Socio-economic factors influencing financial literacy among university students in Uganda. a case study of Makerere University year three students School of Statistics

Abstract

The overall focus of this study was to analyze the Socio-economic factors influencing financial literacy among university students in Uganda. With the growing number of students’ enrollment, many developing universities in Uganda bring about an increment in the quantity of scholars but devoid of financial literacy but also creating a larger number of dependencies. Students know about saving, borrowing, investing, insurance or managing money? To promote economic growth in Uganda, this is a critical question that needs to be answered comprehensively, hence, the need for a financial literacy study. The study was mainly based on four specific objectives which were; to examine students understanding of and knowledge in money management, savings and borrowing, investment and insurance, to examine the relationship between family characteristics and financial literacy among university students in Uganda, to ascertain the relationship between financial training and financial literacy among university students in Uganda and to investigate the relationship between Personal income and financial literacy among university students in Uganda. This study was based in Makerere University which considered departments of school of statistics and planning in the University where primary data was collected from the students. This study targeted third year students of Makerere University admitted during the 2018/2019 academic year as the time scope and was limited by the inability to cover all universities in Uganda. The study applied a random sampling procedure to obtain the respondents for questionnaires and the Quantitative method was used to determine the sample size for the population of the study proportion. The analysis between family characteristics and financial literacy revealed that Parents’ Employment, Parents opening up any financial plan, financial discussion and Encouragement to save/invest have an effect on financial literacy. Chi square analysis between personal characteristics, financial training and financial literacy also reveals that gender of students, course of the student, and source of income have an effect on financial literacy because their P-values are less than the significance level of 0.05, we reject the null hypothesis of no relationship between financial literacy and the mentioned personal characteristics The study findings support findings from other scholars concerning parents’ education and employment status that revealed a statistically significant relationship between the two characteristics and financial literacy. Therefore, there is a statistically significant relationship between financial literacy and the following factors Parents’ Employment, Parents opening up any financial plan among others and financial literacy highly depends on both family and personal characteristics thus the thought of incorporating financial literacy as a subject and course unit in all institutions of learning nationwide.