Assessing Farmers’ Awareness of Traditional and Advanced Financial Concepts: Evidence from Selected Districts of Saurashtra

Abstract

Financial awareness is becoming increasingly important for farmers as they come into contact with a wider range of banking, investment, insurance and digital financial services. This study examines farmers’ awareness of traditional and modern financial concepts and compares their level of awareness across these two areas. Primary data were collected from 767 farmers through a structured questionnaire. The study covered 33 financial concepts, comprising 13 traditional concepts and 20 modern or advanced concepts. Traditional concepts included inflation, risk, return, interest, holding period, KYC, annuity and basic banking terms, while the modern group covered digital banking and payments, mutual fund concepts, capital-market terms and insurance-related concepts. A binary scoring method was used to measure awareness, and separate percentage scores were calculated for the two groups. Descriptive statistics and a paired-samples t-test were used to analyse the data. The results show that farmers had a higher level of awareness of traditional financial concepts, with a mean score of 50.34%, compared with 21.55% for modern financial concepts. The difference between the two scores was statistically significant, and the relationship between traditional and modern financial awareness was also positive and significant. The findings suggest that although farmers have a reasonable familiarity with conventional financial concepts, their understanding of modern and specialised financial concepts remains limited. The study therefore highlights the need for financial education initiatives that go beyond basic financial knowledge and focus more on modern financial products, digital financial services and market-related concepts.