Title:
ASSESSMENT OF LEVEL OF FINANCIAL LITERACY AMONG THE COLLEGE STUDENTS IN BHUTAN

Authors:
Harilal Bhattarai and Gagan Mongar

Abstract:
This study on the assessment of level of financial literacy among the college students in Bhutan was conducted taking a sample of 1,085 students from across several colleges in Bhutan offering bachelor’s degree programs. The students from different degree programs broadly categorized here as management students and non-management students took part in the survey. There were 584 (54%) management students and 501(46%) students enrolled in other degree programs. The overall financial literacy index was built using the composite mean of the three dimensions; financial behaviour, financial attitude and financial knowledge. The overall financial literacy index is 2.1. This shows that the level of financial literacy among college students in Bhutan is low. Student’s score on financial numeracy was even lower (1.8). Majority of the students reported that they learnt about managing money mostly from friends (25.6%), school (21.8%), books (21.4%), internet (20.8%) and least from life experience (4.4%) and parents (4.8%). It could also be true that parents mandate their child to concentrate on study and not to be bothered by the financial matters of the family. It also notes that children are hardly involved in family financial decisions. Recording and review of the everyday financial transaction is given least importance. Majority of the students (57.8%) reported that they don’t keep record of their financial transactions. About 38% maintain minimal record. Only 3.8% of respondents reported they keep detailed record of their everyday financial transactions. Record keeping is also the least (9.6%) things they learn from home while growing up. In regard to spending behaviour, only 8.2% reported that they are very economical in terms of their spending, while 36.0% reported that they are somewhat economical and majority (55.8%) are spendthrift. Contrast to the findings of Santini, Laderia, Mette and Ponchio (Santini, F.D.O., Ladeira, W.J., Mette, F.M.B. and Ponchio, M.C., 2019) no significant variations on the financial behavior between the gender and course they are enrolled in. In terms of financial numeracy, management students seem to be better than the non-management students t (1075) =9.305, p<0.05 Students have fair understanding on banking and interest rates in Bhutan (3.5) but least aware of the insurance, its importance and risk diversification (2.9).

Keywords:
financial literacy, college students, colleges in Bhutan, financial knowledge, financial behavior, financial attitudes.