Research on the Determinants of Financial Literacy and Its Effects on Financial Inclusion: The Cambodian Case and International Comparison Analysis

Research Project

Project/Area Number	22K01474
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Multi-year Fund
Section	一般
Review Section	Basic Section 07040:Economic policy-related
Research Institution	Saitama University
Principal Investigator	サムレトソワンルン埼玉大学, 人文社会科学研究科, 准教授 (90614371)
Project Period (FY)	2022-04-01 – 2026-03-31
Project Status	Granted (Fiscal Year 2022)
Budget Amount *help	¥4,030,000 (Direct Cost: ¥3,100,000、Indirect Cost: ¥930,000) Fiscal Year 2025: ¥780,000 (Direct Cost: ¥600,000、Indirect Cost: ¥180,000) Fiscal Year 2024: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000) Fiscal Year 2023: ¥1,300,000 (Direct Cost: ¥1,000,000、Indirect Cost: ¥300,000) Fiscal Year 2022: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000)
Keywords	Financial literacy / Social capital / Microfinance / Financial inclusion
Outline of Research at the Start	Financial literacy plays an important role in enhancing the benefits of financial inclusion in a country. It has attracted significant research attention. However, previous studies on the Cambodian case have various limitations. The current research examines the determinants and the impacts of financial literacy in Cambodia in a more comprehensive manner by considering both household characteristics and financial institutions’ role. An international comparison analysis will be also considered, within the scope of data and information availability.
Outline of Annual Research Achievements	The aim of this research is to enhance our understanding of financial literacy in Cambodia and other countries. A comprehensive understanding of financial literacy amongst financial borrowers is crucial for informing relevant policy decisions. During FY2022, we explored the factors influencing financial literacy within Cambodia’s financial sector, with a particular focus on household characteristics and the role of financial institutions. We considered various household attributes such as education, income, age, occupation, their social capital (social networks within communities), and their experiences of financial transactions with formal financial institutions, among others. Utilizing data and information from a household survey in Cambodia, our study confirmed a positive correlation between years of general education and financial literacy, a relationship between lower-income households and lower financial literacy, and an association between higher social capital and increased financial literacy. Furthermore, our analysis revealed that households with more frequent experiences of financial transactions with formal financial institutions possess higher levels of financial literacy. To share our findings with other researchers, we presented our research at an online seminar hosted by the JICA Ogata Research Institute on October 4, 2022, and at the Annual Microfinance Conference in Cambodia on October 28, 2022. The latter presentation was conducted in-person.
Current Status of Research Progress	Current Status of Research Progress 2: Research has progressed on the whole more than it was originally planned. Reason In FY2022, our research activities involved conducting an in-depth analysis of factors influencing financial literacy within the financial sector of Cambodia. We focused on household characteristics and the role played by financial institutions. While the persistent effects of the COVID-19 pandemic posed numerous challenges to our field trips and research activities, we were able to achieve our research goals as planned. These accomplishments are outlined in the "Summary of Research Achievements" section.
Strategy for Future Research Activity	In FY2023, we intend to conduct a study of social capital among financial borrowers by analyzing the factors influencing it. The data and information for this analysis will be sourced from our previous research activities, as well as from the National Institute of Statistics (NIS) of Cambodia and other relevant databases. If necessary, we may conduct additional field surveys and interviews with households and other relevant parties. Furthermore, to disseminate our research findings, we plan to participate in academic workshops and conferences.