The propensity towards indebtedness and savings behaviour of undergraduate students: the moderating role of financial literacy

Purpose: This study investigates how students' propensity towards indebtedness affects their savings behaviour. Additionally, the study examines the moderating role of financial literacy in the relationship between propensity towards indebtedness and savings behaviour. Design/methodology/approach: Questionnaires were administered to undergraduate students from the University of Ghana Business School. A total of 370 valid responses were used in the empirical analysis. The hypothesised relationships were tested using partial least square – structural equation modelling. Findings: The structural model results suggest that students' propensity towards indebtedness is negatively related to their savings behaviour. Further, the results demonstrate that financial literacy moderates the negative association between students' propensity towards debt and savings behaviour. Originality/value: This study highlights students' propensity towards indebtedness and how it impacts their savings behaviour.