Assessing the Impact of Financial Literacy on Savings Behavior in the Informal Sector

Emmanuel Sibanda, Tendekai Ashley Muzavazi, Tsepeso Setoboli and Nothando Tshuma
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Emmanuel Sibanda: National University of Science and Technology, Bulawayo, Zimbabwe
Tendekai Ashley Muzavazi: National University of Science and Technology, Bulawayo, Zimbabwe
Tsepeso Setoboli: National University of Science and Technology, Bulawayo, Zimbabwe
Nothando Tshuma: National University of Science and Technology, Bulawayo, Zimbabwe

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 2889-2899

Abstract: Financial literacy is a crucial determinant of economic stability and growth, particularly in the context of Zimbabwe’s economic development. A well refined understanding of financial of financial concepts enables individuals to optimize resource allocation, thereby promoting both personal and national economic well-being. Thus, quantitative study investigates the relationship between financial literacy and savings behaviour among informal sector participants in Zimbabwe, utilizing a purposive sample. The empirical findings reveal a statistically significant positive correlation between financial literacy and savings propensity, indicating that individuals with higher educational literacy exhibit more robust savings behaviours. These results underscore the pivotal role of financial education in enhancing savings habits among informal sector workers. The findings inform policy recommendations for stakeholders, including policy makers, financial institutions, and educational entities, to develop targeted financial literacy initiatives. Such interventions are critical for fostering improved financial management, increasing, increasing savings rates, and ultimately contributing to Zimbabwe’s economic stability and growth. Future research directions include longitudinal studies to capture temporal dynamics and qualitative investigations to provide deeper insights into individual savings behaviours and financial decision-making processes.

Date: 2025
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