Financial stress among female entrepreneurs in Nigeria: The buffering effect of financial literacy

https://doi.org/10.35912/jgas.v5i1.2617
Published: Mar 21, 2025

Abstract:

Purpose: As financial stress considerably hinders the success and sustainability of female entrepreneurs in Nigeria, this is exacerbated by financial illiteracy, which leaves many unable to manage their business finances effectively. In view of the above problem, this study examines how financial literacy affects financial stress among female entrepreneurs in Nigeria.

Methods: This study used a descriptive survey research design. The sample consisted of 285 female entrepreneurs selected from a population of 994 female entrepreneurs in Ebonyi State. Primary data were collected using a structured questionnaire. Ordinal regression analysis was conducted to test the hypotheses.

Results: The use of financial products and services significantly reduces financial stress (?1 = -0.413391; p-value = 0.0261), budgeting significantly reduces financial stress (?2 = -0.080064; p-value = 0.0364), and emergency fund creation significantly reduces financial stress (?3 = -0.226254; p-value = 0.0094).

Conclusion: Financial literacy mitigates the challenges of financial stress by empowering women with the knowledge and skills required to make informed financial decisions.

Limitations: The study was limited to female entrepreneurs in Ebonyi State, which may not be representative of other regions or genders.

Contributions: This study is useful in the fields of entrepreneurship, finance, and gender studies, particularly for policymakers, financial educators, and organizations that support female entrepreneurs.

Recommendation: The Nigerian Ministry of Commerce, Industry, and Business Development should initiate entrepreneurial financial literacy programs incorporating practical tools, such aThe s interactive workshops on budget management, digital budgeting applications, and real-life case studies, to enhance budgeting skills among female entrepreneurs.

Keywords:
1. Financial Literacy
2. Financial Stress
3. Female Entrepreneurs
Authors:
1 . Christopher Chinedu Onochie
Nnamdi Azikiwe University, Awka, Anambra State, Nigeria
2 . Gilbert Ogechukwu Nworie
Nnamdi Azikiwe University, Awka, Anambra State, Nigeria
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Onochie, C. C., & Nworie, G. O. (2025). Financial stress among female entrepreneurs in Nigeria: The buffering effect of financial literacy. Journal of Governance and Accountability Studies, 5(1), 47–62. https://doi.org/10.35912/jgas.v5i1.2617
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Vol. 5 No. 1 (2025): January
Articles
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References

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    Andriamahery, A., & Qamruzzaman, M. (2022). Do access to finance, technical know-how, and financial literacy offer women empowerment through women’s entrepreneurial development? Frontiers in Psychology, 12, 776844. doi:https://doi.org/10.3389/fpsyg.2021.776844

    Anoke, A. F. (2023). Microfinance services and the growth of women entrepreneurial businesses in North Central Nigeria. International Journal of Financial, Accounting, and Management, 4(4), 379-393. doi:https://doi.org/10.35912/ijfam.v4i4.1106

    Atanda, O. O. (2023). Financial literacy and financial resilience: the mediating role of financial capability. Journal of Namibian Studies: History Politics Culture, 35, 2998-3024. doi:https://doi.org/10.59670/jns.v35i.4483

    Biggs, A., Brough, P., & Drummond, S. (2017). Lazarus and Folkman's psychological stress and coping theory. The handbook of stress and health: A guide to research and practice, 349-364. doi:https://doi.org/10.1002/9781118993811.ch21

    Desai, A. D., Sensarma, R., & Thomas, A. (2024). Roles of financial literacy and entrepreneurial orientation in economic empowerment of rural women entrepreneurs. Oxford Development Studies, 52(3), 243-260. doi:https://doi.org/10.1080/13600818.2024.2403066

    Despard, M. R., Friedline, T., & Martin-West, S. (2020). Why do households lack emergency savings? The role of financial capability. Journal of Family and Economic Issues, 41, 542-557. doi:https://doi.org/10.1007/s10834-020-09679-8

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    Iram, T., Bilal, A. R., & Latif, S. (2024). Is awareness that powerful? Women’s financial literacy support to prospects behaviour in prudent decision-making. Global Business Review, 25(5), 1356-1381. doi:https://doi.org/10.1177/22779752221097194

    Ismail, N., & Zaki, N. D. A. (2019). Does financial literacy and financial stress effect the financial wellness. International Journal of Modern Trends in Social Sciences, 2(8), 1-11. doi:https://doi.org/10.35631/IJMTSS.28001

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    Lim, T., Thompson, J., Tian, L., & Beck, B. (2023). A transactional model of stress and coping applied to cyclist subjective experiences. Transportation research part F: traffic psychology and behaviour, 96, 155-170. doi:https://doi.org/10.1016/j.trf.2023.05.013

