the data. The study found that investors under the age of 40 years were more conscious
about savings and investments. Growth fund was the most preferred mutual fund scheme followed by
balance fund and income fund.

12. Karthikey
an K, Bharta S and Ranjit Kumar K (2012) conducted a study to understand the perception of those
investors who were sold the mutual fund products by banks. The survey was conducted in the city of

42
 Tiruchirappalli city in Tamil Nadu. The sample size for this study was 108 and the method of
sampling used was convenience sampling. A five-point rating scale was used to capture the response
of the respondents. In the rating scale, one stood strongly for disagreement and five for strongly agree.
Questionnaires were distributed to only those respondents who had prior experience in mutual fund
investments. The statistical tool used for the analysis were factor analysis, multiple regression,
correlation and reliability statistics. It was found that, before taking investment decision investors
consider competitive product offerings, quality of service offered, past return on investment, safety,
communication from fund house and emergency need fulfilment.

13. Rajarajan
(2000), conducted a study on investor demographics and risk bearing capacity, using a sample size of
405 investors from the city of Chennai. The variables used for the study were age, occupation, family
size, income and the current investments made. The respondents were classified into four risk bearing
capacity categories R-I, R-II, R-III, and R- IV based on the percentage of investments in high-risk
assets to total financial investments made by the respondent. Considerable risk assets include equity
shares, mutual funds, and convertible debentures. R-I had no investments in risky assets, R-II and R-
III had elevated risk investment below 40 % and R-IV had more than 40% investment in high-risk
assets. To analyze the association between the risk bearing capacity and the independent variables viz.
age, occupation, family size and income, the Chi square test was used. The study found a strong
relationship between the four independent variables namely age, occupation, family size and income
and the risk bearing capacity of the investor. It also supported the earlier studies conducted confirming
the relationship between age and income and investment pattern.

14. Tirupati’s
(2012) in his study to understand the tax planning by individuals from Vellore district of Tamil Nadu
found that, there was lack of association between the age, marital status, and gender of the respondents
as far as tax planning is concerned. A Sample size of 750 respondents was used for the study.
Convenience sampling was used for the selection of the respondents. A structured questionnaire was
used for collecting the data. The study period was from July to December 2010. The data collected
were analyzed using mean and standard deviation along with simple percentage analysis, ANOVA and
Chi square test was used to find the association and relationship between the variables under study. To
measure the attitude a five-point Likert scale was used.

15. Aparna
Samudra and Bhurghate (2012) conducted a study to understand the investment behaviour among the
middle-class investors from Nagpur. The study was conducted to examine the preference of the

43
 investment instruments and investment pattern of the middle-class households along with the objective
of investment. The investment options considered for the study were Bank deposits, shares, mutual
funds, real estate, Kisan Vikas Patrika, and post office deposits. A sample size of 300 households was
used for the study. Statistical tools like percentage and mean were used for conducting the analysis.
The study found that bank deposit was the most preferred investment option followed by life insurance
Investment in provident fund and post office deposit were at the third and fourth place. This is like the
findings of Nupur Gupta and Vijay Agarwal (2013). Real estatewas found to be the least preferred
investment avenue. Investment in equity was not figuring in the preferred investment avenue across all
age categories.

16. Ramanuja
m. V and Chitra Devi K (2012) conducted a study to analyze the impact of socio-economic variables
on the attitude of investors towards investments. The sample size for the study was 100 respondents
from the city of Coimbatore. The sample consisted of respondents from different age group,
educational background income level and with varied level of awareness about the financial products.
A structured questionnaire was administered for collecting the responses of the respondent.
Convenient sampling method was used for picking up the respondents. To analyze the data, ANOVA,
mean and Chi square tests were used. It was found that the occupation of the respondent and the
frequency of making investment were not significantly associated. The study did not find any relation
between annual savings of respondent and purpose of investment. It was also found that there was no
difference in the investment patterns of respondents from government, public and private class of
investors. The findings of this study were different from most of the other studies that found an
association between the nature of jobs and income levels with the investment pattern.

