Impact of Financial Literacy on Entrepreneurial Success: A Study at the University Level among Students of Higher Education Institutions

Abstract

Financial literacy is increasingly recognized as a key determinant of entrepreneurial success among university students. In higher education institutions, it plays a vital role in shaping students’ ability to manage financial resources effectively for sustainable business development. The objectives of the study were to examine the level of financial literacy among university students, to investigate the relationship between financial literacy and entrepreneurial success, and to assess the impact of financial literacy on entrepreneurial decision-making and business performance. The study adopted a quantitative, descriptive, and correlational research design based on a positivist research philosophy. The population of the study consisted of approximately 12,500 students enrolled in business-related programs across higher education institutions in Islamabad. A sample of 370 students was selected using stratified random sampling technique to ensure representation from different universities and academic disciplines. The research tool was a structured questionnaire consisting of Likert-scale items measuring financial literacy and entrepreneurial success. Validity of the instrument was ensured through expert review, while reliability was confirmed using Cronbach’s Alpha (α ≥ 0.70) based on a pilot study. Data were analyzed using SPSS, applying descriptive statistics, Pearson correlation, and regression analysis to test hypotheses. The first objective revealed that university students possess a moderate level of financial literacy, particularly stronger in budgeting skills but weaker in investment knowledge, and it was recommended that universities introduce compulsory financial literacy courses and practical training programs to strengthen students’ financial competencies. The significance of the study lies in its contribution to policymakers, educators, and curriculum developers by highlighting the importance of integrating financial literacy into entrepreneurship education to enhance students’ entrepreneurial success and business sustainability in higher education institutions.