    Malik, N. I. S. A., Razak, M. R. A., & Said, A.-M. A. (2023). The Necessity of Financial Literacy for Women Business Triumph: A Qualitative Study. International Journal of Management, Finance and Accounting, 4(2), 161-185. doi:https://doi.org/10.33093/ijomfa.2023.4.2.8

    Mbowa, H. S., Businge, M. P., Ssemaluulu, P., & Eton, M. (2023). Effect of women empowerment on women-owned business performance in Wakiso District, Uganda. International Journal of Financial, Accounting, and Management, 5(3), 343-358. doi:https://doi.org/10.35912/ijfam.v5i3.1687

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    Meshack, A., Orji, M. G., & Ogechukwu, N. G. (2022). Poverty Reduction in Awka Metropolis: The Role of Entrepreneurship Productivity. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 2(4), 244-262. doi:https://doi.org/10.33258/economit.v2i3.794

    Nworie, G. O., Odah, U., & Nworie, F. N. (2024). Managing the Challenges of Digitisation and a Contemporary Business Issue at Coca-Cola. International Journal of Academic Accounting, Finance & Management Research, 8(11), 129-133.

    Nworie, G. O., Okafor, T. G., Igwebuike, C. C., & Onyali, C. I. (2023). Utilizing Cost-Volume-Profit Analysis for Informed Decision Making in Small Business Management. Central Asian Journal of Innovations on Tourism Management and Finance, 4(2), 102-115. doi:https://doi.org/10.17605/OSF.IO/R3AT4

    Nworie, G. O., & Onochie, C. C. (2024). Fuelling Entrepreneurial Productivity in Nigeria: The Contribution Of Bank Loans. International Journal of Entrepreneurship and Business Innovation, 7(3), 92-109. doi:10.52589/IJEBI-XQGMW7DI

    Nwuzor, C., & Nkwede, J. O. (2023). Impact of Rural-Urban Migration on Infrastructural Development in Nigeria: The Ebonyi State Rural Communities Experience. SOUTH EAST JOURNAL OF POLITICAL SCIENCE, 9(2).

    O'Neill, B., Xiao, J. J., & Ensle, K. (2017). Positive health and financial practices: Does budgeting make a difference? Journal of Family & Consumer Sciences, 109(2), 27-36. doi:https://doi.org/10.14307/JFCS109.2.27

    Obianuju, M. C., & Nworie, G. O. (2024). Assessing The Influence of Entrepreneurial Self-Employment on Human Development Index in Nigeria. Journal of the Management Sciences, 61(6), 141-156.

    Ogbu, V. O., Okolie, J., & Nnubuogu, A. K. E. (2021). Influence of Culture and Socio-Economic Factor on Female Entrepreneurship in Enugu State. British International Journal of Applied Economics, Finance and Accounting, 5(5).

    Oggero, N., Rossi, M. C., & Ughetto, E. (2020). Entrepreneurial spirits in women and men. The role of financial literacy and digital skills. Small Business Economics, 55, 313-327. doi:https://doi.org/10.1007/s11187-019-00299-7

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    Tanggamani, V., Rahim, A., Bani, H., & Alias, N. A. (2024). Elevating Financial Literacy Among Women Entrepreneurs: Cognitive Approach of Strong Financial Knowledge, Financial Skills and Financial Responsibility. Information Management and Business Review, 16(1 (I)), 279-286. doi:https://doi.org/10.22610/imbr.v16i1(I).3718

    Udodiugwu, M. I., Eneremadu, K. E., Njoku, C. O., Obiakor, U. J., & Ilonze, U. G. (2025). Advocacy for human capital development through entrepreneurship education: Preparing undergraduates towards self-employment. Journal of Sustainable Tourism and Entrepreneurship, 6(2), 141-159. doi:https://doi.org/10.35912/joste.v6i2.2479

    Zhang, Y., & Chatterjee, S. (2023). Financial well-being in the United States: The roles of financial literacy and financial stress. Sustainability, 15(5), 4505. doi:https://doi.org/10.3390/su15054505

