Demographic and socio-economic differences in financial information literacy among university students

Abstract

Financial information literacy helps to manage earnings, especially among those students who study non-commerce subjects. Thus, this study attempts to explore the differences in such literacy through their demographic and socioeconomic characteristics. A well-structured instrument was used to gather data from 382 non-commerce students in universities in Pakistan using a multi stage sampling technique. Analyses were conducted through percentage of correct response technique and group comparisons. The findings indicate an average level of financial knowledge among university students. The demographic differences reveal that most of the students are male, graduate, with age above 26, enrolled in a private university, residing in dormitories, and score higher in academic subjects are more financially literate. While the socioeconomic differences indicate that those students who follow family advice, study minor finance courses, maintain a bank account, and have higher parental income are more knowledgeable about finance. The study recommends arranging awareness sessions to impart financial knowledge to students.

Full text

Article
Demographic and socio-economic
differences in financial information
literacy among university students
Faiza Liaqat
University of the Punjab
Khalid Mahmood
University of the Punjab
Fouzia Hadi Ali
University of the Punjab
Abstract
Financial information literacy helps to manage earnings, especially among those students who study non-
commerce subjects. Thus, this study attempts to explore the differences in such literacy through their demo-
graphic and socioeconomic characteristics. A well-structured instrument was used to gather data from 382
non-commerce students in universities in Pakistan using a multi stage sampling technique. Analyses were
conducted through percentage of correct response technique and group comparisons. The findings indicate
an average level of financial knowledge among university students. The demographic differences reveal that
most of the students are male, graduate, with age above 26, enrolled in a private university, residing in
dormitories, and score higher in academic subjects are more financially literate. While the socioeconomic
differences indicate that those students who follow family advice, study minor finance courses, maintain a bank
account, and have higher parental income are more knowledgeable about finance. The study recommends
arranging awareness sessions to impart financial knowledge to students.
Keywords
information literacy, financial information literacy, university students, demographic characteristics, socio-
economic characteristics
Submitted: 19 March, 2020; Accepted: 14 June, 2020.
Introduction
The end of the 20th century has witnessed renewed
importance in the area of information literacy. Several
aspects of information literacy are already available in
academia, such as health literacy (e.g., Ayre et al.,
2020; Balmer et al., 2020; Meyers et al., 2020), digital
literacy (e.g., Lazonder et al., 2020; Porat, Blau and
Barak, 2018), financial information literacy (e.g.,
Acheampong, 2015; Sarigul, 2014), credit card lit-
eracy (e.g., Limbu and Sato, 2019), and mobile lit-
eracy (e.g., Jere-Folotiya et al., 2014). Financial
information literacy (FIL), highlighted as a potential
research area by Faulkner (2015), is increasingly
becoming a grave concern to cope with today’s
complicated financial environment (Arceo-G´omez
and Villag´omez, 2017; Belousova et al., 2019; Rodri-
gues et al., 2019). The strong need for FIL arose after
the US financial crisis in 2008 (Miller et al., 2014).
Individual financial information illiteracy may affect
the whole of society (Wright, 2016).
The term ‘financial information literacy’ is rela-
tively new in the literature and is often used inter-
changeably with the term, financial literacy. To date,
Corresponding author:
Faiza Liaqat, University of the Punjab, Quaid-i-Azam Campus,
Lahore, Punjab 54590 Pakistan.
Email: faiza_mp1601@hcc.edu.pk.
Information Development
ªThe Author(s) 2020
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/0266666920939601
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2021, Vol. 37(3) 376–388

the literature does not cover the difference between the
two constructs (e.g., Ballestra and Cavaleri, 2016;
Kelly et al., 2010). However, a distinction can be iden-
tified between financial information literacy and finan-
cial literacy after clarifying the definitional aspects of
both. The term financial literacy was first coined in
1787 in the USA (Garg and Singh, 2018) and was
proposed in academic literature during a survey con-
ducted by Jump$tart Coalition in 1997. Financial lit-
eracy refers to one’s capability to use skills for
managing financial resources efficiently and effec-
tively (Hastings, Madrian, and Skimmyhorn, 2013).
To date, there is no consensus on a single definition
of financial literacy due to its broader scope. The Pre-
sident’s Advisory Council on Financial Literacy
(PACFL) defines financial literacy as the requisite
skills and abilities that individuals possess to utilize
financial resources in an efficient way, which ulti-
mately aims at economic welfare (President’s Advi-
sory Council on Financial Literacy (PACFL), 2008).
