PurposeThis study examines the interrelations among educational level, financial literacy, financial inclusion and informal financial business practices of female entrepreneurs in Lima, Peru, focusing on their intentions toward business formalization. Additionally, it explores the influence of legal formalization on both business formality and tendencies toward informality intentions.Design/methodology/approachThe methodology involved a self-administered survey among 118 female entrepreneurs in the small vendor “Bodega” sector, with statistical analysis conducted via partial least structural equation modeling.FindingsThe study’s outcomes validated the significant role of financial literacy and inclusion as mediators between educational level and formalization intentions. Notably, legal formalization did not significantly alter these dynamics.Research limitations/implicationsLimitations arise from the study’s explanatory power and lack of predictive capability for all dependent variables, likely due to sample specificity. Additionally, the quantitative research approach does not allow for a deeper understanding of these phenomena.Practical implicationsWe advocate reevaluating prevailing attitudes toward legal formality and informal practices, emphasizing tailored public policies for older female entrepreneurs and access to formal financing independent of legal registration. This underscores the need for enhanced educational levels for young women and coordinated efforts among institutional actors to more effectively promote formality.Originality/valueThis research contributes original insights into the emphasis on informal practices over mere legal registration, especially pertinent to female entrepreneurship. It also highlights the counterintuitive significant inverse relationship between age and formalization intentions, enriching the discourse on entrepreneurial motivation.