17. Suyam
Prabha R, (2011) conducted a study to understand the Decision-making process and pattern of
investments by investors from the city of Coimbatore. The sample size for the study was 109
respondents. Data was collected using a well-designed questionnaire. Data was collected during
September – October 2009. Respondents were selected from among those who were working in Bank,
Non-Banking Financial Company (NBFC) in an Information Technology (IT) company. Statistical
tools used were simple percentage analysis, weighted average score and Chi square test. It was found
that the selection process of a suitable financial product depended on age, gender, marital status and
educational background, annual income and quantum of amount saved annually. The main purpose of
saving by married respondents was towards child education. Employees of NBFC firms were
moderate risk takers and were investing in mutual fund schemes. Bank deposit was the most preferred
investment avenue.
44
 18. Kathrivel.
N and Mekala.A (2009) conducted a study in Coimbatore district to understand the women investors’
perception towards online trading. The sample size for the study was 150. Convenience sampling was
used for the selection of the respondents. A well- structured questionnaire was used to collect data
from the respondents. Chi square test was used to find if there is association between the desired
variables and women investors perception. Investment-related variables included age, income,
educational qualification, occupation, and number of dependents. It was found that there was a
significant association between age, education qualification and time taken for investment decisions.
This is like the findings of Umamaheshwari.S, Ashok Kumar (2011). No significant association was
found between marital status and investment decision. This is like the findings of Tirupathi.T (2012)
but in contrast to the findings of Suyam Prabha R, (2011).

19. Syed
Tabaasum Sultana (2010) in her research work, studied the Indian investors behaviour to understand
the relationship between the risk tolerance level, age and gender of an individual .Researcher found
that investors were well educated and earned well, but were poor risk takers. A negative correlation
was found between risk tolerance level and age. This supports the findings of Srinivasan, Sakthi K and
Lakshmidevi S (2006). Among all the sources of information, television was found to be the most
influencing source of information to make investment decision for an investor. Overall investors have
a low level of risk tolerance.

20. Patti
Fischer (2010) used the Survey of Consumer Finance (SCF), 2007 data to understand the gender
differences in personal saving behaviour. Sample size was 1171. The sample frame for the study were
persons who were single and not married. This criterion was set to have clear understanding about the
investment decision maker. Statistical tools used were Likelihood ratio test and Logistic regression
analysis. The independent variables included age, income, risk tolerance, preferences, and
consumption needs. The respondents were classified as minimal risk tolerance and average risk
tolerance. Adults differed significantly as far as risk tolerance distribution was concerned. Over half of
the women were not willing to take financial risk. Difference between men and women was found in
short term and regular saving behaviour. Women with poor health were likely to save less in short
term, whereas poor health condition did not play any role in short-term saving of men. Women had
minimal risk tolerance Education level had positive relationship with the savings habit of men.

Past research works reviewed were in investments by individuals. Barring few, majority of the research

45
work taken up for review were conducted in the south Indian cities and towns. Literature review helped in
understanding the investment pattern of individuals, financial products preferred, risk tolerance capability of
individuals and the variables used for the study. It also helped in identifying the sampling techniques used
for collecting data and the statistical tests used for evaluating the hypotheses. It was illuminating to know
the findings of past researchers. Influence of demographic variable on investment decision, investment
pattern, financial product preference, risk tolerance was the focus area of researchers. Barring four
researchers, Majority of the researchers considered both women and men in their studies. It was observed
that, studies related to women were focused on finding the Association between demographic attributes and
risk tolerance, liquidity, safety, product awareness along with the identification of the most preferred
investment avenue. Majority of the Indian studies conducted used primary data. Use of a structured
questionnaire was the most common method for collecting data. Convenience sampling was used by most of
the researchers as far as Indian studies are concerned whereas studies conducted in USA used the data of
Survey of Consumer Finance (SCF), released by Federal Reserve periodically. Demographic details
collected by most of the researchers were gender, age, marital status, educational background, income level
and family size. Data was collected about the Sector of employment, nature of employment, frequency of
investment, savings percentage.
The investment avenues covered in the questionnaires in most of the studies included Bank deposits, Postal
schemes, Life Insurance, Gold, Mutual funds, Equity and Real estate.
Studies conducted prior to 1995 had National savings schemes and Unit trust of India Units as investment
options. Chit fund as a savings instrument was there only in two studies.
The questionnaire used in the current study covers all the above-mentioned avenues of investments. There
were diverse ways in which investors were classified by researchers based on the focus of their research
study. This knowledge was used in creating a method of classifying investment pattern into three broad
categories in the current study.