Financial information literacy is a critical compo-
nent of information literacy (Spiranec, Zorica, and
Simoncic, 2012). It refers to an the aptitude of individ-
uals to seek out and use information about the financial
products and services that may help them in their mon-
etary well-being. The individuals who can seek and
learn about financial information, its types, and asso-
ciated issues are expected to have a higher level of
financial information literacy (Potnis and Gala,
2019). Individuals who do not possess adequate prior
financial knowledge can obtain financial information
through various sources or channels (such as newspa-
pers, books, and government publications). However,
individuals seeking financial information may not
necessarily be financially literate because they have
financial knowledge but may not be able to apply that
knowledge in their daily lives. Thus, financial informa-
tion literacy is regarded as a prerequisite condition for
an individual to be financially literate.
FIL is crucial among all segments of society, espe-
cially for youth, because they have to face higher risks
than their parents to confront uncertain futures
(Ansong and Gyensare, 2012). According to the
National Human Development Report (2017), Paki-
stan is among the youngest countries, having 64%of
its population under the age of 29 years. The National
Youth Policy (2009) has defined youth as individuals
under the age of 15-29 years; they constitute 30%of
the total population (Najam and Bari, 2017). Global
Financial Literacy Ranking reveals that, as compared
to neighboring countries, 26%of youth in Pakistan is
financially literate, based on numeracy, interest com-
pounding, risk diversification and inflation-related
knowledge (Klapper, Lusardi and Oudheusden,
2015), which is higher than India (24%), Bangladesh
(19%), and Afghanistan (14%). Denmark and Norway
are the highest financially literate nations of the world,
each of them having a 71%score (Klapper et al., 2015).
The enormous difference between the FIL level of
developed and developing regions of the world calls
for the need to improve the FIL level of youth in devel-
oping countries, especially Pakistan. However, a sig-
nificant proportion of youth do not prepare themselves
to cope with financial challenges related to life expec-
tancy and unemployment (Ergu
¨n, 2018). As a result,
they feel reluctant while making any financial deci-
sions. The FIL level of every individual is affected
by various demographic and socioeconomic character-
istics, which vary among different categories of youth
(Volpe, Chen and Pavlicko, 1996).
Extant literature reveals that the majority of scho-
lars have fully focused on financial literacy and
gauged its behavioral aspects (Aydin and Selcuk,
2019; Grohmann, 2018; Te’eni-Harari, 2016) over-
looking financial knowledge in developing countries.
In Pakistan, limited empirical evidence related to
financial literacy is found (e.g., Ahmed, Kashif and
Ali, 2016; Ghaffar and Sharif, 2016). Sparse empiri-
cal evidence is found to gauge any differences in FIL
level based on various demographic and socio-
economic characteristics of students. Therefore, a
cross-sectional survey is needed to measure the
degree to which the FIL level of university students
is affected by various demographic and socio-
economic characteristics.
In response to the identified gap, this study aims to
broaden current knowledge of FIL by focusing on (a)
the extent to which university students are financially
literate, (b) examining any difference in their FIL level
based on demographic characteristics and socio-
economic characteristics. The rest of this paper is orga-
nized as follows: the next section looks at pertinent
literature, followed by research methods and data col-
lection. Then, results are discussed, leading to the con-
clusion, implications, limitations, and future directions.
Literature review and hypotheses
development
Remund (2010) operationalized the concept of finan-
cial literacy in five dimensions, including knowledge,
ability, aptitude, and skills needed to manage finance
377
Liaqat et al: Demographic and socio-economic differences in financial information literacy among university students

and make retirement plans. Lantara and Kartini
(2015) measured an individual’s level of financial
literacy in terms of knowledge, behavior, and attitude
towards financial products and services. Thus, finan-
cial knowledge, attitude, and behavior are three
aspects of financial literacy (Santini et al., 2019).
Among these, the knowledge and behavior of individ-
uals regarding financial products are crucial in asses-
sing the level of financial literacy. Financial
knowledge of an individual is assessed by asking
questions related to financial products and services
such as interest, loan, inflation, saving, tax and infla-
tion (Ergu
¨n, 2017), whereas the financial behavior of
individuals is measured by various dimensions such
as budgeting, saving, investing, and borrowing
(Remund, 2010). The majority of existing studies
have focused on the behavioral aspect of FIL, instead
of financial knowledge (e.g., Aydin and Selcuk, 2019;
Grohmann, 2018; Kiliyanni and Sivaraman, 2018).
Measuring the behavioral aspects of financial literacy
is sometimes problematic because respondents usu-
ally over-rate their financial competencies (Kiliyanni
and Sivaraman, 2018).
