Self Help Groups Members’ Religious Perception and their Relationship between Financial Literacy and Repayment Intention towards Loan: Considerable Focus on Himachal Pradesh (H.P)

Abstract

The intent of this study is to create a comprehensive model that can identify various factors and examine the impact of financial literacy on loan repayment intentions among members of SHGs in Himachal Pradesh. A conceptual model has been put forward and its validity has been confirmed. In addition to this, a total of 500 questionnaires were distributed, out of which 372 were considered usable. The stability of the proposed model and the testing of research hypotheses were conducted using structural equation modelling. The findings indicate that financial awareness and financial skills are strong predictors of loan repayment intention among SHG members. On the other hand, financial knowledge and financial skills have a relatively weak influence on loan repayment intentions. The results and observations from the interaction with responders indicate that there is a moderate level of importance placed on financial literacy among members of SHGs. An important factor in reducing the rate of outstanding loans in SHGs is the need for members to enhance their financial understanding.