Measurement and Determinants of Financial Awareness of Microfinance Clients

Abstract

 The promotion of financial education for poor people in 
developing countries calls for work on several fronts; one of which is 
to develop a measure to evaluate the outcome of financial 
education in relation to broader development goals. This paper 
uses Microfinance Clients' Awareness Index (MCAI) to determine 
the level of financial awareness of microfinance clients. This index 
is a comprehensive measure that incorporates information on 
several aspects of financial awareness in one single number lying 
between 1 and 2, where 1 denotes complete ignorance and 2 
indicates complete financial awareness of the microfinance 
product. Also, the factors that were associated with some degree of 
significance to MCAI were attempted to be identified Among 
different socio-economic variables, age group and highest 
education  found to be t associated with the MCAI scores.