A plethora of literature on financial literacy reveals
that there are various demographic and socio-
economic factors which affect the financial literacy
of individuals, namely, age, level of education, gen-
der, the discipline of the study, work experience, resi-
dential status, and parental income (Kiliyanni and
Sivaraman, 2018; Potrich, Vieira and Kirch, 2018;
Santini et al., 2019). Various studies have been con-
ducted to gauge the variation in financial literacy by
gender (e.g., Almenberg and Dreber, 2015; Cup´ak
et al., 2018; Erner, Goedde-Menke, and Oberste,
2016; Kiliyanni and Sivaraman, 2018; Oseifuah, Gye-
kye, and Formadi, 2018). The findings of these studies
suggest that females are less knowledgeable regarding
financial literacy than their male counterparts (Driva,
Lu
¨hrmann, and Winter, 2016), because females have
less interest in the area of personal finance (Agarwal
et al., 2009). Males have to make financial decisions
more frequently, therefore they understand the finan-
cial concepts much better than females (Ansong and
Gyensare, 2012).
Some scholars have highlighted variation in the
financial literacy level of different age groups (e.g.,
Ansong and Gyensare, 2012; Farrar et al., 2019).
Their findings suggest that the financial literacy level
improves with age (Kiliyanni and Sivaraman, 2018),
and financial knowledge accumulates over time
(Agarwal et al., 2009). Students learn financial
knowledge from public and private sector universi-
ties. Therefore, it is crucial to gauge any difference
in the FIL level based on the sector of the university.
A study conducted by Cordero, Gil-Izquierdo, and
Pedraja-Chaparro (2020) has found that students
enrolled in private institutions and non-governmental
organizations (NGOs) have more financial knowledge
than others. The nexus between the level of education
(qualification) and financial literacy is found signifi-
cant and positive, as evidenced by existing literature
(e.g., Albeerdy and Gharleghi, 2015; Kiliyanni and
Sivaraman, 2018). A higher level of schooling leads
to a higher level of financial literacy (Ergu
¨n, 2018;
Lusardi and Mitchell, 2011), which implies that those
with less education are less likely to answer questions
correctly (Chen and Volpe, 1998).
Besides the level of education, their fields of study
also influence the financial literacy level of students.
Existing literature has confirmed that the students
from business and economics schools are more finan-
cially literate than others (Kiliyanni and Sivaraman,
2018; Lantara and Kartini, 2015); because they learn
various financial concepts in their courses (Chen and
Volpe, 1998). Additionally, the Cumulative Grade
Points Average (CGPA) also influences the financial
literacy level of university students. However, Nidar
and Bestari (2012) explored this relationship and
found no significant influence of CGPA on the FIL
level of students studying at the Padjadjaran Univer-
sity of Indonesia. The place of residence matters a lot
in determining the financial literacy level of students.
Extant literature reveals that students residing in hos-
tels are more literate than day scholars because they
face financial issues during hostel life (Ergu
¨n, 2018);
which make them more financially literate than day
scholars. The review of extant literature related to
demographic characteristics reveals inconclusive
findings due to the dearth of empirical evidences
related to FIL especially in the Pakistani context.
Therefore, the following hypothesis is proposed:
H1:There is no significant difference in the FIL
level of university students based on demographic
characteristics.
Besides demographic factors, the existing literature
covers various socio-economic characteristics,
including advice on financial matters, sources of
financial information, parental income, family invest-
ment in shares, having a bank account, and taking
finance courses. Financial advice from mother, father,
378 Information Development 37(3)

or friends influences the literacy level of students. A
study conducted by Ergu
¨n (2018) reveals that students
who follow the advice of their friends on financial
matters are found more literate than other students.
The latter followed the advice of their parents.
According to the family financial socialization theory,
financial literacy among youth is influenced by the
child’s family (Te’eni-Harari, 2016). Within a family,
parents remain the most important source of knowl-
edge about managing personal finances (Nidar and
Bestari, 2012). An individual can obtain financial
information from various sources, notably, newspa-
pers, books, social media sites, or university educa-
tion (Ergu
¨n, 2018). The findings of Ergun (2018)
suggest university education as a valid and reliable
source of financial information that influences the
literacy level of students. The family background of
students also has a crucial role in accessing their
financial literacy level. Higher parental income facil-
itates the students in achieving a higher level of finan-
cial literacy (Erner et al., 2016).
The FIL level of university students is also based
on the choice of taking a finance course. Students who
took a finance course are more knowledgeable than
others (Ergu
¨n, 2018). This is confirmed by Cordero,
Gil-Izquierdo, and Pedraja-Chaparro (2020), who
employed a difference-in-differences approach and
found that students who received a finance course are
more literate than others. Nidar and Bestari (2012)
suggested that Indonesian universities introduced
finance courses as a minor in all disciplines to
improve the financial knowledge of students. Based
on having a bank account, Nidar and Bestari (2012)
examined the difference in the financial literacy level
of students and found that students having a bank
account were more financially literate than others.
