Financial literacy and applications to the Service for Consumer Protection and Financial Inclusion of the Bank of Russia
Inozemtsev E., Mamontov D., Ostrovskaya E., Penikas H.
We used the dataset of the Consumer protection service and financial inclusion of the Bank of Russia to test the research hypothesis to what extent the financial literacy is associated with the flow of the justified (grounded) applications. We used three financial literacy proxies: National agency of financial studies (for 2020 only), All-Russian household survey of consumer finance and online-exams for financial literacy both managed by the Bank of Russia. We additionally processed data from the latter two sources to assure data representativity.
We find that financial literacy positively affects both the intensity and the portion of grounded applications.
We argue that rise in financial literacy helps in more efficient revelation of true consumer rights’ violation cases by consumers themselves, in more critical revision of seemingly violation cases, as well as in more trust to the Bank of Russia as the institution responsible for consumer rights’ education and protection. Our findings do not depend upon the age of financial services consumers, but are more statistically significant for people with higher levels of education.