Financial Literacy among Farmers in Punjab: Implications for Farm Management and Financial Behavior

DOI: https://doie.org/10.1203/ES.2024946977

Dr. Rajeev Sengupta, Dr. Ameya Patil, Dr. Karan Randive, Dr. Ankita Bhatt, Dr. Mahesh Kumar

Keywords:

Financial literacy, financial behaviour, financial inclusion, farm financial management

Abstract:

Finance is crucial for all sectors, indicating management efficiency. While India has improved general literacy, financial literacy beyond basics could enhance understanding of farm finance. Farming requires entrepreneurial skills, with farm management central to farm finance. Adequate farm finance enables the adoption of relevant technologies, influencing farm finance management, financial behaviour, and decisions. This research paper investigates the financial literacy of farmers in the study region, how it impacts their financial conduct, and strategies to enhance farmers' access to formal financing options in Punjab, India. Additionally, the paper examines the influence of financial literacy levels and the financial inclusion efforts of the Union and State governments on farm finance management and behaviour. The study employed a mixed-methods approach, with the researcher gathering primary data through informal interviews with farmers in three villages of Punjab. The key findings indicate that farmers exhibit a moderate level of financial literacy and financial inclusion, suggesting that many are unaware of the full range of formal government aid tools available to them. However, basic awareness of government schemes is attributed to personal experience and word-of-mouth dissemination.

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