  1. Abu Shosha, G. M., & Al?Kalaldeh, M. (2020). The transactional model of stress and coping as guidance for understanding adolescent patients' experience with thalassemia: Case report. Journal of Child and Adolescent Psychiatric Nursing, 33(1), 49-54. doi:https://doi.org/10.1111/jcap.12259
  2. Andriamahery, A., & Qamruzzaman, M. (2022). Do access to finance, technical know-how, and financial literacy offer women empowerment through women’s entrepreneurial development? Frontiers in Psychology, 12, 776844. doi:https://doi.org/10.3389/fpsyg.2021.776844
  3. Anoke, A. F. (2023). Microfinance services and the growth of women entrepreneurial businesses in North Central Nigeria. International Journal of Financial, Accounting, and Management, 4(4), 379-393. doi:https://doi.org/10.35912/ijfam.v4i4.1106
  4. Atanda, O. O. (2023). Financial literacy and financial resilience: the mediating role of financial capability. Journal of Namibian Studies: History Politics Culture, 35, 2998-3024. doi:https://doi.org/10.59670/jns.v35i.4483
  5. Biggs, A., Brough, P., & Drummond, S. (2017). Lazarus and Folkman's psychological stress and coping theory. The handbook of stress and health: A guide to research and practice, 349-364. doi:https://doi.org/10.1002/9781118993811.ch21
  6. Desai, A. D., Sensarma, R., & Thomas, A. (2024). Roles of financial literacy and entrepreneurial orientation in economic empowerment of rural women entrepreneurs. Oxford Development Studies, 52(3), 243-260. doi:https://doi.org/10.1080/13600818.2024.2403066
  7. Despard, M. R., Friedline, T., & Martin-West, S. (2020). Why do households lack emergency savings? The role of financial capability. Journal of Family and Economic Issues, 41, 542-557. doi:https://doi.org/10.1007/s10834-020-09679-8
  8. Ebuka, A. A., Nzewi, H. N., Gerald, E., & Ezinne, K. M. (2020). Digital literacy in a post Coronavirus era: a management perspective for small businesses in Africa. Annals of Management and Organization Research, 1(3), 203-212. doi:https://doi.org/10.35912/amor.v1i3.410
  9. Ezu, A. B., Jibrin, M. B., & Abdul, I. (2024). Entrepreneurship Education and Financial Insecurity in Nigeria: Empowering Individuals for Economic Resilience. FUOYE JOURNAL OF EDUCATIONAL MANAGEMENT, 1(2).
  10. Gauron, G. A. (2024). Women Entrepreneurs and Financial Literacy in the United States. City University of Seattle.
  11. Ilodilibe, L., Nworie, G., & Onwuka, E. (2024). Artificial Intelligence and Lean Entrepreneurship among Selected Manufacturing Firms in Nigeria. 11-22.
  12. Iram, T., Bilal, A. R., Ahmad, Z., & Latif, S. (2023). Does financial mindfulness make a difference? A nexus of financial literacy and behavioural biases in women entrepreneurs. IIM Kozhikode Society & Management Review, 12(1), 7-21.
  13. Iram, T., Bilal, A. R., & Latif, S. (2024). Is awareness that powerful? Women’s financial literacy support to prospects behaviour in prudent decision-making. Global Business Review, 25(5), 1356-1381. doi:https://doi.org/10.1177/22779752221097194
  14. Ismail, N., & Zaki, N. D. A. (2019). Does financial literacy and financial stress effect the financial wellness. International Journal of Modern Trends in Social Sciences, 2(8), 1-11. doi:https://doi.org/10.35631/IJMTSS.28001
  15. Jayasekara, B. (2023). Impact of Financial Capability on Financial Stress of Small and Medium Entrepreneurs in Sri Lanka: Special Reference to the Western Province. Kelaniya Journal of Management, 12(2). doi:https://doi.org/10.4038/kjm.v12i2.7735
  16. Kamarudin, N. S., Ramli, N. A., & Rasedee, A. F. N. (2018). Why Preparing An Emergency Fund Is Matter To Young Adults? International Journal of Engineering and Technologies, 7(4), 172-175. doi:https://doi.org/10.14419/ijet.v7i4.28.22574
  17. Kandolo, K. M. (2023). The impact of financial knowledge on the economic empowerment of women entrepreneurs in KwaZulu-Natal, South Africa.
  18. Khan, F., Siddiqui, M. A., & Imtiaz, S. (2022). Role of financial literacy in achieving financial inclusion: A review, synthesis and research agenda. Cogent Business & Management, 9(1), 2034236. doi:https://doi.org/10.1080/23311975.2022.2034236
  19. Khan, M. R., Khan, A., Iqbal, M. S., Zia-UR-Rehman, M., & Baig, S. A. (2022). Improving Female Entrepreneur through Financial Literacy. Pacific Business Review International, 15(6).
  20. Kinyanjui, J. W., & Ocholla, D. (2024). Financial Literacy Amongst Women Entrepreneurs for Economic Empowerment in Kenya Information, Knowledge, and Technology for Teaching and Research in Africa: Information Behavior in Knowledge and Economy (pp. 53-83): Springer.
