Financial Capability, Financial Competence and Wellbeing in Rural Fijian Households

This study seeks to understand the financial competence of rural communities in the Pacific. It also examines the relationship between the financial competence of those who make financial decisions on behalf of rural households and the wellbeing of their household.

The study has sought to determine whether appropriate interventions to increase financial literacy and provide villagers with access to a safe, reliable and well-regulated banking service can result in an increase in the financial competence of decision makers within households. It examines rural householders' ability to:

• Use current income to enhance future income sustainability through re-investment in income generating activity;
• Endure income shocks through savings;
• Enhance wellbeing of members of the household, be it in terms of enabling children to continue in formal education beyond primary school or purchase of household assets.

Study findings indicate that households in which the principal financial decision makers are financially competent are more likely to manage household cash flows and use a budget to plan future expenditure. These households are also more likely to have a cash surplus at the end of their payment cycle and re-invest cash to further enhance income.