Financial Literacy in Malaysia, 2015-2018

Yiing Jia Loke (), Phaik Nie Chin () and Fazelina Sahul Hamid ()
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Yiing Jia Loke: School of Social Science, Universiti Sains Malaysia
Phaik Nie Chin: Graduate School of Business, Universiti Sains Malaysia
Fazelina Sahul Hamid: Bristol Business School, University of the West of England, Bristol

Malaysian Journal of Economic Studies, 2022, vol. 59, issue 2, 171-197

Abstract: This paper provides an overview of the state of financial literacy of Malaysians using data from the OECD (INFE) Financial Literacy Survey conducted in the year 2015 and 2018. Besides the three components of financial literacy, namely, financial knowledge, financial attitude and financial behaviour, this paper also analyses the financial vulnerability of individuals. The effects of socio-demographic factors excluding gender are significant in determining financial literacy levels. Generally, Malaysians do not think that they have high financial knowledge, and the objective financial knowledge assessment reflects this as less than 40% of the respondents meet the minimum financial knowledge target score. There are no significant differences in the level of financial knowledge between 2015 and 2018 but financial attitude towards money usage has worsened in 2018 when compared to 2015. However, in terms of financial behaviour, Malaysians are generally active savers, set long-term financial goals, make considered and informed purchases, and keep a close watch on their personal affairs. Malaysians are financially vulnerable, but they seem more prepared in weathering the storm and having financial cushions for emergencies in 2018 compared to 2015. The findings suggest that more effort is needed in educating Malaysians on fundamental financial concepts and ways to enhance their financial cushion.

Keywords: Financial knowledge; financial attitude; financial behaviour; financial cushion; financial vulnerability (search for similar items in EconPapers)
JEL-codes: D14 G51 G53 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:59:y:2022:i:2:p:171-197

DOI: 10.22452/MJES.vol59no2.1

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