DISSERTATION’21

“A STUDY ON FINANCIAL LITERACY AMONG

RETAIL INVESTOR IN SURAT CITY”

-KASHISH YADAV
-17BCO053
 INTRODUCTION ON FINANCIAL LITERACY

- Financial Literacy is the ability to understand basic financial concepts

and the possession of knowledge and skills required to make informed and
effective financial planning, decisions using the available financial
resources.
- It is about knowing how to generate, spend, invest and save money.

- It is the ability to manage your finances well by making the optimum use
of the available financial products and resources to give you maximum
benefit.
 INTRODUCTION ON RETAIL INVESTORS

- Retail Investor is an individual investor that invests in stock markets by purchasing

shares of a company or invests in mutual funds, exchange-traded funds, etc. that is
facilitated by some broker.
- Such investor invests relatively small amounts as compared to institutional investors like
hedge funds, insurance companies, endowment funds, etc.

- The retail investor has three basic expectations from the market regarding
investment-
a) Return of Capital,
b) Return on Capital, and
c) Liquidity.
LITERATURE REVIEW
SR. NO TITLE OF AUTHOR NAME MAIN RESEARCH FINDINGS
PAPER AND PUBLISHED OBJECTIVES DESIGN AND
YEAR METHOD

1. Financial Literacy: (Noor Azizah To know the Study incorporate The study reveals that the
A Study among the Shaari, JUNE 2013) financial literacy use of primary data financial literacy level of
University Students among university by questionnaires University students is
students. and the sample moderate as 65.7% of the
consisted of 384 student scored 5-8 marks
students. out of the 12 questions.
By using
convenience random
sampling method

2. Review on the (Kandasamy, The study was to The study was based The researcher
Recent Measures of December 2017) measures of financial on the secondary data concluded that the
Financial inclusion in India. collected from past government should
Inclusion. research papers, RBI plan various schemes
websites including and fund to MSME
reports, Government sector to uplift them
announcement and that provide numerous
official websites, SBI jobs/employment to
reports, Magazines improve income of
and journals. people.
SR. TITLE OF AUTHOR MAIN RESEARCH FINDINGS
NO PAPER NAME AND OBJECTIVES DESIGN AND
PUBLISHED METHOD
YEAR
3. A Study on level (Roy & Jain, May To examine the Primary data was By the results from the
of Financial 2018) level of working collected for the
Literacy among women in Jaipur in purpose of study analysis have revealed that
Indian Women. basic banking from Working the working women of
knowledge & Women of Jaipur Jaipur including those living
fundamentals of City with sample
in urban areas are not aware
financial concept. size of 150
respondents of different financial
through structured concept and many of them
questionnaire.
do not consider it important.
So it is essential required
that the companies should
bring out various awareness
financial service programs
so that it can escalate capital
formation in the country by
providing them a education.
RESEARCH METHODOLOGY
 OBJECTIVES OF THE STUDY

o To study the association of socio-economic variables with financial

literacy.
o To study how financial literacy level of retail investors affect their
awareness regarding financial products.
o To study about the factors affecting the investment decisions.
 RESEARCH DESIGN

o This study is based on descriptive research design as it tends to

find out the financial literacy among the retail investors.

 DATA SOURCE

o This study is based on primary data.

o Primary data is collected using structured questionnaire including close
handed questions seeking response from retail investors (online and
offline) which help identifying major aspects of financing literacy of retail
investors.
 SAMPLE SIZE

o For the purpose of the study, total 100 respondents are taken from Surat
City.

 SAMPLING METHOD

o For collecting the response from retail investor’s convenience sampling

method which is a classification of non- probability sampling method is
used.
 SCOPE OF THE STUDY

o This study describes the behaviour and attitude characteristics of the retail
investors.

o The study can find the factors considered by investors while investing their
own funds.

o The study describes how investors gain the financial knowledge for the
investment purpose.

o The investors can be categorised in terms of their characteristics.

 LIMITATIONS OF THE STUDY

o Only questionnaire method was used to measure the financial literacy

among the retail investors.

o Lack of knowledge of retail investors about the financial products can be

major limitation.

o Area of study was restricted to Surat City only.

 DATA ANALYSIS AND INTERPRETATION
 Demographic Profile of The Sample Investors:
DEMOGRAPHI NO. OF PERCENTAGE DEMOGRAPHI NO. OF PERCENTAGE
C VARIABLES INVESTORS C VARIABLES INVESTORS

OCCUPATION
GENDER Salaried 42 42.0
Female 45 45.0 Business 21 21.0
Male 55 55.0 Retired 3 3.0
Professional 10 10.0
Housewife 9 9.0
AGE Student 15 15.0
18-28 48 48.0
29-38 25 25.0 ANNUAL
39-48 16 16.0 INCOME
Below 250000 48 48.0
49-58 8 8.0
250001-500000 34 34.0
Above 58 3 3.0
500001-750000 16 16.0
Above 750000 2 2.0

MARITAL
EDUCATION/
STATUS
QUALIFICATIO
Married 50 50.0
N 15 15.0
Unmarried 50 50.0
School Education 65 65.0
College Education 20 20.0
Professional TOTAL 100 100%
 INTERPRETATION

