Impact of Financial Literacy and Risk Perception on Investment Decision: A SEM Study of the Lucknow and Kanpur Districts in Uttar Pradesh, India
Sandeep Kumar Rawat1, Sneha Kumari Vishwakarma2, Roshni Kumari3, Shweta Yadav4
1Dr. Sandeep Kumar Rawat, Assistant Professor, Department of Commerce, Har Sahai P.G. College, Kanpur Nagar (U.P.), India.
2Ms Sneha Kumari Vishwakarma, Assistant Professor, Department of Commerce at Har Sahai P.G. College, Kanpur Nagar (U.P.), India.
3Ms Roshni Kumari, Research Scholar, Department of Commerce, Har Sahai P.G. College, Kanpur Nagar, (U.P.), India.
4Ms Shweta Yadav, Research Scholar, Department of Commerce at Har Sahai P.G. College, Kanpur Nagar, (U.P.), India.
Manuscript received on 27 May 2026 | First Revised Manuscript received on 30 May 2026 | Second Revised Manuscript received on 06 June 2026 | Manuscript Accepted on 15 June 2026 | Manuscript published on 30 June 2026 | PP: 1-9 | Volume-12 Issue-10, June 2026 | Retrieval Number: 100.1/ijmh.J188212100726 | DOI: 10.35940/ijmh.J1882.12100626
Open Access | Editorial and Publishing Policies | Cite | Zenodo | OJS | Indexing and Abstracting
© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
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.
Keywords: Financial Literacy, Risk Perception, Investment Decision, Behavioural Finance, Structural Equation Modelling.
Scope of the Article: Business Models