Some common findings of the studies covered under literature review are:

 Investors preferred bank deposits in comparison to other mode of savings.

 In rural areas, investment in postal savings was common. Gold and property were the most
preferred physical assets.
 The major purpose of saving is Children’s education. Investors were risk averse and were not
willing to take risk.
 Investor although being educated were not preferring to invest in equities. Mutual fund
investment was popular only in major cities and awareness level was poor in semi urban and
rural areas.

46
 Newspapers and Magazines were the main source of information. Investors consulted their
family and friends before taking investment decisions.
 It was found that most of the studies covered both male and female respondents as well as
households in general.
 There was a significant association between a few demographic attributes like age, marital
status, educational background and income level and investment pattern.
 Findings of many studies were comparable whereas some studies contradicted the findings of
earlier studies.

47
 CHAPTER 4
DATA ANALYSIS, INTERPRETATION AND PRESENTATION

1) WHAT IS YOUR AGE?

OPTIONS PERCENTAGE %
18-25 58
26-40 23
41-60 10
61 & above 9

18-25
26-40
41-60
ABOVE 61

INTERPRETATION:

58% Of the Working Women Belong to The Age Group Between 18 To 25 Years. 23%
Belong to The Age Group Between 26 To 40 Years And 10% & 9% of the Ladies Belong to
The Group Of 41 To 60 And Above 61 Years Respectively.

48
 2) GENDER

MALE

FEMALE

INTERPRETATION:
Out Of 100 Respondents, 78 of the Respondents are Male, While the 22 Respondents
are Female. Since usually male are the working person in the house so it was decided to
consider more male respondents compared to females.

49
3) WHAT IS YOUR EDUCATION?
OPTIONS PERCENTAGE %
SSC 8
GRADUATE 42
HSC 28
POSTGRADUATE 22

SSC
GRADUATE
HSC
POSTGRADUATE

INTERPRETATION:
From The Above Diagram, We Can See That 42% Of the People are Graduated, 22% Of
them are Post Graduated, 28% Of them are HSC passed & 08% of them have done their
SSC.

50
4) WHAT IS YOUR OCCUPATION?

OPTIONS PERCENTAGE
STUDENT 46
BUSINESS 18
SERVICE 29
HOUSEWIVES 07

7%

29% 46% SALARIES

BUSINESS

SERVICE
18% HOUSEWIVES

INTERPRETATION:
The occupational status of the 100 respondents is, 46 of them are student, 18 of them
are self-employed, 29 of them are Service Person and 07 of them are Housewives.

51
5 ) ARE YOU FINANCIAL LITERATE ?

INTERPRETATION:
82.5% of the respondents are financially literate rest 17.5% are not financially literate.

52
6) WHAT IS FINANCIAL LITERACY ?

INTERPRETATION:
50% of respondent says financial literacy is the ability to understand financial
management. On the other hand, 40% believe that knowledge and skills to make informed
financial decisions rest 10% says that understanding how to save money is financial
literacy.

53
7) HOW DO YOU RATE YOUR KNOWLEDGE ABOUT FINANCES?

INTERPRETATION:
37% of respondents have good knowledge on how to manage finance and there are
strongly agree with the statement.

54
8) FROM WHERE YOU KNOW THE KNOWLEDGE RESOURCES OF
FINANCIAL LITERACY?

INTERPRETATION:
50% of respondents learned about finance literacy on online resources. On the other hand,
40% have others way to learn about finance literacy via educational institutions and
others.

55
9) HOW MUCH MONEY DOES PEOPLE PUT IN SAVING?

INTERPRETATION:
35% of respondents are saving money of more than 6000, 32.5% save in the range of
2000-4000, and 17.5% save money in 1000- 2000.

