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Abstract
This article probes into the distinct forces that influence the demand for financial services/products in Mauritius. The major contribution of this study is that a decomposed assessment is made with respect to the demand for financial services/products, namely, bank accounts, mobile banking, shares, life assurance policies, and treasury bills. Findings show that financial literacy matters significantly, let alone a pecking order presence with demand for bank accounts predominating over any other type of demand for financial services. Policy-wise, this article calls for ongoing efforts to improve on financial literacy for sophisticated financial products like stocks and treasury bills.
Notes
Note. *, **, and *** indicate significance at 10%, 5%, and 1%, respectively.
Note. *, **, and *** indicate significance at 10%, 5%, and 1%, respectively.
Monthly net income pertains to income after all tax deductions at source.
See Magee, Robb, and Burbidge (Citation1998) for a discussion on the use of sample weights with complex survey data.
A principal component analysis could effectively be used to distill down the core components of financial literacy. However, to keep things simple, averages have been used.
The R 2 obtained is not directly comparable to studies implemented in developed countries since country dynamics differ significantly.