Exploring the Reluctance of Female Entrepreneurs in Securing Formal Financial Credit: A Quantitative Analysis in Pakistan's Tourism Sector

Purpose This paper aims to elucidate the misconception regarding the reluctance of female entrepreneurs in Pakistan to seek formal financial credit for business growth. Methodology Data was collected through a five-point Likert scale questionnaire using snowball sampling, targeting female entrepreneurs in Pakistan's tourism industry. With a response rate of 84%, the majority of respondents were from urban areas. Structural equation modeling (SEM) was conducted using SMART PLS for data analysis. Findings The study shows that subjective perception factors, such as fear of failure, perceived difficulties, and lack of confidence, significantly influence female entrepreneurs' reduced focus on formal financial credit. Using PLS-SEM, the research confirms that these factors not only directly impact financial decision-making, but also serve as mediators between personal challenges and financial behaviors. Constructs like lack of fit and risk aversion also affect financial decisions, underscoring the importance of addressing these perceptions to enhance access to formal credit for female entrepreneurs. Conclusion This study challenges the myth about the personality traits of female entrepreneurs and highlights the factors contributing to their hesitation in seeking formal financial credit. The findings are significant for both academic research and practical applications, offering valuable insights for female entrepreneurs in the tourism industry.