A Study On The Influence Of Financial Literacy On Farmers’ Financial Management Behavior

With the gradual expansion of the financial market,the gradual increase in the income of China’s residents and the implementation of the central bank’s policy of liberalising the deposit and lending spreads,farmers’ wealth has continued to accumulate and more and more farmers have become involved in various financial management activities.Although residents’ wealth is kept in banks,the real rate of return is lower than the rate of currency depreciation,so more and more residents need to find scientific financial management decisions to preserve and increase the value of their household wealth.At the same time,the constant introduction of newer financial products by financial institutions coupled with changes in the social context such as inflationary pressure to depreciate currencies and longer life expectancy per capita have led to a trend of diversification in the way residents manage their finances.This will place higher demands on the level of financial literacy of each household or even individual,which is an effective human capital for investors to manage their own wealth and plays a very important role in the formulation and selection of financial management methods.This paper aims to investigate the impact of financial literacy on the financial management practices of farmers in Wuhan.The study found that different levels of financial literacy have a direct impact on the financial management and wealth accumulation of farmers.Therefore,it is of great theoretical and practical importance to improve the financial literacy of Wuhan farmers in order to improve their financial management and promote social and economic development.A quantitative study is needed to determine which aspects of financial literacy have an impact on farmers’ financial management and to what extent.We analyze the financial literacy and financial management of farmers in Wuhan through field research and construct financial literacy indicators to measure the level of financial literacy in Wuhan.This paper focuses on the influence of financial literacy on financial management behavior of farmers in Wuhan,and uses Probit and Oprobit models and OLS linear regression analysis to analyze the influence of financial literacy on financial participation,financial time planning,and the number of financial types of farmers in Wuhan.The results show that the effects of financial literacy on financial planning participation,financial time planning,and financial types of farmers in Wuhan are all positive,and the higher the financial literacy,the richer the financial management methods of farmers and the more financial products they choose;when farmers have a higher level of financial literacy,their financial time span is longer;the higher the financial literacy,the higher the number of financial types of farmers.Financial literacy has a crucial influence on farmers’ financial behavior.In order to improve farmers’ financial literacy,promote farmers’ financial diversification,and optimize farmers’ financial management,this paper puts forward relevant suggestions from the perspectives of society,financial institutions,and farmers themselves,respectively,based on the research results and actual practice.