Financial Literacy, Risk Perception, and Government Scheme Awareness: A Multiple Mediation Model of Investment Decisions Among Women Entrepreneurs in India

Women entrepreneurs account for a growing share of India’s micro, small, and medium enterprises, yet face greater barriers to formal capital than men, and little is known about how financial literacy, risk perception, and awareness of government financing schemes (MUDRA, Stand-Up India, and PMEGP) shape their access to capital and the quality of their investment decisions. The study examines whether these three factors influence access to capital, and whether access to capital mediates their effects on investment decision quality. This study employs cross-sectional survey data from 298 women entrepreneurs in eight states across four regions of India, collected through a structured questionnaire and analyzed using partial least squares structural equation modeling in SmartPLS 4 with 5,000 bootstrap resamples. The results show that risk perception (β = 0.273), government scheme awareness (β = 0.245), and financial literacy (β = 0.180) positively predict access to capital, which in turn strongly predicts investment decision quality (β = 0.483), with all paths significant at p < .001. The indirect effects through access to capital are significant for risk perception (β = 0.132), scheme awareness (β = 0.118), and financial literacy (β = 0.087), and the model explains 22.6% of the variance in access to capital and 23.3% in investment decision quality. The findings suggest that all seven hypothesized relationships are supported, that risk perception is the strongest and financial literacy the weakest antecedents of access to capital, and that access to capital is the channel through which the three antecedents improve investment decision quality. JEL Classification Codes: G41, G53, H81, J16, L26.