56
10) HOW DO YOU CHANGES OR UPGRADE THE KNOWLEDGE
OF FINANCIAL LITERACY?

INTERPRETATION:
37.5% of respondents say that they change or upgrade their knowledge of financial
literacy by learning from financial education programs. 27.5% believe that they change or
upgrade their knowledge of financial literacy by learning from online resources and
others.

57
11) WHAT ARE THE SOURCES OF FINANCIAL LITERACY FOR
UPGRADATIONS?

INTERPRETATION:
62.5% of respondents say that sources of financial literacy for upgradations from
educational institutions, 20% upgrade their sources of financial literacy by Government
programs and others.

58
12) DID YOU GET ANY SPECIFIC ADVICE FROM ANY PERSON ?

INTERPRETATION:
60% of respondents say that always take advice from the well-known person before
financing or investing something. 40% don’t take advice from any person.

59
13) HOW OFTEN DO YOU USE CREDIT CARD ?

INTERPRETATION:
70% of respondents say they generally use credit card while purchasing any product, 15%
say they use credit card once in a month and others use credit card weekly or daily.

60
14) HOW OFTEN DO YOU USE DEBIT CARD ?

INTERPRETATION:
34.1% of respondents say they used debit card once in a month, 31.7% say they never
used debit card to pay for any service and product while 24.4% people use debit card on
weekly basis. On the other hand, 9.8% respondents uses debit card on daily basis.

61
15) DO YOU PREPARE FINANCIAL BUDGETS FOR YOUR
HOUSEHOLD EXPENSES?

INTERPRETATION:
46.3% of respondents say they always prepare financial budget before expenses. On the
other hand, 34.1% say sometimes they prepare financial budget before expenses, 17.1 %
never planned financial budgets for their household expenses.

62
16) WHAT ARE THE IMPORTANCE OF FINANCIAL LITERACY?

INTERPRETATION:
51.2% of respondents say the importance of financial literacy is to managing finances and
34.1% believe that investing knowledge is the importance of financial literacy. And
others.

63
18) SECURITY AWARENESS OF FINANCIAL LITERACY AMONG
THE RESIDENT OF MIRA BHAYANDAR?

INTERPRETATION:
39% of respondents say the awareness of financial literacy can be done in Mira-
Bhayandar by workshops and seminars. On the other hand, 29.3% believe that
collaborating with banks can create awareness of financial literacy and others say that
can be done via school programs and mobile apps. There were mixed responses when
asked about the security awareness of financial literacy. Respondents believe word of
mouth is important compared to other ways. Mobile apps received the lowest vote as
respondents don’t want to get indulged in any fraud practices.

64
19) ARE YOU INVOLVED IN ANY COURSES REGARDING
FINANCIAL LITERACY?

INTERPRETATION:
70.7% of respondents are not involved with any courses related to financial literacy. while
29.3% are already involved in courses in financial literacy. As people are getting more
involved in the crypto market, having knowledge of the market is the most important
factor. People have taken lessons from experienced finance researchers and learning from
social media like YouTube by just sitting at their home.

65
20) DO YOU USE CREDIT CARD OFFERS ?

INTERPRETATION:

According to the responses 60.9% of respondents consider credit card offers to make purchases. While
34.8% of people don’t use credit card or don’t consider credit card offers. Credit card is considered as
one of the most important modes of payment since they give credit limit to the buyer which helps them
to utilize their money in different things at the same time. Many people enjoy the grace time to repay
the credit amount and lot of other offers. While on the other hand some people think of it as a liability.

66
21) DO YOU THINK FINANCIAL LITERACY WILL HELP YOU
FUTURE PLANNING?

INTERPRETATION:
92.7% of respondents agreed that financial literacy will help them in their future but 7.3%
do not agree with the planning of financial literacy will help them in future. This response
depicts that as people are growing digitally they think it is important to have financial
literacy to have a sustainable future for the family. While some people think having basic
knowledge of savings and investing is enough for the betterment of the future.

