Examine the Relationship between Financial Literacy and Risk-Taking Propensity on Women Entrepreneurship in Pakistan

Abstract

The purpose of this research is to explore the relationship between financial literacy and risk- taking propensity on women entrepreneurship in Pakistan. Employing a quantitative research design, this study analyzes data collected from a large sample of women entrepreneurs of SMEs in Pakistan. 221 responses were collected using a questionnaire. Responses were collected from the women entrepreneurs of SMEs in Pakistan. The questionnaire was based on 5-Likert scale. The data collected was analyzed by statistical test with the help of SPSS Software. To determine whether these variables are related to one another and have associations, correlation analysis is used. This analysis helps to identify any significant correlations or patterns between the variables. Furthermore, regression analysis is also used to examine the relationship between financial literacy factors predicts the women entrepreneurship including risk-taking propensity. The results of correlation analysis have demonstrated a positive relationship between financial literacy, risk-taking propensity and women entrepreneurship. The results of regression analysis have demonstrated that financial knowledge, and financial management skills have significant impact on women entrepreneurship in Pakistan. The risk-taking propensity as a mediator between the financial literacy and women entrepreneurship was examined using the multiple regression analysis. The result demonstrated from multiple regression shows that risk-taking propensity positively mediates the relationship between financial knowledge, financial management skills and women entrepreneurship in Pakistan. These findings suggest that financial literacy not only enhance risk-taking propensity but also play a crucial role in promoting entrepreneurial engagement among women.