Impact of Financial Literacy on Poverty Reduction in Dadin Kowa Town, Doguwa Local Government Area, Kano State

Abstract

The proportion of the populace living in family units with poverty has been on the decrease globally but in Nigeria it remains alarming. This study investigated the impact of financial literacy on poverty reduction in Dadin Kowa Town, Doguwa Local Government Area, Kano State to explore the effect of financial literacy in the reduction of situational and generational poverty. The study applied cross sectional data collected from 200 households in Dadin Kowa Town using convenience sample technique. Probit model was used in the study with consumption and standard of living deprivation index as measures of situational and generational poverties respectively. The outcome of the Probit estimation revealed that probability of situational poverty reduction increases with financial literacy but probability of generational poverty reduction decrease with financial literacy. Based on the outcome the study concluded that financial literacy has a positive significant effect in the odds of situational poverty reduction with a negative significant effect in the odds of generational poverty reduction, all things being equal. The study recommended that government and institutions of learning should intensify effort to promote the level of households’ financial education.