Need And Challenges of Financial Literacy in Rural Areas

This study specifies the need and significance of financial literacy in the development of rural areas, and it also covers the challenges of financial literacy in rural areas. Financial literacy refers to the mixture of knowledge, skills, attitude and awareness required to make sound and optimum financial decisions. It is the ability to manage finances well through making proper utilisation of available resources for getting maximum benefit. In this modern era, financial literacy has become one of the top priorities for all nations because it is directly related to the economic growth of a country. Financial literacy is playing a vital role in enhancing the socio-economic empowerment of the Indian community and its rural areas. As per the 2011 census, India holds 17.5% of the world population, and more than two-thirds of India's population resides in rural areas. The government is conducting a wide range of financial literacy programmes in rural areas to improve financial literacy awareness among them. Apart from this, due to a lack of access to financial education in rural areas, there are many challenges to financial literacy. According to a study conducted by SEBI, only 27% of India's population is financially literate; the rates are even lower in rural areas. As per a global survey, 76% of India's adult population is not even aware of the basic financial concepts. This study examines how to enhance financial literacy awareness in rural areas and how to manage the challenges related to it.