Family investment in shares is also an essential factor
affecting the financial literacy level of students. How-
ever, no empirical evidence is found to support this
relationship. A review of the pertinent literature
reveals inconclusive findings on various socio-
economic characterizes in developing countries.
Thus, the following hypothesis is postulated:
H2:Based on socio-economic characteristics.
there is no significant difference in FIL level of
university students
In the Pakistani context, two studies have been
found (e.g., Ahmed et al., 2016; Ghaffar and Sharif,
2016). Ghaffar and Sharif (2016) gauged the financial
behavior of individuals in Karachi. Another study
conducted by Ahmed et al. (2016) examined the
financial literacy of non-business students of Karachi
through the application of financial management in
their daily lives. A review of the limited empirical
evidence from Pakistan reveals that no study has been
conducted to test the financial knowledge of students
and its inter-relationship with various demographic
and socio-economic characteristics. Therefore, the
present study aims to broaden existing literature by
assessing the FIL level of non-commerce students
enrolled in various universities of Lahore.
Research methods and data collection
The population for this study was comprised of stu-
dents enrolled in various HEC recognized universities
of Pakistan. For selecting a sample, this study has fol-
lowed a multi-stage sampling design. Initially, this
study considered only those Pakistani universities
included in the list of QS Asia Ranking 2019
1
.Using
area sampling, only Lahore based universities were
chosen because it is the hub of major Pakistani univer-
sities. Then the sample was categorized into public and
private sector universities
2
. We sent consent letters to
the concerned authorities of universities to seek their
permission to collect data. Among those universities,
four universities from each sector who consented to
participate in this survey were chosen. Finally, data
was gathered only from conveniently available non-
commerce students. The rationale behind the exclusion
of commerce students is that they have enough finan-
cial knowledge because they go through courses
relatedtoaccountancyandfinance.
This study is conducted to examine various demo-
graphic and socio-economic characteristics and their
inter-relationship with the FIL level of university stu-
dents. The demographic characteristics include gen-
der, age, sector (either public or private), level and
discipline of study, and residence. The socio-
economic characteristics include information relating
to advice on financial matters, family’s investment in
shares, monthly income of parents, the possibility of
having a bank account, and finance course. Based on
item response theory, FIL has been operationalized by
the total score obtained by each student in the test
comprising multiple-choice questions (see also
Kiliyanni and Sivaraman, 2018).
To gather data, we developed an instrument based
on guidelines from the existing literature (e.g. Aydin
and Selcuk, 2019; Potrich, Vieira, and Mendes-Da-
Silva, 2016) and modified to suit the research needs
379
Liaqat et al: Demographic and socio-economic differences in financial information literacy among university students

in the context of Pakistan. Farrar et al. (2019) and
Lantara and Kartini (2015) have also developed local
scales based on their country’s context. To record the
FIL level of students, we carefully reviewed pertinent
literature and, in line with item response theory (Knoll
and Houts, 2012), initially generated 20 multiple
choice questions covering the areas of general finan-
cial and mathematical knowledge, banking, interest,
spending, time value of money, and risk-return rela-
tionship. Sections A and B of the instrument were
related to demographical and socio-economic charac-
teristics. After development of a questionnaire, we
launched a pilot study of 80 responses to testify the
functionality of the survey instrument. Then items
were modified and reduced to 15, as per the feedback
received from non-commerce students. The validity
of the instrument was also evaluated by experts hav-
ing knowledge of FIL (e.g., Chen and Volpe, 2002).
After modifying the questionnaire and satisfying
its validity, we distributed 400 self-administrated
questionnaires
3
among students, and 382 students
completed and returned the questionnaire
4
. The data
were analyzed by descriptive and inferential statisti-
cal techniques using SPSS 21 Software. Under
descriptive statistics, we have examined the charac-
teristics of the sample using frequency table and per-
centage of correct response technique (e.g., Ergun,
2017; Farrar et al., 2019; Kiliyanni and Sivaraman,
2018), to check the percentage of correct answers to
each of the questions asked. We have also character-
ized the percentage of correct responses in three cate-
gories, namely, low, medium, and high levels of FIL,
consistent with existing studies (Ergun, 2018; Sarigul,
2014). Under inferential statistics, we have compared
various groups based on FIL, in line with existing
literature (e.g., Shaari et al., 2013; Wright, 2016).
