Group of Results on Financial Intelligence Internal Factors

5.1.3 Group of results on financial literacy factors

This study suggests that: DTTC includes 3 groups of factors reflecting financial knowledge, financial attitudes and financial behavior. Therefore, the impact on DTTC will include these 3 groups of factors.

First, DTTC is reflected through Financial Knowledge

The results from the model show that the correlation coefficients of the two knowledge groups 1 and 2 for DTTC are 0.44 and 0.40 points respectively and the Sig coefficient = 0.000 < 0.05. This means that the two groups of financial knowledge factors in particular or the group of financial knowledge factors reflect DTTC or hypothesis H1 is accepted. This is also the result of studies by Huston (2010), Collins (2012), Nicolini et al. (2013), Scheresberg (2013).

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Thus, for the poor in rural areas of Vietnam, financial literacy is one of the factors reflecting financial literacy. An individual's high financial literacy can be reflected in their financial literacy. When they have a good understanding of financial indicators, their ability to invest and save will be better and more suitable for their purposes. This issue is especially relevant for people in the Northern region of Vietnam, where literacy is reflected in education: most people in this region pay great attention to educating their children when attending universities and colleges, so they have improved their knowledge through this issue (Nguyen Kim Anh et al., 2017, Tran et al., 2017).

In the group of factors on financial knowledge, there are 2 groups of factors affecting DTTC. Firstly, the groups of factors K6 and K7 have separate impacts on DTTC: this group of factors is understood as variables related to the diversification of savings sources, in which savings must be understood to include personal investments for the purpose of making a profit. Secondly, the groups of factors K1, K2, K3 and K5 simultaneously affect DTTC, showing that similar factors related to knowledge (related to the issue of how to save) also affect DTTC.

Second, DTTC is reflected through Financial Attitude

The results from the model show that the correlation coefficient of financial attitude towards DTTC is 0.29 and the Sig coefficient = 0.000 < 0.05. This means that the positive financial attitude factor reflects high DTTC or hypothesis H2 is accepted. This is also the result of studies by Atkinson and Messy (2012), OECD (2013), Moore (2003).

Thus, the more positive the financial attitude reflects the higher the level of financial literacy. Specifically, the subject accurately and positively assesses the changes and fluctuations of the economy, the ability to

The more accurate and positive the person's knowledge and savings investment is. This group of views is also supported by Benjamin and Brandt (2004), Nguyen Kim Anh et al. (2017) when they said that: most poor people in rural areas have a more saving attitude than spending, especially in Northern Vietnam. Therefore, improving financial attitudes through different forms can make people increase their level of financial savings.

Third, DTTC is reflected through Financial Behavior

The results from the model show that the correlation coefficient of financial behavior to DTTC is 0.37 and the Sig coefficient = 0.000 < 0.05. This means that the financial behavior factor reflects DTTC or hypothesis H3 is accepted. This is also the result of studies by Hilgert et al. (2003), Atkinson and Messy (2012), OECD (2013), Moore (2003), Taft et al. (2013), OECD (2015). Thus, the better the financial behavior, the higher the level of DTTC. Specifically, the more the poor save and spend accurately, the more accurate and positive their understanding and attitude towards the economy. These views also reflect that: the higher the saving behavior, the better the score of this area. Specifically, the more money an individual (a poor person in rural areas) saves from income-generating activities, the more positively he or she is evaluated. However, these views are currently being refuted by various studies on financial inclusion: if individuals only save without using the money to invest, this money will not bring high profitability! Therefore, it is necessary to adjust these items to suit the investment portfolio or opportunity cost.

5.1.4 Group of results on the impact of financial literacy on income

Interestingly, DTTC is affected by income, and then, DTTC itself affects income in return. The Sig value = 0.000 < 0.05 and the VIF value = 1.000 means that DTTC has an impact on income. The unstandardized Beta coefficient in the model is 1.038 > 0, which shows that DTTC has a positive impact on income. Thus, hypothesis H10 is accepted. This is also the result of a number of studies on the human capital group and endogenous growth models such as Lucas (1988), Bosworth (1994), Fisher and Hostland (2002); Lusardi et al. (2017).

To increase income for the poor in rural areas, one of the measures proposed is to increase the people's GDP through various issues in demographic variables or internal issues in the components of GDP. However, the coefficient Rof the model is not high, then it shows that: the impact on income of

Rural people also have many other factors (for example, direct survey results show that the income of poor rural households depends on subsidies from the state, relatives, and charitable organizations, not from these people themselves improving their own knowledge). Therefore, the introduction of policy implications to improve financial literacy to increase people's income needs to go hand in hand with other policies.

5.2. Some policy implications

Increasing the financial inclusion rate, in addition to proving that it affects the income of the poor in rural areas, can also influence government policies. If the financial inclusion rate increases, the poor will be more receptive to the policies (i.e., it will limit macroeconomic risks) and will have appropriate financial behavior. For credit institutions, increasing the financial inclusion rate will help save on advertising costs, or training people to use financial products, gradually reducing the use of illegal credit.

