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Abstract
The primary purpose of this study was to examine the influence of financial literacy as well as other relevant factors on current use of financial services as well as future demand fro financial services in Russia. The levels of financial literacy throughout Russia were also examined and compared to financial behaviors. The conceptual framework underlying the study was the Andersen Behavioral Model adapted to financial services. The model suggests that use of financial services is a function of an individuals predisposing, enabling, and need characteristics. Data for this study came from the 2008 Nationwide Financial Literacy Survey (NFLS) conducted by the World Bank in Russia. The NFLS sample was 1,600 adults age 18 and older across 40 Russian regions who provided answers to 50 survey questions. Chi-square tests were applied to test the relationship between financial literacy and the variables previously identified in the literature as relevant. Then logistic regression was used to predict consumers use of financial services now and in the future based on the sets of predisposing, enabling, and need variables. The similarity of the questions in the 2008 NFLS used to assess basic financial literacy to questions used by other researchers revealed that Russian respondents demonstrated a much lower level of basic financial knowledge than American, Dutch, and Indonesian consumers on all questions where comparison was possible. Only when compared to Indian respondents understanding of inflation and Italian respondents understanding of percent calculation were Russian respondents more knowledgeable. Results also demonstrated that the Russian population lacks awareness of their rights as financial services consumers. An important conclusion from the analyses regarding current use of financial services confirms that financial literacy does affect use of financial services and the relationship persists regardless of the specific measure of literacy (objective or subjective). The results did not provide evidence that the basic financial literacy of respondents affected their plans to use financial services in the next two years.