Financial Literacy Meets Inclusion: The Dual Pillars of Entrepreneurial Success in Kerala's MUDRA Scheme

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Year	2025
Volume/Issue/Review Month	Volume-XVIII \| Issue-I \| Jan.-Jun.
Title	Financial Literacy Meets Inclusion: The Dual Pillars of Entrepreneurial Success in Kerala's MUDRA Scheme
Authors	Ashadevi. M, Dr. Anil.P.V
Broad area	Finance
Abstract	Abstract: This study examines the impact of financial literacy on the business performance of MUDRA scheme beneficiaries engaging in entrepreneurship in Kerala and investigates the mediating role played by financial inclusion. The factors of financial inclusion and financial literacy are also understood as the main determinants of an entrepreneur’s success; thus, this research examines how the financial knowledge of an entrepreneur contributes to his business performance and how the extent of financial inclusion strengthens this relationship. The sample comprised 240 entrepreneurs from Kerala, with 60 entrepreneurs selected from each of the following financial institutions: Public sector bank – State Bank of India (SBI), private sector bank – Federal Bank, regional rural bank – Kerala Gramin Bank, and small finance bank – ESAF Small Finance Bank. Using this approach, institutional support can be represented in diverse ways. To analyse the data, this study uses Structural Equation Modelling (SEM) to explore direct and mediated effects. These findings contribute to a better understanding of how financial literacy affects business performance and how financial inclusion is an important factor in promoting entrepreneurial success. This research identifies strategies for integrating financial literacy and inclusion to inform policymakers, financial institutions, and practitioners on their valuable implications for helping promote the growth and sustainability of small enterprises under the MUDRA scheme in Kerala.
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