From the discussion of research results, the author proposes some policy implications for improving the access to finance for the poor in rural Vietnam.

5.2.1. Financial knowledge implications

For the state

Improving financial inclusion for the poor in rural areas in particular and the entire population in general is one of the key policies of the country, especially when financial services are developing at a very high rate in the current period. Based on the tested models, the author makes some recommendations as follows:

First , develop programs and policies to improve the financial literacy of the poor in rural Vietnam. Specifically, prioritizing financial education and developing orientations and programs, with an important first step being a national capacity survey. The purpose of this survey is to provide a basis for developing and designing a national financial education strategy (NFES). According to the author's empirical research results, the impact of income on financial literacy is 0.053, the largest of all factors, while the impact of education level and age are 0.026 and 0.025, respectively. Therefore, the national financial education strategy should focus on people in rural Vietnam, especially low-income people, the poor and mountainous provinces. This strategy should be divided into small stages, specifically divided into 2 stages:

- Phase 1: Financial education for the poor, low-income people, women in rural areas, and mountainous provinces.

 Develop a national financial education curriculum by developing a set of core standard modules for financial education as the basis for specific training programs.

 Propose amendments or establish new government policies and regulations to

National program support.

- Phase 2: General financial education for all population groups through the formal education system by incorporating financial education as formal units in the curriculum of schools from primary to secondary and universities; establishing financial education training centers or financial education support centers for different needs; requesting and establishing financial education services for customers at banks, financial companies and other financial institutions.

These programs should be designed to be flexible and can be revised at any time as the external environment changes or to reflect the progress of the DTTC development process. In addition, these programs can be developed in conjunction with news channels and television programs.

While developing training programs, the following issues should be kept in mind:

- Focus on imparting knowledge to people of sufficient age, in order to (1) be able to acquire more knowledge from issues related to financial knowledge and financial education; (2) Because research results show that age has a positive impact on DTTC, people of sufficient age in rural areas are having positive impacts on others due to the influence of collective psychology.

- Knowledge should be integrated into games to be highly compatible. This issue can be built on training models such as the "micro business game" model. The Micro Business Game is a form of simulation of the business operations of a juice shop in a country called Culiar, with the same name currency. The game has 4 rounds corresponding to 4 years of business operations. Learners will be provided with information about hypothetical situations about issues related to this juice business through Event cards, which include different options. Each team will discuss to make a decision to choose the appropriate option. Next, the teams are given Results cards to know how their decisions lead to results. Based on the choice, along with the prediction

Based on previous sales reports, based on instructor guidance, teams calculate costs, revenues and prepare financial reports for business operations.

Second , the state should organize training programs to train human resources. Specifically, each province will have leaders and experts trained in ICT and aware of the importance of ICT to the national economy, thereby having awareness of improving ICT directly in their provinces and localities to understand the importance of ICT to the national economy. From there, propose a framework for ICT training programs for provinces and localities, based on which each province and locality will have flexible changes to suit their province and locality.

Specifically, for human resource selection and training programs, the following methods can be combined to conduct:

- Coordinate with organizations in the market to teach different subjects. Specifically, in the case of training on financial knowledge, it is possible to combine through (1) Microfinance organizations; (2) Universities and academies related to microfinance issues such as National Economics University, Banking Academy, Women's Academy; (3) through organizations such as Farmers' Association, Women's Association; (4) through banking groups that provide microfinance services such as Vietnam Bank for Social Policies, Vietnam Bank for Agriculture and Rural Development, etc. These organizations will select suitable members for their activities, then conduct teaching through visual programs on practical issues. Thus, financial knowledge will be conveyed more appropriately.

- Create a certain policy framework in cooperation with different organizations to develop this issue, especially courses to improve financial literacy in rural areas through cooperation.

Third , diversify investment issues, and should study and develop credit association and revolving credit activities (ROSCA) to help people develop the economy, as well as diversify investments. This activity can be expressed through semi-formal credit such as establishing wards/ho/hui/bieu in localities in rural areas, but on the basis of registration with the base (for example, registration at the People's Committee of the ward/commune). These activities can serve small business models.

For local

In addition to government programs with national goals, localities should also have plans to improve the living standards of people in their localities.

First , organize training programs and propaganda sessions to improve the quality of life for your locality.

- There should be programs that focus on improving access to information for low-income and poor people because access to information for these groups is still very limited.

- Organize small classes every week to disseminate financial knowledge to the people, where people can share knowledge with each other. Classes should be divided into villages and hamlets focusing on people with low education.

Second , localities should promote the power of visual and audio media directly through banners and radio systems, with short, easy-to-understand messages. According to empirical research results, DTTC has a clear impact on people's income in rural areas of Vietnam, with the strongest factor affecting income being positive financial behavior. Localities should promote meaningful messages with positive financial attitudes and behaviors, because good financial attitudes will also lead to good financial behaviors.