Table 1. Percentage of correct responses
Level of Financial Information Literacy
Question No. Subject of Questions
Low
Below 60%
Median
60%-79%
High
80% or Above
1 Sharing of ATM password 61.78
2 Usage of ATM 65.18
3 The safest place for keeping money 86.65
Mean Banking Knowledge 71.20
4 10 K in figure 89.01
5 Ratio 85.34
6 Economic activity 71.73
7 Amount of loan 89.53
8 Owner of rental property 54.71
Mean General Financial and Mathematical Knowledge 75.33
9 Wealth distribution 41.1
10 Money Illusion 71.47
11 Relationship between profits and inflation 64.92
Mean Time Value of Money 59.16
12 Compound interest 43.98
13 Topic to discuss with an investment advisor 56.28
14 Spending 65.18
15 Relationship between return and risk 45.29
Mean Knowledge regarding Interest, Investment,
Spending, and Risk-Return
52.68
Overall Mean Percentage 66.14
380 Information Development 37(3)

Results and discussion
Table 1 represents the percentage of correct
responses obtained from 382 students. The overall
mean rate of correct answers is 66.14%,which
represents a medium level of FIL, thus implies that
students from universities included in the sample
have a moderate level of overall financial knowl-
edge. The mean percentage of banking knowledge
is 71.20%, which represents an average level of
knowledge regarding banking products and ser-
vices. Sarigul (2014) also found moderate knowl-
edge about banking among 1099 students from
three universities in Kenya. The average percent-
age of general financial and mathematical knowl-
edge is 75.33%, which also demonstrates a
moderate level of knowledge; which is confirmed
by the study of Acheampong (2015), who gauged
the FIL level of 140 students enrolled in Christian
Service University College, Ghana.
The mean percentage of the time value of money
is 59.16%, which represents a low level of knowl-
edge, thus implies that non-commerce students have
little financial knowledge related to the time value of
money. This finding is consistent with Nidar and
Bestari (2012), who also observed low financial
knowledge of university students related to the time
value of money. Knowledge regarding various
finance areas like interest, investment, spending, and
risk-return relationship is 52.58%, which shows low
financial knowledge of non-commerce students.
This finding is also in agreement with the study of
Nidar and Bestari (2012). The overall statistics of
correct responses show that weak areas of non-
commerce students include the time value of money,
interest, investment, spending, and risk-return
relationship.
Table 2 represents the difference in the FIL level
of university students based on various demo-
graphic and socio-economic characteristics. Before
gauging the differences, this study tested the nor-
mality of FIL scores using one sample KS test and
found the non-normality of the data. Thus we
applied non-parametric tests to gauge the differ-
ences in the FIL level, such as Mann Whitney U
test (for two groups) and Kruskal Wallis Test (for
more than two groups).
There is a significant difference in gender based
on the level of FIL. The mean ranks of the male
students are significantly higher than their female
counterparts, which implies that males are more
financially literate than females, as confirmed by
existing literature (e.g., Garg and Singh, 2018; Gra-
mat¸ki, 2017; Shimizutani and Yamada, 2019). The
lower FIL levels of females are due to their less
eagerness, practical exposure, and readiness to learn
about finance (Chen and Volpe, 1998). This study
has also found a significant difference in the FIL
level based on age groups. The mean ranks of the
age group above 26 (represent 3.93%of the total
sample) are significantly higher than other age
groups (i.e.,18-22 and 23-26). This substantiates pre-
vious findings in the literature (e.g., Ansong and
Gyensare, 2012; Kiliyanni and Sivaraman, 2016).
The reason behind the higher FIL level of age group
above 26 is that knowledge accumulates over time
(Kiliyanni and Sivaraman, 2016).
Based on the sector (public or private university),
there is a significant difference in the FIL level of
university students. Mean ranks of private sector uni-
versities are higher than those of public sector uni-
versities, which is further confirmed by the study of
Cordero, Gil-Izquierdo, and Pedraja-Chaparro
(2020). This finding implies that, despite having lim-
ited resources, private universities in Pakistan are
better in providing practical exposure and financial
education to their students than public sector univer-
sities. Based on the level of education, this study has
found a significant difference in FIL. The mean
ranks of post-graduates are higher than undergradu-
ates, which confirms that higher qualifications are
associated with a higher level of FIL. The findings
are in agreement with existing literature (e.g., Sari-
gul, 2014).
