FINANCIAL LITERACY AND PERSONAL FINANCIAL BEHAVIOUR AS DRIVERS OF FINANCIAL RESILIENCE AMONG MICROENTREPRENEURS
Abstract
Microentrepreneurs constitute a vital yet financially vulnerable segment of emerging economies. This study examines the antecedents of financial resilience among microentrepreneurs by analysing the direct effects of financial literacy and personal financial behaviour, as well as the mediating role of personal financial behaviour in the financial literacy and financial resilience relationship. Using a cross-sectional survey of 300 Microenterprise owners in Khulna City, Bangladesh, the study employed Partial Least Squares Structural Equation Modelling to test the proposed relationships. The results indicate that financial literacy has a strong and statistically significant positive effect on financial resilience. Financial literacy also exerts a strong positive influence on personal financial behaviour. Although the direct effect of personal financial behaviour on financial resilience is positive, it is not statistically significant at conventional levels, while the indirect effect of financial literacy on financial resilience through personal financial behaviour is statistically significant, indicating partial mediation. These findings suggest that financial literacy is a key driver of resilience among microentrepreneurs and that improved financial behaviour can serve as a complementary channel through which knowledge is translated into resilience. The study contributes to the literature on entrepreneurial finance and financial capability by providing empirical evidence from Bangladesh, a context in which microentrepreneurs face structural financial constraints and heightened exposure to shocks. The findings have practical implications for policymakers, microfinance institutions, and development agencies seeking to design targeted financial education and behaviour-oriented support programmes for microentrepreneurs.
JEL: G53, D14, L26, O12, M21
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DOI: http://dx.doi.org/10.46827/ejefr.v10i4.2230
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