Logistic Analysis on Financial Literacy and Its Determinants: An Empirical Evidence from Maichew Town of Tigray, Ethiopia

Abstract

Financial literacy is increasingly recognized as a crucial factor for individual and societal well-being. This study investigates the determinants of financial literacy within a unique financial and economic context, focusing on civil servants in Maichew Town, Tigray. A mixed-methods approach was employed, combining quantitative and qualitative data collected through a self-administered questionnaire distributed to a random sample of 271 civil servants. The study employed a binary logistic regression model to examine the relationship between financial literacy, measured as a binary outcome, and a range of socio-demographic and economic variables. These variables included age, gender, income level, work experience, marital status, field of study, access to financial news, and the number of dependents in the household. The findings reveal that gender, field of study, access to financial news, and the presence of dependents significantly influence the financial literacy levels of the respondents. Notably, female civil servants, those with a background in fields related to finance and economics, individuals with access to financial news, and those with dependents demonstrated higher levels of financial literacy. Conversely, age, work experience, marital status, education level, and income level did not exhibit a statistically significant relationship with financial literacy. This study contributes valuable insights into the factors shaping financial literacy among civil servants in a specific Ethiopian context. The findings underscore the importance of targeted interventions and financial education programs that address the unique needs of different demographic groups, particularly women and those in professions not directly related to finance. By enhancing financial literacy, policymakers and educators can empower individuals to make informed financial decisions, ultimately fostering greater economic stability and well-being.