Does financial literacy of rural women entrepreneurs influence their financial well-being? The mediating role of personal financial behaviour

Purpose The primary aim of the present study is to examine the impact of financial literacy (FL) on financial well-being (FWB) among rural women entrepreneurs in India. It also investigates the mediating function of personal financial management behaviour (PFMB) in the relationship between FWB and FL. Design/methodology/approach Utilising survey questionnaires, data are obtained from 394 rural women entrepreneurs from Bihar district, India. The authors framed a conceptual framework and further tested it using structural equation modelling in Smart Pls 4.0. software. Findings The outcomes revealed that FL directly and indirectly impacts FWB. Further, mediation analysis shows that PFMB partially mediates the association between FL and FWB. Practical implications Based on the relevance of FL and general well-being, the policymakers can undertake specific FL initiatives and educational programs to promote the knowledge and financial capabilities of the rural women entrepreneurs in Bihar. The study is also a major contribution to the existing body of research, especially in the context of the social cognitive theory. Originality/value The proposed study has a hypothesised research design to show the effects of FL on the financial behaviour and welfare of rural women entrepreneurs. Although FL is often related to FWB, this paper takes a new perspective by examining mediating role of personal financial behaviour.