Socio-Demographics Determinants of Financial Literacy: Evidence from Sivagangai District

Abstract

Financial literacy represents a critical determinant of economic well-being and community development, particularly in developing economies where financial inclusion remains a policy priority. This study employs a mixed-methods approach to examine financial literacy disparities between rural and urban populations in Sivagangai district, Tamil Nadu, through behavioral economics and social learning theory frameworks. Data was collected from 200 strategically selected respondents (100 rural, 100 urban) using structured surveys and semi-structured interviews. The research reveals substantial literacy gaps: urban respondents demonstrated 92% bank account awareness compared to 78% rural, with digital banking usage showing the widest disparity (88% urban vs. 39% rural). Key barriers identified include inadequate formal education (rural mean: 4.42), low digital literacy (4.50), and cultural constraints (3.98). Post-intervention analysis confirmed the effectiveness of targeted awareness programs, with both groups showing significant improvement (p < 0.001). The study con-contributes to financial inclusion literature by demonstrating how socioeconomic stratification intersects with geographic location to create com-compounding literacy disadvantages. Theoretical implications extend behavioral economics research by showing how information asymmetries and cognitive biases differently affect rural versus urban financial decision-making. Policy recommendations include curriculum integration, vernacular content development, and community-based peer education programs tailored to local contexts.