Unlocking the Interplay among Financial Capability, Risk-taking Ability and Financial Well-being: Insights from Women in Sri Lanka

Abstract

Aims: The present empirical study sought to investigate the interconnections among financial capability, risk-taking ability, and financial well-being for women from a Sri Lankan perspective. Methodology: the study follows a quantitative deductive methodology. The study sample includes working women who belong to the formal sector in Sri Lanka and the respondents were selected using a purposive sampling method. Data were gathered from 198 participants through an online survey utilizing Google Forms. The study employed descriptive statistics, Pearson’s correlation, and PROCESS Macro regression models to test the hypotheses. Results and Conclusion: The study found significant relationships between women's financial capability, risk-taking ability, and financial well-being. Furthermore, it was also established that risk-taking ability partially mediates the relationship between financial capability and financial well-being. Practical Implications: The findings of a study highlight that, by fostering a balance between financial capability and responsible risk-taking, practitioners can better equip individuals to make informed financial decisions which in turn improves the long-term financial well-being of employed women. Originality: This is one of the first studies in financial well-being literature, that investigates the mediating role of risk-taking ability on the financial well-being of women in the context of Sri Lanka where a majority of the studies focus on the respondents in general while ignoring the risk component.