Understanding the Role of Financial Literacy in Enhancing Economic Stability and Resilience in Montenegro: A Data-Driven Approach

Ivana Katnic (), Milorad Katnic, Marija Orlandic, Marija Radunovic and Ilija Mugosa
Additional contact information
Ivana Katnic: Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro
Milorad Katnic: Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro
Marija Orlandic: Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro
Marija Radunovic: Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro
Ilija Mugosa: Faculty for International Economics, Finance and Business, University of Donja Gorica, 81000 Podgorica, Montenegro

Sustainability, 2024, vol. 16, issue 24, 1-25

Abstract: Financial literacy has emerged as a crucial factor in promoting economic stability and resilience, particularly in Montenegro. With the increasing complexity of financial products and the growing need for individuals to make sound financial decisions, the importance of financial literacy cannot be overstated. This study employs a quantitative, survey-based approach to explore the association between financial literacy levels and measures of economic stability, including savings rates, active debt management, and access to financial products. Data were collected through a representative, two-stage stratified sample of 1000 Montenegrin adults aged 18–79, ensuring comprehensive geographic coverage across all Montenegrin municipalities and balanced representation by gender and age. This stratification enables a detailed analysis of financial literacy trends across the population. Correlation analysis reveals that higher levels of financial literacy are associated with better financial practices, such as increased savings and responsible credit use, thereby enhancing economic resilience at the household level. Moreover, improved financial literacy contributes to sustainability by fostering long-term financial stability, reducing inequalities, and promoting inclusive economic growth. The findings suggest that financial literacy can mitigate the impact of economic shocks, emphasizing the need for policies that promote financial education as a tool for sustainable development. This study contributes to the literature on financial literacy in emerging economies and offers actionable insights for policymakers in Montenegro and similar contexts, highlighting financial education as a pathway to individual and national economic resilience.

Keywords: financial literacy; economic stability; emerging economies; financial behavior; household savings; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/24/11065/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/24/11065/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:24:p:11065-:d:1545706

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().