Third , localities should focus on improving the financial literacy of young people with potential for development through financial orientation and training programs. Because these people will directly participate in the economic development process of the locality and create added value for their locality. Improving the financial literacy of this group is one of the factors contributing to local economic development.

Fourthly , from April 5, 2019, Decree No. 19/2019/ND-CP on associations, rotating savings and credit associations, and wards has taken effect, overcoming many legal gaps of Decree 144/2006/ND-CP. Specifically, this Decree has stipulated in detail the principles of association organization; conditions for membership and association head; joining and withdrawing from associations; agreement documents on associations; order of receiving associations, interest rates; rights, obligations and legal responsibilities of members and association heads. However, in reality, lax management and lack of timely information by local authorities are also major causes leading to many unfortunate incidents such as association and association collapse. At the same time, propaganda and warning work to keep people vigilant has not been focused on. Therefore, localities should have plans to disseminate information about ward, family, and rotating savings and credit association regulations to the people so that people can access accurate and reliable information sources, limiting people from seeking black credit and reducing the chance for hui owners with bad intentions to survive. To do this, localities must develop plans and program frameworks to be able to manage and capture information promptly.

At the same time, it also controls well the wards, families, and associations operating in its locality.

Fifth , information technology needs to be more widely disseminated throughout rural areas of Vietnam. People can access information and modern financial products in a more proactive manner. From there, they can catch up with the development trend of the modern economy in the industrial revolution 4.0.

5.2.2. Financial Attitude Implications

Financial attitude is an extremely important issue in the formation of financial behavior, because studies have shown that from attitude, different problems of financial behavior can be formed. Therefore, to promote issues related to financial attitude, it can be done through the following tasks:

Firstly , after the field trip to the locality, the author found the problem: in rural areas, people's attitudes are very indifferent to financial issues, especially modern finance. Therefore, it is necessary to build a number of training and coaching programs to gradually change people's habits and attitudes towards these issues. This can apply some experiences of microfinance organizations in the world: lending to use smartphones, then gradually applying payment methods on the phone, for example, saving money or paying electricity bills online. Based on that, it will gradually create habits of using formal finance, in order to promote the poor to access credit services.

Second , strengthen information and communication work on the importance of improving financial literacy for the rural poor. Policy makers should promote the power of visual and audio media directly through banners and radio systems, with concise, easy-to-understand messages and further expand modern communication channels for financial information and news. In addition, local communication can also give people the opportunity to have closer access to new financial products, thereby improving financial knowledge and changing people's attitudes towards these new products.

Third , focus on efficiency and ease of use when building financial programs and products. Focus on diversifying financial services and products for people with different levels of DTTC in rural areas of Vietnam.

Fourth , ministries, departments and branches should cooperate with each other, along with domestic and international financial organizations to develop programs suitable to Vietnam's characteristics.

Disseminate financial knowledge and financial packages to people, so that people have more access to modern financial products.

5.2.3. Financial behavioral implications

Financial behavior is one of the groups of factors that have a direct impact on DTTC. Therefore, to increase DTTC and thereby increase income for people in rural areas, the following activities can be carried out:

First , increase the saving habit of the poor in rural areas of Vietnam. Currently, the support programs of the Vietnam Bank for Social Policies and some microfinance organizations do not require people to participate in compulsory savings but convert them into voluntary savings. However, to maintain the saving habit, it is necessary to support the establishment of households/groups/wards/groups based on the foundation of savings groups. This will promote the ability of the poor to save money in the future and spending will also be more appropriate because people supervise each other.

Second , for the savings scale, members deposit small amounts of savings periodically every month. The monthly deposit is 50,000 VND. The weekly deposit is 20,000 VND. The quarterly deposit is 150,000 VND. Borrowers can commit to paying a higher monthly mandatory amount, but must ensure a minimum amount of 50,000 VND/month or

20,000 VND/week, 150,000 VND/quarter. This activity can be combined with the formation of revolving credit and savings associations for development.

Third , localities should have plans to support lending for household-oriented investment with preferential loan packages, stimulating local economic development, especially in localities developing agricultural, industrial and craft village production. In addition, this also creates conditions for people to access legal loans in a more diverse, convenient and simpler way, limiting people from seeking illegal black credit sources. This activity will promote positive financial behavior of people in accessing legal capital sources.

Fourth , in the current era of Industry 4.0, more attention should be paid to the development of activities related to financial technology, especially in rural areas of Vietnam. It is undeniable that the financial management benefits that this is supporting for people. Technology is simplifying the financial sector, bringing more choices to consumers. Accordingly, transactions or financial activities such as money transfer, investment, personal payment and bank loans... can all be done via smart mobile devices. In the experiment when the author collected the questionnaire, the rate of people accessing and using electronic payment applications, or using ATM cards accounted for a large proportion.

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