Determinants of Financial Literacy and Its Effects on the Financial Behaviour of Undergraduates in a Nigerian University

Abstract

Extant studies have looked at financial literacy (FL) and its drivers on one hand as well as the effects of FL on diverse aspects of the financial behaviour of individuals, corporations and other agents that interface with financial decision making on the other hand. This paper however centres investigation on Nigeria (a country predominated by young people) and a unique segment of the youth population namely University students. It particularly centered on the gender differences in FL and assessing its influence on students’ choice of investment instrument in the University of Ibadan. The survey instrument adopted was a semi-structured questionnaire and 300 copies of it were administered to students across faculties. The results were obtained using descriptive statistics, simple percentages and logistic regression analysis. These empirical results showed that gender, faculty, level of study, and work experience are positive determinants of FL. However, student status (whether full-time student, working student or self-employed), father’s educational attainment, mother’s educational attainment and family’s average monthly income were not statistically significant drivers of FL. Also, on average, FL influenced the attitudes of undergraduates to financial investment decision making. Overall, undergraduates still exhibited low FL levels. There is therefore a need for key stakeholders in the financial system to prioritise programmes and interventions targeted at university students.