An Analysis of Financial Knowledge of the Students in the Faculty of Social Sciences and the Faculty of Arts of the State Universities in Sri Lanka

Abstract

Financial literacy is a significant factor affecting the country's financial well-being and financial stability. The financial literacy rate is lower in Sri Lanka than the print literacy rate. Financial knowledge has an important relationship with the other two main branches of financial literacy: financial attitudes and financial behaviour. This study analyzed the level of financial knowledge and the main factors that enhance university students' financial knowledge. Primary data are collected from 464 university students in five state universities in Sri Lanka. The sample consisted of fourth-year students of the Faculty of Arts and the Faculty of Social Sciences. The Probit model was used to identify the main factors affecting financial knowledge. The financial knowledge of each student was measured by asking three standard questions that measure the knowledge of basic financial concepts. According to the results, the financial knowledge of university students is low. The study revealed that the financial knowledge of female students is low compared to male students. The results indicated that finance-related subjects such as Economics, Mathematics, and Finance positively impact financial knowledge. Extra readings and other professional courses related to finance also have a positive impact on financial knowledge. Therefore, it can be recommended to make some national-level strategies to enhance the financial knowledge of the young generation by adding subjects related to basic financial concepts to the university and school curricula