Financial Literacy and its Determinants among Households in Jimma Zone

Abstract

Financial literacy become a topical issue in academics and policy circles, both in developed and developing countries, for the fact that low level of financial literacy prevailing across the world. The objective of the study calls for a quantitative research design and particularly a cross sectional survey research approach. The research focused on the urban area of Jimma Zone because of the fact that required financial literacy and financial behavior of rural and urban household operating at various level of financial decision making scenario is better to be studied separately since the main purpose is to provide input for designing a targeted financial literacy education. Generally, female encountered different problem in the society and did not aware about the financial services and products delivered by the financial institution. Therefore, female level of financial literacy is low compared to their male counter.The study indicated that literacy in general and household literacy in particular has a very close relationship to acquire financial literacy and financial knowledge. In general, as the academic level of household increase, their saving behavior showed improvement.Government has to take the major role in installing the saving culture through financial literacy and financial inclusion. In addition the government stabilization of inflation, implementing forced saving, modernization and accessible the saving institution, stabilization of the income level of household and reviewing the saving interest rate is vital to see adult financially literate and economically able in the near future.