67
 CHAPTER 5
SUGGESTIONS

 Investment decisions of individuals are driven by multiple Factors, and it was found that the
financial literacy level of employed Women was low. It is suggested that the financial product
creators, marketers, and regulators should try to increase the financial literacy level of women
by conducting training programs and workshops on regular basis either independently or
through their employers.

 The government should make available more tax savings products to reduce the concentration
of savings in Life Insurance and Provident fund.

 Pension Fund Regulatory and Development Authority (PFRDA) should create more awareness
about National Pension System (NPS) so that more people will be motivated to think about
retirement planning among employed women.

 Women should be encouraged to invest in more avenues and participate in the investment
avenues which involves high risks and high returns.

 Women should focus in making a formal financial plan to have a focus on the financial goals.

 Women should increase their awareness level of the portfolio diversification to spread their
risks.

 Women should recognize their financial independence and plan to make it better.

 Government should start more innovative projects like ‘Mahila Bank’ where it will be easier
for women to make their investments.

 Awareness about various investment avenues must be made with their relative merits &
demerits. Investment guidelines must be made known to every individual through their
organizations.

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 CONCLUSIONS

□ Individuals at some stage of their life get involved in investing their savings. There is a
continuous increase in the number of educated employed women. There is increase in the job
opportunities for qualified women in many sectors led by the software, banking and financial
services and the education sector.

□ Count of employed women having independent source of income is increasing year on year,
leading to increase in savings by women. Women by nature are savers and invest their savings
into wide range of financial products and physical assets.

□ Market participants are also realizing the importance of the rapid increase in the number of
women investors and are gearing up to meet their demands related to investments and allied
services. It will be useful to know about the financial and physical assets held by employed
women to assess their needs and preferences.

□ Women are familiar with traditional investment products like bank deposits, insurance, and
postal savings products. Awareness about Postal schemes was high but investment by
respondents is low, indicating that urban employed women have lost interest in postal savings.
As most of the women are tech savvy and use internet for transactions, the lack of such facility
by postal department could be one of the reasons for lack of interest in postal savings schemes
by urban women.

□ It was found that awareness level about Bank deposits, Insurance and postal savings was
extremely high and awareness about commodities market awareness was extremely poor.

□ The study revealed that the most popular investments held by the respondents were bank
deposits, insurance, provident fund, gold jewelry and mutual funds. Few Employed women
avoided investments in commodities and equities as they considered them to be highly risky.

□ Since this research has been conducted on the women investors and a study of their investment
behaviour, it is important to understand the several types of investors.

□ Women Investors have their own investing styles: some are risk takers by nature, willing to
gamble copious amounts of money on highly speculative investments others prefer the safety
and security of cash in the bank even if it means that the actual buying power of their money is
69
 slowly dwindling because of inflation.

□ Most people fall somewhere in between these extremes, and are willing to assume some risk,
with the expectation that they’ll be rewarded with higher returns.

□ With a growing divorce rate, the number of single mothers is on the rise. Providing for and
raising a family, while also saving for college and retirement, can be a daunting task. One way
to help ensure that you have enough savings is to invest a small amount regularly through a
systematic investment plan.

□ Main purpose of investment for employed women is children’s education and marriage

□ Women investor’s preferences are showing the willingness to invest in a particular or a set of
assets in the present situation. The Indian capital market has proved a fertile ground for
investors to make money. In fact, a great public enhancement with paper assets began during
the 1980s. Of late, the investor’s preference seems to have shifted from equity to debt capital.
The investor’s preference may significantly differ according to their location. The rural and
urban background of the investors may lead to the investor’s preference among the various
choices.

