Abstract:
This study investigates moderating impact of income level on the relationship
between financial literacy and personal savings behaviour among individuals in
Mullaitivu District, Sri Lanka, . Mullaitivu, as a post-war and economically
underdeveloped district with limited financial inclusion, provides a unique rural
context for exploring financial behaviour. There is a lack of literature that has been
identified across this area in local and international context. Financial literacy was
the independent variable while personal savings behaviour served as the dependent
variable. Income level was the moderating variable. The study adopted a quantitative
approach and used questionnaire surveys to collect data. The sample was 401
respondents selected through the convenience sampling method. Data analysis
applied descriptive statistics, multicollinearity test, correlation analysis, and multiple
regression analysis. The results showed a significant positive impact of financial
literacy on personal savings behaviour. Out of the three components of financial
literacy, saving and investment knowledge were indicated as the strongest predictors.
The study recommends context-specific financial education interventions tailored to
rural populations. It might be useful to guide targeted interventions such as policy
makers, educators, and financial institutions; despite income not moderating,
regardless of income, literacy remains central. These insights provide valuable
implications for policymakers, educators, and financial institutions aiming to promote
financial inclusion and long-term financial well-being in underdeveloped
communities.
