Impact of Financial Literacy and Risk Perception on Investment Decision: A SEM Study of the Lucknow and Kanpur Districts in Uttar Pradesh, India

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Published: 30-06-2026
DOI: https://doi.org/10.35940/ijmh.J1882.12100626
Keywords:
Financial Literacy, Risk Perception, Investment Decision, Behavioural Finance, Structural Equation Modelling

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Dr. Sandeep Kumar Rawat
Assistant Professor, Department of Commerce, Har Sahai P.G. College, Kanpur Nagar (U.P.), India.
https://orcid.org/0000-0003-0706-1271
Ms Sneha Kumari Vishwakarma
Assistant Professor, Department of Commerce at Har Sahai P.G. College, Kanpur Nagar (U.P.), India.
https://orcid.org/0009-0006-6583-2432
Ms Roshni Kumari
Research Scholar, Department of Commerce, Har Sahai P.G. College, Kanpur Nagar, (U.P.), India.
https://orcid.org/0009-0006-6486-0474
Ms Shweta Yadav
Research Scholar, Department of Commerce at Har Sahai P.G. College, Kanpur Nagar, (U.P.), India.
https://orcid.org/0009-0009-5524-7506

Abstract

The current study uses a Structural Equation Modelling (SEM) approach to analyse and develop a model, i.e., the impact of financial literacy and risk perception on investment decisions. Primary data were collected from respondents in Lucknow and Kanpur and were investigated using factor analysis and SEM. The results disclose a strong three-factor structure explaining 79.46% of the total variance, depicting strong construct validity. The structural model indicates that financially literate investors can perceive risk and make investment decisions judiciously. Moreover, risk perception is strongly influenced by financial literacy, emphasising its indirect impact on investment choices.

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Article Details

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Vol. 12 No. 10 (2026): Volume-12 Issue-10, June 2026

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CC-BY-NC-ND 4.0

How to Cite

[1]
Dr. Sandeep Kumar Rawat, Ms Sneha Kumari Vishwakarma, Ms Roshni Kumari, and Ms Shweta Yadav , Trans., “Impact of Financial Literacy and Risk Perception on Investment Decision: A SEM Study of the Lucknow and Kanpur Districts in Uttar Pradesh, India”, IJMH, vol. 12, no. 10, pp. 1–9, Jun. 2026, doi: 10.35940/ijmh.J1882.12100626.
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