Theoretical Framework

FINANCIAL

FINANCIAL FINANCIAL FINANCIAL FINANCIAL

KNOWLEDGE SKILLS ATTITUDES BEHAVIOUS

The Financial Literacy Theory is integral to our research titled, "A Study on Poor to

Lower-Middle Income Earner’s Perception of the Emergence of Instant Cash Loans". It provides

a framework that can be used to examine the research questions we've outlined.

Firstly, the respondents' demographic profile, including their age, gender, and income

classification, plays a critical role in the context of the Financial Literacy Theory. Financial

literacy tends to differ among various demographic groups, and their income classification can

be reflective of their level of financial knowledge and skills.

Secondly, respondents' perceptions on the positive and negative aspects of using instant

cash loans, a key focus of our research, can serve as indicators of their financial attitudes and

behaviors. These perceptions can highlight the understanding and application of financial

knowledge and skills among the respondents. The Financial Literacy Theory posits that those

with greater financial literacy are more likely to make informed decisions about using such loans

as they can accurately perceive the associated risks and benefits.

Next, the study aims to understand the respondents' perceptions of the influences of

instant cash loans, specifically factors like convenience, urgency, and lack of alternatives. These

perceptions can be analyzed through the lens of their financial knowledge and attitudes. For
instance, a full understanding of the implications of taking an instant cash loan might lead an

individual to view it as a convenient solution in times of need, but also as a risky proposition

when alternatives are lacking.

Lastly, our research seeks to investigate the significant differences in perceptions towards

instant cash loans among different income groups - poor, low-income but not poor, and lower-

middle income earners. This too can be understood in terms of their varying levels of financial

literacy. Those possessing better financial knowledge, skills, and attitudes, possibly stemming

from higher income levels, may have divergent perspectives and behaviors regarding instant cash

loans as compared to those with lower financial literacy.

In conclusion, the Financial Literacy Theory enables the study to interpret the

perceptions, attitudes, and behaviors of the research population about instant cash loans. By

doing so, it provides valuable insights into the effects of financial knowledge, skills, attitudes,

and behaviors on the respondents' views and decision-making processes relating to these loans.