Development and Validation of an Alternative Scale on Financial Literacy of Members of Savings and Credit Cooperatives in Region XI

Abstract

A new scale for assessing financial literacy among savings and credit cooperative members in Region XI was created and refined in this study using a sequential exploratory mixed-method design. The work started with interviews that helped compile the first set of items. Afterward, these items were tested through a survey, and the data were examined using exploratory and confirmatory factor analyses to verify the scale’s structure and validity. The study found five key dimensions of financial literacy: financial discipline, planned borrowing, shared learning, risk preparedness, and future financial security. Each dimension demonstrated solid reliability and validity, resulting in a localized and statistically sound framework for assessing financial literacy within the cooperative setting. These findings indicate that financial literacy extends beyond personal knowledge and money management; it also encompasses shared practices, readiness for financial risks, and careful long-term planning. This scale allows governments, cooperatives, and educational institutions to develop targeted programs that support cooperative sustainability, promote responsible financial behavior, and enhance members’ financial capability. Furthermore, this research aligns with the country’s financial inclusion goals and reinforces global efforts toward sustainable development.