 GENDER

The above table depicts that around 55 (55%) of the investors in the sample
population are men and rest 45 (45%) are females. As generally we have seen that
in Indian society male bear the financial responsibility and therefore make
investment decisions too, to fulfill the financial obligation.
 AGE

When it comes to age, majority was young investors 48 (48%) investors were in
the age group of 18-28, 25 (25%) investors in the age group of 29-38, 16 (16%)
investors in the age group of 39-48, 8 (8.0%) of them are in the age group 49-58.
And the rest 3 (3.0%) was above the age of 58. No investor below 18 years of age
was considered for the purpose of the study.
 EDUCATION

In the sample population 15(15%) of investors qualifies with school education,

65(65%) investors qualification was college education. Rest 20(20%) of the
investors had studied professional courses. It is interesting to note that most of the
investors covered in the study can be said to possess higher education.
 OCCUPATION
Moving on to occupation 42(42%) of the investors belonged to salaried class,
21(21%) from business class, 3(3.0%) from retirement category, 10(10%) of them
were professionals, 9 (9.0%) of the sample population were housewives and
15(15%) were from students category.

 ANNUAL INCOME
When it came to Income 48(48%) of investors in the sample population was
earning less than 250000 per annum. 34(34%) investors was a earning between
250001 to 500000, 16(16%) investors was earning between 500001-750000. Rest
2(2.0%) investors was earning above 750000. It was found that irrespective of the
annual income individuals on all of them were interested in investment since
today the inflated cost forces people to save and invest it effectively to manage
future expenses.

 MARITAL STATUS
Proceeding towards marital status 50 (50%) of the investors in the sample
population are married and rest 50 (50%) of them are unmarried. As we have seen
that finance plays a dynamic role in everyone’s one life whether single or married
everyone wants to be financially independent and secure his/her future with
enough funds to be sustainable, ethical and responsible.
 Aware About Difference between Saving and Investment?

AWARENESS NO. OF PERCENTAGE

INVESTORS Do you aware
about difference
Yes 100 100% between Saving
and Investment ?
No 0 0%
Yes
TOTAL 100 100% Do you aware
about difference
between Saving
and Investment ?
No
INTERPRETATION

o The above table and chart express that around 100 (100%) of the investors
are of the opinion that there are aware about the difference between saving
and investment and none of the respondents are who do not aware about
difference between saving and investment.
o From the data we can say that majority of the respondents are much aware
about saving and investment, as these two concepts are used as
interchangeably, but there is a difference- to save for an emergencies
(saving) and to buy assets for making money (investment).
 MANN-WHITNEY AND CROSS TABULATION
TEST

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 FINDINGS

o From the result it is also find that majority of the investors are
highly aware about the difference between the saving and
investment with 100%.
o It is found that the 18-28, and 29-38 group people are mostly aware
about the most of the financial products.
o Most of the investor’s behavior was influenced by friends and
family followed by consults of making investment.
o Out of total responses; it has been observed that above the 58 age
like to prefer the bank fixed deposit and life insurance products.
o The study revealed that lack of education restricts the people to
know more about the different financial products and get the
advantage of returns.
 FINDINGS

o There is no relation between gender and financial knowledge, attitude,

factors affect financial literacy. There is relation of gender on before I buy
something I carefully consider whether I can afford it (Financial Behavior).

o Age was found impacting financial behavior for I pay my bills on time.

o There is a significance relation of qualification on Interest paid on loan

(Financial Attitude) and Before I buy something I carefully consider
whether I can afford it (Financial Behavior).

o Occupation is found impacting the factors affecting the Financial Literacy

for Tax Exposure and Saving & Investment.
 CONCLUSION
o From the above findings of the study it is concluded that in this modern
era, financial literacy is the most significant factor to be consider for
managing the finance. Results show that investors in high financial
literacy group have higher awareness level for all financial products
except for public provident fund and debenture/bond. Also respondents
having low financial literacy primarily invest in traditional and safe
financial products and do not invest much in those financial products
which are comparatively more risky and can give fewer returns.
o Thus it can be said that financial literacy level affects awareness
regarding financial products as well as in-vestment preferences towards
financial products. This clearly implies that due to low level of
financial literacy, individuals invest their money in traditional financial
products and are not able to take advantage of new age financial
products which can offer them higher returns.
 REFERENCES

o Noor Azizah Shaari, N. A. (June 2013). Financial Literacy: A Study

Among The University Students. Interdisciplinary Journal Of
Contemporary Research In Business , 279- 299.
o Kandasamy, K. (December 2017). Review on the Recent Measures of
Financial Inclusion. International Journal of Management & Business
Studies  , 17-19.
o Roy, B., & Jain, D. R. (May 2018). A Study on level of Financial Literacy
among Indian Women. Journal of Business and Management , 19-24.
o Singhal, M., & Singh, A. (January 2020). Factors Contributing to the
Financial Literacy of Individual: A Critical Literature Review. international
journal , 1-12.
 QUESTIONNAIRE

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