Financial Knowledge and Financial Behavior:A Mediational Study of Agri-Allied Entrepreneurship

It is argued that lack of cultural factors deprives the sustainability discourse in policymaking which leads to scheme failure and suicides as is evident in the agricultural financing of farmers in India. Against this backdrop, the study contributes in enhancing the effectiveness of credit-financing schemes and acts as a hedge against the possible negative outcomes. Hence, this research is an attempt to study the relationship between financial knowledge, cultural values and financial behavior in the view of recent entrepreneurial financing schemes. The schemes were introduced recently in Jammu & Kashmir however, little emphasis was put on the information regarding the management of finances hence the increased default rates of these schemes. Therefore, data were collected through a structured questionnaire from 200 respondents (who had availed the scheme) through the random sampling technique. Further analysis of collected data was performed through statistical software and Structural Equational Modeling. The findings revealed that lower financial literacy among respondents led to low financial behavior which is further reinforced by cultural values. Furthermore, it was identified that the Financial Knowledge has a significant positive impact on Financial Behavior and Cultural Values partially mediate the impact.