A STUDY ON FINANCIAL LITERACY AND AWARENESS ABOUT INVESTMENT OPTIONS AMONGST LOW-INCOME GROUP IN THE WESTERN SUBURBS OF MUMBAI

1. A STUDY ON FINANCIAL LITERACY AND AWARENESS
ABOUT INVESTMENT OPTIONS AMONGST LOW
INCOME GROUP IN THE WESTERN SUBURBS OF
MUMBAI
Submitted by:
Ankit Kumar Nemani.
Ayush Gupta.

2. INTRODUCTION
Financial literacy is the ability to understand how money works in the world. It includes the
knowledge of making appropriate decisions about personal finance such as investing,
insurance, real estate, budgeting, retirement and tax planning .
 Who all belongs to EWS or LIG?
This are the people who fall in the threshold limit of some income.
EWS = Household income Up to 100,000.
LIG = Household income of 100,001 – 200,000.
Areas covered
Western Suburbs includes area from Bandra to Dahisar.
Research Motive
The main purpose behind the study is to provide evidence of personal financial literacy
among lower income group of Western Suburbs of Mumbai
What is Financial Literacy ?

3. REVIEW OF LITERATURE
Saurabh Kumar (2013) in an essay specified that India with 59 index points is at
the bottom among 16 countries in the Asia-pacific region.
 It was found that the old age group people of 60, had more financial knowledge as
compared to youth of 30
Gallup (an American research-based, global performance-management consulting
company) (2014) found that 76% of the adult population do not have an adequate
financial knowledge.
 Individuals were tested on the basis of few questions relating to: risk
diversification, savings, debt, inflation, compound interest, numeracy.
Parul Agarwal (2015) also explained that the need of financial literacy has been
acknowledged by different groups of people like the stakeholders, governments,
associates.
 She says that each stage of a household needs to take different financial decisions

4. RESEARCH METHODOLOGY
Objectives:
 To know the appropriate decision making ability of an individual.
 To know the financial planning amongst the lower income group.
 To know the savings to expense ratio.
 To know the awareness amongst them for various financial instruments
 To know the risk bearing capacity of an individual.

5. RESEARCH DESIGN
Nature of study:
 This study uses a comprehensive questionnaire designed to cover major aspects of personal
finance. It includes financial literacy on general knowledge, savings and borrowing, and
investments.
Scope of study:
 The scope of study was to find the financial literacy amongst the lower income group of
Western Suburbs of Mumbai consisting of slums.
Collection of data and sample size:
 The study combines the primary data, collected through on-ground questioning. The
participants consist of lower income group people such as auto-drivers, servants,
conductors, security guards etc.
Hypothesis: Null Hypothesis (H0): Low income group people lack financial literacy.
Alternate Hypothesis (H1): Low income group are financially literate.

6. ANALYSIS
10%
70%
20%
MONTHLY HOUSEHOLD INCOME
<10k 10k- 20k 20k<
52%
42%
6%
EDUCATIONAL QUALIFICATIONS
S.S.C H.S.C Graduate
Diagram 1.1 Diagram 1.2

7. 15%
85%
INVESTMENT OTHER THEN IN BANK ACCOUNT
Yes No
18%
0%
9%
73%
IFYES, THEN WHICH
NSC KVP BOND Other
Diagram 2.1 Diagram 2.2

8. LOW
90%
MEDIUM
10%
HIGH
0%
RISK APPETITE
Diagram 3

9. FINDINGS
The null hypothesis (H0) will be accepted and alternate hypothesis (H1) will be rejected
as all as the people with low income are not financially literate and they don’t know
about various other investment option.
 The major finding was that the people with low income are unable to save money
because in city like Mumbai the cost of living is very high.
 The lower income group on and average works for more than 8 hours a day.
 Very few people are aware of the government schemes which are provided by the
government for the benefit of the backward class.
 Lower income group of people migrate from rural areas to urban area for the better
prospect.

10. RECOMMENDATIONS
 a. Conducting various awareness program for making people aware of various
investment options specifically for lower income group.
 b. Conducting special classes on weekends for the lower income group will be
more benefitted.
 c. Some extra returns should be provided to lower income group for investing in
some specific instrument.
 d. The basic of the financials should be mandatory to teach in the primary or
secondary school.
 e. Government should Setup kiosk in the rural areas which will provide
information related to financial instrument and various other investment options.

11. CONCLUSION

12. REFERENCES
 http://www.livemint.com/Money/2l9bZsVo7eempRU9yLvPAL/SP-survey-More-
than-70-Indians-fare-badly-in-financial-li.html
 http://www.livemint.com/Money/FKCInDmM8VblAc2TPd1jKL/Financial-
literacy-in-India-very-low-says-survey.html
 http://services.indg.in/financial-literacy/english/financial-products-for-rural-
people/savings-term-deposits-and-loan-products-for-rural-people-en.pdf

13. ANNEXURE