BANGLADESH UNIVERSITY OF PROFESSIONALS (BUP)

Research Proposal
CONDITION OF FINANCIAL LITERACY IN BANGLADESH

Course-Research Methodology
Course Code-ALD 3601

Submitted By:
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ID : B1506017
BBA-2015
SEC : A
Submitted to:

Md. Mahedi Hasan

Lecturer (Statistics)

Faculty of Business Studies (FBS)

Bangladesh University of Professionals (BUP)

CONDITION OF FINANCIAL LITERACY IN BANGLADESH

Executive summary
Financial literacy is knowledge about personal management of finances. It gives the twin benefit
of protecting from financial frauds as well as planning for financially secured future. Financial
literacy gives consumers the necessary knowledge and skills required to assess the suitability of
various financial products and investments available in the financial market. Financial literacy
means the awareness about financial capability and investment risk that helps taking proper
investment decision through long term planning. Although Bangladesh capital market has around
3.0 million investors, most of the investors are marginal and in lack of proper literacy. They
make investment decisions mostly on rumors, intuitions and emotions as they are unable to
interpret the information disclosed in the financial statements and other sources. It gives rise to
information asymmetry in the market. Besides, they rely on behavior of some large investors to
make investment decisions. Financial literacy has become very importance in the recent years, as
financial markets have become complicated and there is information gap between markets and
the investors, leading to difficulties in making correct financial choices.
Purpose
This study has been undertaken to reveal how the current scenario is regarding the financial
literacy of Bangladesh. This is a pressing issue in the country and this study aims to understand
the underlying issues that are causing people to invest and identify the information gap that is
persisting in the country.
Significance
An economy is driven my money. And investors are the agent behind all the monetary dealings
that circulate around the economy. This research will provide an insight into the information
asymmetry that persists in the market and how there are a lot of potential investors out there.
This research is also undertaken to contribute to the economic development through improving
financial literacy and how it requires a lot of development.
Also, how the economy can take different strategies to improve different sectors of financial
literacy will be worked on. This will reflect which factors are in need of improvement and what
better ways are there to promote financial literacy.
Problem statement
Financial education is an integral part for development of the market. It is defined it as a
combination of financial awareness, knowledge, skills, attitude and behaviors necessary to make
sound financial decisions and ultimately achieve individual financial wellbeing. Of course,
definition of financial literacy and its manifestations may vary from country to country. In
Bangladesh, bridging the lack of basic knowledge on common financial services including very
simple risk-return framework might be kept as the initial object of campaigning financial
literacy.
This study aims to find the consequence of the poor financial literacy rate.
Literature review
If mass people do not have financial literacy they will not be interested to the formal financial
system and if they come forward without financial literacy, there is every possibility that they
will not get the benefits. In respect of financial markets like Bangladesh, which is dominated
mostly by the retail investors, financial education is an integral part for development of the
market. In 2012, BSEC has prepared a 10-year master plan for the capital market. It is mentioned
in the 10-Year Master Plan in BSEC that financial education should be started from the school
level to make it effective. To include the financial education in our text curriculum, a national
policy should be taken.
BB has identified success in dissemination of financial knowledge as key to meeting the critical
objectives of financial inclusion and consequently, financial stability.
Financial literacy is about making people financially literate aimed at enabling them to manage
their finance adeptly and making their decisions judiciously. The significance of financial
literacy can hardly be overemphasized particularly at a time when policy-makers and planners
alike have pinned their hopes on financial literacy in order to attain inclusive growth, vis--vis
all-round sustainable development of a country.
Benefit of the study:
If the research is conducted, it will reveal findings about the current condition of the Bangladesh.
This is useful for the government and other concerned bodies to use this information to use it to
develop the deplorable condition. This will also be able to let go of the manipulators and
investors who take advantage of the people who dont have enough information. This will benefit
all the current and future investors who are looking to expand their wealth through capital
markets. A lack of financial literacy or financial illiteracy may lead people to making poor
financial decisions that can have negative impact on financial well-being of an individual. Over
the last decade, financial range and scope spread further and access to financial services
widened. But a national policy on financial literacy is yet to be in place.
Objectives
1. To determine the present condition of the financial literacy in Bangladesh.

To analyze the overall impact of financial literacy in Bangladesh

To verify how effective the measures have been in terms of eliminating the gap of
information asymmetry.

Methodology
Financial literacy is a nationwide phenomenon. The study area for this research is the entire
population. Because we are trying to analyze an overall impact the financial literacy rate is
having in our economy. Although there are limitations of collecting all the valuable information
regarding financial literacy, we are going to consider a representative sample. The sample will be
decided based on the all the secondary information available and the people who have been
under government initiatives for improvement of their financial literacy.
Data sources are purely secondary due to the shortage of time and expertise on many analytical
factors. Also it would be difficult to find the correct sample population to be surveyed. This
imposes another restriction on the collection of data from primary sources.
The variables can take the form of independent or dependent. The independent variable can mean
the demographic factors such as income, age, geographical location, the educational structure.
The dependent variable in this study is the financial literacy rate itself which depends on the
independent variables.
Work plan
Initially the research would start off with looking for all the possible sources of obtaining
secondary data. This would incorporate all the websites and published reports for relevant
information on the desired subject on the context of Bangladesh.
Later on I would look for separating the significant information followed by organizing the
information for 15 days. After this, analytical tools and techniques will be used to summarize
data and to find any relevant findings regarding the particular subject. The next step would be to
see if this study is meeting its objectives and heading towards a feasible solution or not.
All the findings and data should be set out in a logical manner at the end of the study. This
should answer the problem statement and the objectives set out for this study. This would be
done in a time span of 20 days.
All this steps would not necessarily be in order, rather it would be a simultaneous work where in
the end all the information will be accumulated in order to prepare a comprehensive report on the
financial literacy of the country.