Authors: Vaishnavi Raju Dhobale, Prof. Bhaskar Lendave
Abstract: Financial awareness has emerged as a critical determinant of individual financial behaviour, particularly in urban economies characterized by increasing access to formal and digital credit systems. This study investigates the relationship between financial awareness and credit usage behaviour among urban consumers, with a focus on understanding how knowledge, attitudes, and socio-economic factors influence borrowing and repayment decisions. The research adopts a descriptive and analytical design, utilizing primary data collected through structured questionnaires administered to urban respondents. The study examines key dimensions of financial awareness, including budgeting practices, saving behaviour, knowledge of interest rates, and awareness of financial products, alongside credit usage patterns such as frequency of borrowing, purpose of credit, and repayment discipline. Statistical tools such as percentage analysis and Chi-square tests are employed to evaluate the significance of relationships between variables. The findings indicate that financial awareness significantly influences credit behaviour, with higher awareness levels associated with responsible borrowing, timely repayment, and reduced reliance on unnecessary credit. This aligns with existing literature suggesting that financial literacy positively impacts financial decision-making and reduces the likelihood of debt mis management. However, the study also identifies a persistent gap between basic awareness and comprehensive financial understanding, particularly in areas such as interest rate calculation, credit terms, and long-term financial planning. Additionally, the study highlights the role of demographic and behavioural factors—such as income, education, and financial attitudes—in shaping credit usage patterns. Prior research indicates that psychological factors, ease of credit access, and perceived utility also significantly influence credit behaviour, sometimes leading to excessive borrowing or materialistic consumption patterns. The study concludes that while urban consumers demonstrate moderate financial awareness, there is a strong need for targeted financial literacy initiatives to bridge knowledge gaps and promote sustainable financial behaviour. Enhancing financial education can contribute to improved credit management, reduced financial vulnerability, and overall economic well- being.
DOI: http://doi.org/10.5281/zenodo.20270747
