Financial Knowledge of Chinese Rural Residents: A Qualitative Study from Fujian

Background and Purpose: Financial knowledge is a prerequisite for beneficial financial performance and desired financial outcome. Consistent evidence indicates rural population obtains lower financial knowledge than the urban counterpart. Financial knowledge study in Chinese rural residents, however, is insufficient both in quantity and quality. Furthermore, there is a lack of research from consumer’s side to uncover their understanding of financial knowledge.

This paper aims to fill this gap by adopting a grounded theory informed qualitative approach to bring the voice of Chinese residents to identify what kind of financial knowledge is needed and desired, and what characteristics are relevant to different interests in financial knowledge.

Methods: Fifty-one in-depth, semi-structured interviews were conducted with fifty-three adult residents in Fujian, a province that holds a middle place in national GDP ranking and shows a salient disparity in economic development geographically. Three villages (Pingshang, Peitian, and Jiaoyang) were chosen to represent the areas of low, middle, and high economic level, respectively. Snowball and purposive sampling strategies were adopted. The sample shows demographic diversity in gender (30% female; 70% male), age (27% 18-29; 50% 30-59; 23% 60+), and occupation (6% government/school; 9% retail; 8% finance related; 15% agriculture; 4% architecture; 10% manufactory; 6% service sector; 8% college student; 19% retired; 4% unemployed). Interviewers fulfilled three biweekly online qualitative method training and two full days on-site training on interviewing. Two to three interviewers worked as a group to conduct home-visiting interviews in Mandarin under the supervision of the authors. Interview questions covered daily consumption, large expense, budget keep, bank services, fraud experience, market participation, social welfare, and interested financial knowledge. Interviews were transcribed and peer-reviewed. Four trained coders independently coded each transcript, using Nvivo 11.0 qualitative software, guided by the principles of grounded theory and an inductive approach to directed content analysis. Weekly team meetings were held to clean up conflicts.

Findings: Data analysis reveals findings that are hardly documented by current standardized measures: 1) Desired financial knowledge in rural residents covers a broad range, from bankcard and ATMs usage to large-scale fund management. 2) Different interests in and the willingness to learn financial knowledge vary in age, occupation, family role, and community resource (such as working population, transportation, and disaster). 3) Generally, financial knowledge in rural residents is highly connected with the production and raw materials, such as seed, crops, bricks, and steel. 4) The value of family, community, and kinship bring significant impact on desired financial knowledge. For example, since family takes responsibility to look after the elderly, insurance for retirement is not that appreciated; shared commitment to help community members build houses by hands, reduces the emphasis on housing mortgage.

Conclusion and Implications: Findings highlight a broad and diverse content of desired financial knowledge in Chinese rural residents, which are different from domains captured in current standardized scales. Further qualitative and mixed methods work should be contributed to cultural appropriate definition and measure of financial knowledge. Financial education programs should be customized and targeted, considering the diverse interests.