Islamic Financial Literacy and Living Standard of Women in Malaysia

Abstract

From year to year, Malaysia faces a rising cost of living, with the indicator of consumer price index with the rate has increased on average to 3.9% from 2016 to 2019. Since the emergence of Islamic banking and finance in Malaysia, people have been served with a wide range of Shariah-compliant financial products. Nonetheless, women's financial literacy level is lower than men's, and they are more likely to rely on men for financial affairs. This study aims to assess the level of Islamic financial literacy among Malaysian women and to assess it to their living standards. Besides, it also analyses the effect of demographic factors of women such as age, marital status, education level, and income level on Islamic financial literacy. This study uses purposive sampling with a survey as the instrument to collect the primary data from working women in Malaysia as the target respondents. It examines the data of 156 respondents, all of whom are women, using multiple regression for the data analysis. This study discovers that 82.69 % of women in the study have a high level of Islamic financial literacy. Based on the analysis, it finds that only age significantly influences the level of Islamic financial literacy of women in Malaysia. Next, the result shows that simultaneously all independent variables; age, marital status, education level, and income level, influence Islamic financial literacy. The findings further indicate that women with higher incomes outperform those with lower incomes. This research contributes to enriching the literature on Islamic financial literacy, which is that the empirical studies on women are limited. It also provides insight to the government, industry practitioners in enhancing their roles to improve the Islamic financial literacy of Malaysian women and widen the acceptance of Islamic financial products.