Author: K. Beema Rao
DOI Link: https://doi.org/10.70798/Bijmrd/04060005
Abstract: Financial literacy has become an essential factor in enabling individuals to make informed financial decisions and achieve long-term financial well-being. In today’s dynamic financial environment, investors are presented with a wide range of investment opportunities that require adequate financial knowledge, positive financial attitudes, and sound decision-making skills. This study examines the influence of financial literacy on the investment behaviour of individual investors in Tiruchirappalli City. The findings reveal that financial literacy has a significant positive influence on investment behaviour. The correlation analysis indicates a strong positive relationship between financial literacy and investment behaviour (r = 0.712, p < 0.001). The Chi-square analysis shows that age, occupation, monthly income, and investment experience have significant associations with investment behaviour, whereas gender and educational qualification do not exhibit statistically significant relationships. The SEM results further confirm that financial literacy positively influences financial attitude and investment behaviour, while financial attitude partially mediates the relationship between financial literacy and investment behaviour. The structural model demonstrates a good model fit and explains a substantial proportion of the variance in investment behaviour. The study concludes that financially literate investors are more likely to make rational investment decisions, diversify their investment portfolios, manage financial risks effectively, and achieve better financial outcomes. The findings highlight the importance of strengthening financial education and investor awareness programmes through educational institutions, financial institutions, government agencies, and regulatory bodies. Enhancing financial literacy among individual investors will contribute to improved investment practices, greater financial inclusion, and sustainable economic development.
Keywords: Financial Literacy, Investment Behaviour, Individual Investors, Financial Attitude, Investment Experience, Structural Equation Modelling (SEM), Tiruchirappalli City.
Page No: 37-56