The Role of Financial Literacy in Building Entrepreneurial Resilience among Rural Women

Abstract

Financial literacy has emerged as a decisive determinant of entrepreneurial success, particularly for populations that have historically been excluded from formal financial systems. Rural women, who constitute a significant share of the informal entrepreneurial workforce in developing economies, continue to face structural barriers such as limited access to credit, low levels of financial education, restrictive social norms, and inadequate institutional support. This paper examines the relationship between financial literacy and entrepreneurial resilience among rural women, conceptualising resilience as the capacity to anticipate, absorb, and adapt to economic shocks while sustaining livelihood activities. Drawing on a review of theoretical frameworks and empirical literature, the paper argues that financial literacy operates through multiple pathways—improved financial decision-making, enhanced risk management, greater access to formal financial services, and strengthened psychological confidence—to build resilience among rural women entrepreneurs. The paper further discusses the moderating influence of self-help groups, microfinance institutions, and government schemes in translating financial knowledge into entrepreneurial action. Based on the findings, the paper proposes a conceptual framework linking financial literacy to entrepreneurial resilience and offers policy recommendations for strengthening financial education programmes tailored to rural women. The study concludes that financial literacy, while necessary, is not sufficient on its own; it must be complemented by accessible financial infrastructure, social capital, and enabling policy environments to translate into sustained entrepreneurial resilience.