70
 CHAPTER 6
ANNEXURE

 your age?*
 18-25
 26-40
 41-60
 61 & above

 Gender*
 male
 female

 Qualification*
 SSC
 HSC
 Graduated
 Post Graduated
 others

 occupation*
 students
 business
 service
 housewife

 Are your financially literate ?*

 yes
 no

 What is financial literacy ?*

 The ability to understand financial management
 understanding how to save money
 knowledge and skills to make informed financial decisions
 The ability to invest in the stock market

 How do you rate your knowledge about finances ?*

 strongly agree
 agree
 neutral
 strongly disagree
 disagree

 From where you know the knowledge resources of financial literacy ?*

71
 Educational institutions
 online Resources
 books and publications
 Financial advisor

 How much money does people put in saving?*

 1000-2000
 2000-4000
 4000-6000
 6000-above

 How do you change or upgrade the knowledge of financial literacy ?*

 Financial Educations programs
 online resources
 Financial literacy events
 Mobile Apps and tools

 What are the sources of financial literacy for upgradations ?*

 Educational institutions
 Government programs
 non-profit organization
 financial advisor

 Did you get any specific advice from any person ?*

 yes
 no

 How often do you use credit card ?*

 monthly
 weakly
 Daily
 Never

 How often do you use debit card ?*

 Monthly
 weakly
 Daily
 Never

 Do you prepare financial budgets for your household expenses ?*

 yes
 no
 sometimes
 never
72
 what is the importance of financial literacy ?*
 managing finances
 investment knowledge
 saving and retirement
 Avoiding scams

 what more can be done about financial literacy ?*

 Workplace workshops
 online resources
 Public Awareness campaign
 Financial Counseling services

 security awareness of financial literacy among the resident of Mira Bhayandar?*

 workshops and seminars
 Collaborate with banks
 school programs
 Mobile apps

 Are you involved in any courses regarding financial literacy ?*

 yes
 no

 what courses you involved in financial literacy ?*

 Personal finances basics
 Banking and checking Account
 credit & debt management
 Risk management

 How do you view a credit cards ?*

 Asset
 Liability

 Do you use credit card offers?*

 yes
 no

 Do you think financial literacy will helps you to future plannings ?*

 yes
 no

73
 CHAPTER 7
BIBLIOGRAPHY

https://cliftoncorbin.com/advantages-and-disadvantages-of-financial-literacy/

https://www.athene.com/smart-strategies/6-ways-to-improve-your-financial-literacy.html

https://www.redstareducation.co.uk/blog/the-effects-of-financial-illiteracy/

Rferences
1. Ross Levine , Philippe Aghion , Steven Durlauf

Finance and growth: Theory and evidence

Handbook of Economic Growth Posted: 2005

2. Dr , Governor Subbarao

Delivering Financial Literacy-challenges, Approaches, and Instruments" at Bangalore during 22-23

3. Abdul Ghani , Zamani

Re-engineering the Malaysian financial system to promote sustainable growth

4. Thorsten Beck , Asli Demirgüç-Kunt , Maria Soledad Martinez , Peria

Reaching out: Access to and Use of Banking Services Across Countries

Journal of Financial Economics , volume 85 , issue 1 , p. 234 - 266 Posted: 2007

1. Jehangir Pheroze Bharucha

Socio-Economic and Demographic Determinants of Indian Youth Financial Literacy

International Journal of Asian Business and Information Management , volume 8 , issue 4 ,

p. 15 Posted: 2017

Crossref

2. Shruti Malik , Girish Chandra Maheshwari , Archana Singh

Understanding Financial Inclusion in India: A Theoretical Framework Building Through SAP–LAP

and Efficient IRP

Global Journal of Flexible Systems Management , volume 20 , issue 2 , p. 117 Posted: 2019

Crossref

74
3. Jehangir Pheroze Bharucha

Dynamic Perspectives on Globalization and Sustainable Business in Asia

, p. 154 Posted: 2019

Crossref

4. Julaina Baistaman , Zainudin Awang , Asyraf Afthanorhan , Mohamad Zulkifli Abdul Rahim

DEVELOPING AND VALIDATING THE MEASUREMENT MODEL FOR FINANCIAL

LITERACY CONSTRUCT USING CONFIRMATORY FACTOR ANALYSIS

Humanities & Social Sciences Reviews , volume 8 , issue 2 , p. 413 Posted: 2020

Cross ref:-

www.amfiindia.com

www.bseindia.comm

www.mutualfundsindia.com

www.india.gov.in/nsso-reports

www.mcxindia.com

www.mospi.nic.in

www.ncaer.org

www.nhb.gov.in

www.nism.ac.in

www.nseindia.com

www.rbi.org

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