Based on the field (discipline) of the study, the
findings suggest no difference in the FIL level of
university students, which is consistent with the
findings of Kiliyanni and Sivaraman (2018) and
Oseifuah et al. (2018). This finding implies that
financial education, in any discipline, may have little
influence on the practical lives of students (Kiliyanni
and Sivaraman, 2018). The difference in the FIL
level of students is also assessed based on their
CGPA. The findings reveal a significant difference
in mean ranks of students’ CGPAs, showing that
higher CGPA leads to a higher tendency of being
financially literate. However, this finding signifi-
cantly differs from the study of Nidar and Bestari
(2012). They found no difference in financial knowl-
edge based on CGPAs of university students in Indo-
nesia. Based on residential status, findings reveal a
significant difference in FIL of those students who
381
Liaqat et al: Demographic and socio-economic differences in financial information literacy among university students

reside in hostels, which is confirmed by Ergu
¨n
(2018). In light of the discussion above, H1is par-
tially rejected.
Based on financial advice taken by students,
findings show a significant difference in FIL. The
mean ranks of those students who follow the finan-
cial advice of other family members like elder
siblings and grandparents are higher than those of
others. However, this finding is contradictory with
Ergu
¨n (2018), who has gauged the FIL level of
university students belonging to eight European
countries. The contradicting outcome is due to dif-
ferences in the context of European countries from
Pakistan, where students live with their parents,
Table 2. Demographic and socio-economic differences in financial information literacy
Variable Chi-Square/Z Category Proportion Mean Ranks
Gender -2.204** Male 51.57 203.50
Female 48.43 178.72
Age 8.521** 18-22 73.30 182.96
23-26 22.77 208.29
Above 26 3.93 253.57
Sector -1.808* Public University 51.57 181.66
Private University 48.43 201.98
Level of Education -1.884* Undergrad 74.87 185.37
Postgrad 25.13 209.77
Field of the study 0.498 Natural Sciences 26.44 191.54
Arts And Humanities 23.30 186.28
Engineering 23.82 197.68
Social Sciences 26.44 190.50
CGPA 7.184* 2-2.5 9.16 180.89
2.51-3.0 21.20 167.03
3.01-3.50 42.67 194.72
3.51-4 26.96 209.26
Hostel -3.442*** Yes 34.03 218.42
No 65.97 177.61
Advice on Financial Matters 18.342*** Father 45.03 205.44
Mother 24.61 164.31
Friends 6.02 129.09
Other Family Members 8.38 213.81
Does not Follow 15.97 205.93
Source of Financial Information 5.961 TV 13.61 201.97
Newspapers 17.02 216.06
Books 3.40 187.96
Finance Sites 14.40 189.95
Social Media Apps 47.91 179.75
Government Publications 3.66 201.50
Parental Monthly Income (in PKR) 25.294*** Upto 30,000 15.49 176.80
30,001 To 60,000 21.78 151.73
60,001-90,000 24.15 183.17
Above 90,000 38.58 223.77
Finance Course -8.303*** Minor 33.20 257.59
Not Attended 66.80 158.58
Family Investment in Shares 0.315 Yes 25.13 200.78
No 74.87 187.75
Bank account -2.431** Yes 48.68 204.49
No 51.32 177.23
Note: ***, **, and * denotes significance at 1%, 5%, and 10% levels respectively.
382 Information Development 37(3)

sometimes in a joint family. Therefore, financial
advice taken from other family members and
fathers has a significant influence on the financial
knowledge of students.
The study has found no significant difference in
the FIL level based on the source(s) from which
students obtains financial information. The mean
ranks of newspapers, as a source of financial infor-
mation, are slightly higher than those of other
sources. Our findings are not consistent with those
of Ergu
¨n (2018), who found a higher FIL level of
those students obtaining financial information from
the university as compared to social media apps. A
significant majority of Pakistani students included in
the sample use social media as a source of financial
information.
There is a significant difference in the FIL level of
students based on parental monthly income, which is
consistent with Oseifuah et al. (2018). The mean
ranks of students whose parents have monthly
income above 90,000 rupees are significantly higher
than other groups. The higher level of parental
monthly income is positively associated with the FIL
of students. This study has found a significant dif-
ference in the FIL level of those students who have
taken a finance course as a minor, which is in agree-
ment with existing literature (e.g., Ergun, 2018).
Based on the possession of a bank account, there is
a significant difference in students’ FIL scores. The
mean ranks of students having bank accounts are
higher than those of other students who don’t have a
bank account, which is consistent with Nidar and Bes-
tari (2012). Based on family investment in shares, this
study has not found any difference in the FIL scores of
students. This may be because of less interest among
non-commerce students in matters related to invest-
ment in shares. To the researchers’ knowledge, this
aspect of socio-economic characteristics has not yet
been investigated, thus making it a novel element of
the study. As per the above discussion related to
socio-economic characteristics, H2is partially
rejected.
