INTRODUCTION

The revolutionary changes in the financial market has made it mandatory for the consumers to
be more informed, knowledgeable and efficient in managing their finance. With this
background the understanding of financial concepts, products, services and the relationship
among various financial principles is necessary in order to have financial security and stability.
The world as on today is open with various options of investments, as the financial market
provides ample of investment opportunities, the access to financial services has been increased
through technology, easy payment options through the use of credit cards, debit cards, net
banking, mobile banking as well as now a day’s mobile wallet makes it easier to pay and to
receive money as and when needed.
The World Development Report 2015 asserted that the ignorance and lack of knowledge
prevents women to take effective investment decision. It is observed in the past studies that
women were dependent largely on their husband, children pre and post their retirement age.
Due to education and upliftment of women in society post-independence, studies observed that
there is an increase in the level of female employment, literacy level, standard of living, earning
capabilities as well. Thus, there is essentially an urgent need that women should be well
equipped about the personal financial matters. They should be literate enough on how to save
effectively their hard earned money, how to be economical in budgeting, what are the
investment options available, which options will provide them financial security, safety of
money and attractive returns. It’s their right as well as responsibility to make all those efforts
for financial well-being.
Today, the financial market offers various options for saving as well as investments. Also, there
are numerous tools like debit cards, credit cards, online transaction facilities, online trading of
securities which require awareness of how these tools work. The personal involvement of
women in the financial market has increased. The world at large has realised the fact that it is
important for women to be financially literate so as to take well informed financial decisions
resulting in favourable financial outcomes. Financial literacy is the ability to understand,
access, and utilize information regarding monetary concepts and institutions so that it
contributes to money management.
There is an increased responsibility on the individuals to take their financial decisions wisely
because of the availability of variety of financial products and services. It is imperative that
individuals should develop sound understanding of the world of finance, to be more
knowledgeable and competent in managing the finance and for that it is necessary to choose
such products and services that are most appropriate to their financial goals and needs.
Financial literacy is an important phenomenon as the above stated facilities and many more can
be availed safely, promptly and with a great assurance if one is aware of these financial tools.
Thus, we can say financial literacy is about empowering and enlightening individuals about the
financial concepts, tools, techniques, products and services available in the market. It’s about
provisioning knowledge about finance so that they can use the same in evaluating the financial
opportunities, choose the best one and thus can take well informed financial decisions.
Individuals who are not literate about the financial concepts usually saves less, only few of
them plans with regard to their retirement needs and thus, majority get engaged in the high cost
mortgages. Financial literacy is important to make self-beneficial financial decisions but also to
select the favourable financial products. An individual can plan a lot with regard to the
available credit options, insurance coverage, transparent financial services.
Thus, the consumer if is financially literate can create pressure on the government and financial
institutions to work in the right direction with regard to the market standards. Thus, financially
literate consumer reinforces healthy pressure on market players for fair prices and negotiation,
transparency in prices and services.
Financial literacy is being identified as a mechanism which goes beyond the provisioning of
financial information and advice , provides an understanding of various products belonging to
financial market, the related risk and return attached so as to make proper decisions and to save
an individual from potential market abuses.
Financial literacy being defined as the basic of financial knowledge, essential skills for all
round development of society. It is one of the essential commodities for the mankind for
survival and development. Financial literacy not only aims at making an individual equipped
with financial decision making capabilities but also to raise the level of awareness about
financial risks , products and services, rights and responsibilities , market at a large.
There is a systematic lack of personal finance education in our education system resulting
serious financial illiteracy, costly consequences and thus affecting personal productivity in
work place .There is tremendous development in the financial market various policy makers as
well as the decision makers identify the need of increasing the financial literacy level among
the public
Today, making the individuals financially literate is one of the areas of concern, one of the
national strategies to boost the economic growth in the country. In order to improve the
financial well-being of citizen’s government of many nations accepted financial literacy as one
of the national strategies and for the same many financial education programs are organised at a
large scale world-wide.
Needs
Today, the financial market is highly vulnerable. A lot of complexities are being identified in
various avenues like derivative trading, credit schemes, loan options, saving and investment
scheme, insurance – banking facilities, timely payment of installments etc. The issue of
financial literacy is being identified as of great concern internationally because of increasing
magnification of international transactions, mobility of men and machines due to liberalized
economies worldwide.
Because of low level of financial literacy among women they cannot take sound financial
decisions. Majority of time they are in financial stress and thus, anxiety prevails in their life
affecting financial security and stability. Knowledge and enlightenment of financial concepts,
principles can help to effectively control the emotions that affect their financial decision
making and make them more confident on financial management capabilities.
The need of financial literacy can be summed up in the following points-
1. Increase in the Life Expectancy-studies show that there is an increase in the life
expectancy. Thus there is a greater need of effective financial planning; extensive insurance
coverage and adequate provision should be made of health care related expenses to cover future
contingencies.
2. Increase in an Individual’s Responsibility- There is an increase in an individual’s
responsibility as majority of families are shifting toward the nuclear family pattern .An
individual alone has to make number of financial decisions related to spending, saving,
investments, credit, healthcare needs, increasing education costs. If a woman is well informed
about the financial decisions to be taken, she can participate in financial decision making for
the family along with her husband.
3. Financial Product and Services Innovation- As the women of today are becoming
financially independent they are accessing wide variety of financial products and services.
Thus, understanding the innovations is crucial and challenging for them.
4. Large number of financial service providers in the financial services industry- Due
to globalization and privatization, major portion of financial services industry is open for
private institutions as well as foreign corporates, resulting in wider access to variety of
consumers. Increased competition among the financial products as well as the service providers
thus offered customized financial solutions to individuals. There is an increased competition
among the market players in order to have large number of customers and market share .
5. Multifaceted Features Of Financial Products: Taking financial decisions today is the
most complex activity, as because of different financial needs, specific priorities, money
availability at different time stages, more customized options with regard to time span, interest
rate, terms of contract, benefits available etc. much greater amount of perceived risks,
comparison of various factors and options are available. Thus, making the whole decision-
making and product selection process very complex.