Research On The Impact Of Financial Literacy On The Availability Of Credit For Urban And Rural Households

With the continuous innovation and development of the financial industry,digital inclusive finance has entered the public eye and become the key development direction in the coming period.Its fundamental purpose is to build a financial service system that can provide fairness and justice to all social strata and groups,so as to effectively promote China’s economic development.However,the problem of credit constraints caused by factors such as the dual financial structure of urban and rural areas,the lack of credit resources and the self-condition of loan entities has never been solved,and has become an important factor restricting the development of inclusive finance.Financial literacy is an important manifestation of personal financial cognition,which can not only have a direct impact on the family’s lending behavior,but also help families better participate in the financial market,achieve reasonable allocation of resources,thereby improving the wealth level of families,and also have an important impact on the credit availability of urban and rural households.Based on this,from the perspective of credit constraints,this paper takes general households as the investigation object,uses the data of the 2019 China Household Finance Survey to extract the relevant questions in the questionnaire,and uses principal component analysis to construct financial literacy indicators,and finds the difference in the distribution of urban and rural households of financial literacy through the descriptive analysis of sample data,which establishes a basis for quantitative analysis.In the empirical analysis part,the difference and impact between urban and rural areas were analyzed by taking the availability of urban and rural household credit as the dependent variable,financial literacy as the independent variable,and the characteristics of household heads as the control variable.In order to confirm the research hypothesis,by constructing a Probit model to benchmark regression for the whole sample and urban and rural sub-samples,testing the heterogeneity by age,sex,urban-rural differences,and using the Logit model for robustness testing,it is concluded that at the 1% level,financial literacy has a significant positive effect on the improvement of credit availability of urban and rural households,and the higher the financial literacy,the more likely the credit demand is converted into formal credit availability rather than informal credit availability.Finally,on the basis of theory and empirical evidence,this paper provides corresponding countermeasures and suggestions for the efficient popularization of financial knowledge,the improvement of household financial literacy,and the increase of residents’ credit availability.It will help improve household financial literacy and credit availability on the basis of reducing the gap between urban and rural areas,and provide useful references for effectively alleviating financial exclusion and promoting the construction of a digital inclusive financial system.