Conclusion, implications, limitations,
and future recommendations
Financial information literacy (FIL) is the degree to
which individuals are knowledgeable about financial
products and services, and they are better able to han-
dle their financial issues. The review of existing lit-
erature revealed limited empirical evidence of
attempts to gauge FIL in the context of Pakistan
(e.g., Ahmed et al., 2016; Ghaffar and Sharif, 2016).
However, these studies examined FIL in terms of
financial behavior instead of financial knowledge.
Therefore, in response to the identified gap, this
cross-sectional survey was conducted to explore the
role of FIL and its inter-relationships with demo-
graphic and socio-economic characteristics. We have
gathered data from 382 non-commerce students of
eight universities found in QS Asia ranking 2019. The
data collected have been analyzed by the mean per-
centage of a correct response analysis technique and
group comparisons.
To achieve the first objective regarding the
extent of the FIL level of university students, we
employed the mean percentage of correct response
technique. The findings reveal that university stu-
dents had a moderate level of financial knowledge
regarding banking, general finance, and mathe-
matics. However, regarding core financial concepts
like the time value of money, interest, investment,
spending, and risk-return relationship, they had low
levels of financial knowledge. The second underly-
ing objective was related to examining any differ-
ence in the FIL level of students based on
demographic and socio-economic characteristics.
The findings revealed that male students who had
graduated, were aged above 26, admitted to a pri-
vate university, residing in a hostel, and scoring
higher CGPA were more financially literate than
others. The study observed that those students who
followed the advice of other family members, took
finance courses as minor, had a bank account and
higher parental income were more knowledgeable
about finance than others.
The findings have important implications for var-
ious stakeholders like students, universities, and
society at large. Regarding students, our results high-
light that FIL plays a crucial role in their lives. A
higher level of financial knowledge not only helps
them in terms of controlling their unwanted
expenses, but also guides them in better decision
making, thus minimizing the risk of bankruptcy in
the future. To cope with an uncertain future, univer-
sity students should follow the advice of others on
financial matters. Our findings are also of crucial
importance for policymakers. They suggest that uni-
versities should introduce finance courses regardless
of the discipline, covering the areas of basic and core
financial concepts.
383
Liaqat et al: Demographic and socio-economic differences in financial information literacy among university students

Universities should also develop a mechanism (like
a test) to regularly assess the financial understanding
of their students and arrange seminars, workshops,
andtrainingsessionstoimpartupdatedfinancial
knowledge. Such extracurricular activities should aim
at enhancing the financial knowledge of university
students, which ultimately helps them in making bet-
ter financial decisions. The State Bank of Pakistan
should also play a role by conducting awareness ses-
sions on FIL at the university level.
Despite best efforts, we observed certain deficien-
cies, including a small sample size as the data have
been collected from 382 students from eight univer-
sities. Therefore, the findings may only not be gener-
alizable to other universities of Pakistan. It is
recommended to potential scholars to enlarge the
sample size covering all HEC recognized universities.
Moreover, FIL has been measured using only 15 mul-
tiple choice questions; future researches should fur-
ther refine and enlarge the items of the questionnaire.
Another limitation is related to FIL, as we have oper-
ationalized it in terms of financial knowledge, thus
ignored other associated aspects such as perceived
financial behavior and attitude. Potential scholars can
examine the nexus between financial knowledge and
financial attitude through the interactive role of finan-
cial behavior. This study is confined to demographic
and socio-economic factors; potential researchers are
recommended to consider other factors like cognitive
ability, financial socialization, and their inter-
relationship with FIL. Finally, this study has covered
only one aspect of FIL, i.e., financial knowledge;
potential scholars may consider other elements like
credit card literacy, mobile literacy, Islamic finance
literacy, and microfinance literacy.
ORCID iD
Faiza Liaqat https://orcid.org/0000-0002-9555-0800
Notes
1. See list of universities at https://www.topuniversities.
com/university-rankings/asian-university-rankings/
2019
2. See distribution of sample from Appendix B.
3. See Appendix A for complete questionnaire.
4. We discarded 18 responses which were found
incomplete.
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About the authors
Faiza Liaqat is a PhD scholar at Hailey College of
Commerce, University of the Punjab, Lahore. Her areas
of interest includes: financial information literacy, micro-
finance literacy, intellectual capital and performance eva-
luation. Email: faiza_mp1601@hcc.edu.pk
Khalid Mahmood is a professor of Information Manage-
ment and Dean, Faculty of Economics and Management
Sciences at the University of the Punjab. He did post-
doctoral research at the University of California, Loss
Angeles, USA. He has more than 160 publications in his
credit. He has supervised many Doctoral, MPhil and Master
theses. He has worked for many research journals as editor,
reviewer and editorial board member. He has conducted
many training programs for librarians and faculty of higher
education institutions. His research interests include: infor-
mation literacy, digital libraries, library funding and library
services. Email: khalid.im@pu.edu.pk
Fouzia Hadi Ali is currently working as an assistant
professor at Hailey College of Commerce, University
of the Punjab, Lahore, Pakistan. She holds her PhD from
University of the Punjab, Pakistan. She is a gold med-
alist in Master of Commerce from the same institute.
