Role of financial knowledge in making investment and financial decisions by farmers in Albania

Aim: The purpose of the study is to highlight the importance of financial knowledge among farmers in Albania, and to assess the current state of financial education within the agricultural sector. This study also aims to identify the main factors that influence the farmer’s financial knowledge and decision-making, and investigates through questionnaires if the financial literacy of farmers is directly related to the level of education or experience on the farm, as well as whether it will have an impact on the performance of the farm. Methods: This study uses a qualitative approach. This paper is based on a structured face-to- -face survey with 25 farmers in the Maliq area (District of Korçë, Albania). The respondents were selected in a random-purposive method and represented about 25% of farms registered in this area. Results: This study is very important to understanding whether the financial system offers appropriate financial products for farmers, and if there is an appropriate level of support by state institutions and by private institu­tions that deal mainly with the agricultural sector. Our results conclude that farmers do not have much financial knowledge, while also saying that it is very important regarding the decisions they make on the farm, regarding their sustainability in the market, risk management and the management of the obliga­tions they have. Most farmers are not market-oriented and do not have any contracts. Conclusions: This study has revealed key aspects of financial education among farmers in Albania, which significantly impact the efficiency of agricultural holdings. The findings indicate that the level of financial literacy among farmers remains low, limiting their ability to manage financial obligations and effectively utilize available resources. Additionally, their restricted access to credit, low propensity to save, and weak engagement with banking services may contribute to reduced agricultural productivity. These results highlight the need for further educational initiatives and institutional support in the field of agricultural finance.