Determinants of financial literacy: a systematic review and future research directions

Abstract

Financial literacy is considered an essential attribute for individuals and businesses to make optimal decisions. Considering the importance of financial literacy and the dearth of rigorous summaries in the existing literature on this topic, this study aims to investigate the factors affecting financial literacy. In doing so, we conducted a systematic review by selecting 53 papers from the Scopus database published between 1981 and 2024. Our investigation revealed that financial literacy is a multidimensional concept, and its determinants can be summarized into seven dimensions, namely demographic, socio-economic, psychological, financial, societal, Islamic, and technological factors. While demographic and socio-economic factors are widely used, psychological, financial, societal, and Islamic factors have received less attention from researchers. Nevertheless, the integration of technology into financial markets has recently drawn interest in the technological facet of financial literacy. Additionally, we analyzed the most influential papers and co-authorship networks in financial literacy research, providing a network analysis of existing studies. We further suggest that religious and technological factors, specifically Islamic financial literacy and digital financial literacy, may also influence financial literacy and deserve further investigation.