PERCEPTION OF DEBT INSTRUMENTS AMONG COMMON MASSES OF MAHARASHTRA - INDIA
Abstract
Debt instruments are financial tools, like bonds or loans, used to raise capital by promising repayment with interest. This paper explores the public perception of debt instruments in India, focusing on the factors influencing investor preferences and the overall impact on the financial market. Despite the burgeoning Indian economy, the adoption and understanding of various debt instruments, such as government bonds, corporate bonds, and fixed deposits, remain varied among the general populace. Through a comprehensive survey based on random sampling method and regression analysis along with analysis of secondary data, this study identifies key demographic and psychographic factors that shape investor attitudes towards debt instruments. The findings reveal a strong preference for traditional and low-risk investments such as fixed deposits (categorised as a saving tool rather than an investment tool in this study), as only 25.1% of the respondents in this study claimed to mostly invest their disposable income, while 74.9 chose to primarily save or spend it. This is largely driven by a lack of financial literacy and risk aversion among the general population with 32.4% of the respondents being unaware of the term “debt instruments”. Additionally, the study examines the role of cultural attitudes, trust in financial institutions, and recent economic policies in shaping these perceptions. Through regression analysis the dependent variables show a significant impact on the perception of debt instruments with a R2 value of 45 per cent. The paper recommendations financial literacy programs to enhance public awareness and foster a more inclusive and informed investment environment, thereby contributing to the stability and growth of the Indian financial market.
Keywords: Debt instruments, Public perception, Indian financial market, Financial literacy, Investment behaviour.