She has published more than 16 papers along with paper
presentations at international conferences. Her research
interests include: behavioral intentions among employ-
ees, customers and students, organization commitment
and perceived organizational support. Email: fozia.
hcc@pu.edu.pk
386 Information Development 37(3)

Appendix A
Questionnaire
Dear Participant, this questionnaire is designed to assess the relationship between demographical character-
istics and financial literacy of university students. All responses are kept confidential.
Many Thanks for your participation.
Section A: Demographic Information
1. Gender:
a) Male b) Female
2. Age:
a) 18-22 b) 23 to 26 c) Above 26
3. Sector:
a) Public University b) Private University
4. Program of the study:
a) Undergraduate b) Post Graduate
5. Department _____________________________
6. CGPA ____________
7. Reside in hostel:
a) Yes b) No
Section B: Socio-Economic Information
8. Mostly follow advice on financial matters:
a) Father b) Mother c) Friends d) Other family members e) Does not follow
9. Major source of financial information:
a) TV b) Newspapers c) Books d) Finance sites e) Social Media apps f) Government
publication
10. Parental monthly income:
a) Upto 30,000 b) 30,001 to 60,000 c) 60,001 to 90,000 d) Above 90,000
11. Family’s investment in Shares:
a) Yes b) No
12. Do you have a bank account:
a) Yes b) No
13. Attended Finance Course as:
a) Major b) Minor c) Not attended
Section C: Financial Information Literacy
1. ATM password should be shared only with:
a) Spouse/husband b) Obedient son/daughter c) Friend d) None of them
2. ATM can be used for:
a) Cash withdrawal b) Amount enquiry c) Statement of account d) All of them
3. Safest place for keeping money:
a) A put dug in the ground b) Iron box c) Bank d) Money lender
4. 10 K means
a) 100 b) 1000 c) 10,000 d) 100,000
5. Imagine that five brothers are given a gift of Rs.1000. If the brothers have to share the money equally
how much does each one get?
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Liaqat et al: Demographic and socio-economic differences in financial information literacy among university students

a) Rs. 100 b) Rs. 200 c) Rs. 300 d) Rs. 400
6. Ali gets up, dresses, brushes his teeth, eat breakfast, goes to college, buys gum at the school store and
reports to his first class. Which of these would be considered as an economic activity?
a) Brushing teeth b) Eating breakfast c) Buying gum d) Going to class
7. If you have amount of loan, is it good?
a) True b) False
8. In regard to rental property, the person who owns and rents the property is known as:
a) Landlord b) Investor c) Broker d) Tenant
9. Assume Osama inherits Rs. 100,000 today and his sibling will inherit Rs 100,000 but after 3 years from
now. Who is richer today because of the inheritance?
a) Osama b) His sibling c) Both are
10. Suppose in year 2020, your income has doubled and prices of all goods have doubled too. In 2020,
will you be able to buy more, the same or less than today with your income?
a) Buy more than today b) Buy the same as today c) Buy less than today
11. Imagine that the rate of profit on your savings account was 1%per year and inflation was 3%per year.
After one year, would you be able to buy more, the same or less than today with the money in
account?
a) Buy more than today b) Buy less than today c) Buy the same as today
12. Suppose you put money in the bank for two years and bank agrees to add 15%per year to your
account. Will the bank add more money to your account in the second year than it did in the first year,
or will it add the same amount of money both years (assuming compound interest)?
a) More b) The same c) The less
13. Which of the following is an important topic to discuss with a potential investment advisor?
a) Marital status b) Hometown c) Educational expenditures d) Personal wealth
equally rich
14. Which of the following is not usually associated with spending?
a) Debit card b) credit card c) savings account d) cash
15. An investment with high return is likely to be high risk.
a) True b) False c) Don’t know
Appendix B
Distribution of Sample
University Sample Distribution Responses Received
Lahore University of Management Sciences (LUMS) 50 48
University of Central Punjab (UCP) 50 46
University of Management and Technology (UMT) 50 49
University of Lahore (UOL) 50 43
COMSATS Institute of IT (COMSATS) 50 49
Lahore College for Women University (LCWU) 50 50
Government College University (GCU) 50 47
Punjab University (PU) 50 50
Total 400 382
388 Information Development 37(3)