Developing a financial literacy scale for Arab context: A case of university students

Abstract

The present study develops a tool to measure financial literacy in the era of the post-COVID-19 pandemic while recognizing the challenges and changes posed by the pandemic. Investigating and validating it in the Arab context that lacked such measurement and a dire need for further exploration. It employed new financial concepts that emerged during and post-COVID-19 (e.g., e-wallet, emergency funds), besides adjusting some items from previous instruments (e.g., Yanto et al., 2021; Organisation for Economic Co operation and Development [OECD], 2019). An electronic questionnaire was distributed among Jordanian universities students. 507 valid responses were retained. Of the sample, females, employed students, bachelor’s degrees, and business and social science majors represent 51.7 percent, 36 percent, 78.5 percent, and 36.3 percent, respectively. A quantitative approach was conducted using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) via AMOS-SEM to validate the robustness of the model. The findings revealed that the EFA demonstrated 11 items with three factors retained for measuring financial literacy (FL) (knowledge, practice, and skills) agree with (Baistaman et al., 2020). Based on the CFA result, the model fits the indexes (CMIN/DF = 2.369, CFI = 0.985, GFI = 0.966, RMSEA = 0.052). Th developed tool is approved in its context, and it would assist policymakers in obtaining information necessary to enhance government strategies, namely, the National Financial Inclusion Strategy.