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Research Paper | Economics | Volume 15 Issue 3, March 2026 | Pages: 483 - 490 | India
Financial Literacy and Borrowing Behaviour: Evidence on Gender Differences
Abstract: Financial literacy is recognized as a key determinant of economic behaviour, specifically in developing economies like India, where access to formal finance is expanding rapidly. Using data from the Global Findex Database (2021) published by the World Bank, this study examines the impact of financial literacy on individuals? likelihood of borrowing and explores the role of gender in this assessing such relationship. A composite Financial Literacy Index is constructed through max?min normalization of behavioural and awareness indicators, and borrowing behaviour is analyzed using a binary logistic regression framework with robust standard errors. The results suggest that higher levels of financial literacy are associated with increased probability of borrowing, indicating that financially literate individuals have better financial exposure to engage with formal credit markets in an informed manner. However, gender differences continue to remain with women exhibiting a lower propensity to borrow as compared to men, after accounting for education levels and other socio-economic characteristics. The interaction term between financial literacy and gender is statistically insignificant, suggesting that the positive effect of financial literacy on borrowing operates similarly across genders. Other factors such as education, employment status, income levels and urban-rural residence also significantly influence borrowing behaviour.
Keywords: Financial literacy, Borrowing behaviour, Gender differences, Financial inclusion, Developing economies
How to Cite?: Harshita Mansharamani, "Financial Literacy and Borrowing Behaviour: Evidence on Gender Differences", Volume 15 Issue 3, March 2026, International Journal of Science and Research (IJSR), Pages: 483-490, https://www.ijsr.net/getabstract.php?paperid=SR26305110026, DOI: https://dx.dx.doi.org/10.21275/SR26305110026