  21. Kleine, A.-K., Schmitt, A., & Wisse, B. M. (2024). Financial stress and quit intention: the mediating role of entrepreneurs’ affective commitment. International Entrepreneurship and Management Journal, 1-24. doi:https://doi.org/10.1007/s11365-024-00972-8
  22. Lee, S. T., & Hanna, S. D. (2022). What, me worry? Financial knowledge overconfidence and the perception of emergency fund needs. Journal of Financial Counseling and Planning, 33(1), 140-155. doi:https://doi.org/10.1891/JFCP-2021-0045
  23. Lim, T., Thompson, J., Tian, L., & Beck, B. (2023). A transactional model of stress and coping applied to cyclist subjective experiences. Transportation research part F: traffic psychology and behaviour, 96, 155-170. doi:https://doi.org/10.1016/j.trf.2023.05.013
  24. Malik, N. I. S. A., Razak, M. R. A., & Said, A.-M. A. (2023). The Necessity of Financial Literacy for Women Business Triumph: A Qualitative Study. International Journal of Management, Finance and Accounting, 4(2), 161-185. doi:https://doi.org/10.33093/ijomfa.2023.4.2.8
  25. Mbowa, H. S., Businge, M. P., Ssemaluulu, P., & Eton, M. (2023). Effect of women empowerment on women-owned business performance in Wakiso District, Uganda. International Journal of Financial, Accounting, and Management, 5(3), 343-358. doi:https://doi.org/10.35912/ijfam.v5i3.1687
  26. Mensah, M. S. B., Danquah, J. K., & Aidoo-Anderson, B. J. (2024). Challenges of Female Entrepreneurship in Africa: Towards a Typology of Stakeholder Salience Stakeholder Management and Entrepreneurship in Africa (pp. 103-129): Routledge.
  27. Meshack, A., Orji, M. G., & Ogechukwu, N. G. (2022). Poverty Reduction in Awka Metropolis: The Role of Entrepreneurship Productivity. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 2(4), 244-262. doi:https://doi.org/10.33258/economit.v2i3.794
  28. Nworie, G. O., Odah, U., & Nworie, F. N. (2024). Managing the Challenges of Digitisation and a Contemporary Business Issue at Coca-Cola. International Journal of Academic Accounting, Finance & Management Research, 8(11), 129-133.
  29. Nworie, G. O., Okafor, T. G., Igwebuike, C. C., & Onyali, C. I. (2023). Utilizing Cost-Volume-Profit Analysis for Informed Decision Making in Small Business Management. Central Asian Journal of Innovations on Tourism Management and Finance, 4(2), 102-115. doi:https://doi.org/10.17605/OSF.IO/R3AT4
  30. Nworie, G. O., & Onochie, C. C. (2024). Fuelling Entrepreneurial Productivity in Nigeria: The Contribution Of Bank Loans. International Journal of Entrepreneurship and Business Innovation, 7(3), 92-109. doi:10.52589/IJEBI-XQGMW7DI
  31. Nwuzor, C., & Nkwede, J. O. (2023). Impact of Rural-Urban Migration on Infrastructural Development in Nigeria: The Ebonyi State Rural Communities Experience. SOUTH EAST JOURNAL OF POLITICAL SCIENCE, 9(2).
  32. O'Neill, B., Xiao, J. J., & Ensle, K. (2017). Positive health and financial practices: Does budgeting make a difference? Journal of Family & Consumer Sciences, 109(2), 27-36. doi:https://doi.org/10.14307/JFCS109.2.27
  33. Obianuju, M. C., & Nworie, G. O. (2024). Assessing The Influence of Entrepreneurial Self-Employment on Human Development Index in Nigeria. Journal of the Management Sciences, 61(6), 141-156.
  34. Ogbu, V. O., Okolie, J., & Nnubuogu, A. K. E. (2021). Influence of Culture and Socio-Economic Factor on Female Entrepreneurship in Enugu State. British International Journal of Applied Economics, Finance and Accounting, 5(5).
  35. Oggero, N., Rossi, M. C., & Ughetto, E. (2020). Entrepreneurial spirits in women and men. The role of financial literacy and digital skills. Small Business Economics, 55, 313-327. doi:https://doi.org/10.1007/s11187-019-00299-7
  36. Özer, G., Kutbay, A., & Ozbek, V. (2017). The Effects Of Budgeting, Saving And Compulsive Buying On Financial Well-being Of Individuals. Route Educational and Social Science Journal, 4, 175-185.
  37. Peter, W. (2021). Financial Barriers and Response Strategies to Support Women Entrepreneurs in Rural Nigeria. Université d'Ottawa/University of Ottawa.
  38. Putra, J. M., Karundeng, D. R., Gofur, A., Tresnadjaja, R., Suhara, A., Sukmayadi, S., & Sopyan, A. (2024). Entrepreneurship in the era of society 5.0: Navigating digitalization for innovation and growth. Journal of Sustainable Tourism and Entrepreneurship, 6(1), 1-13. doi:https://doi.org/10.35912/joste.v6i1.2224
  39. Tanggamani, V., Rahim, A., Bani, H., & Alias, N. A. (2024). Elevating Financial Literacy Among Women Entrepreneurs: Cognitive Approach of Strong Financial Knowledge, Financial Skills and Financial Responsibility. Information Management and Business Review, 16(1 (I)), 279-286. doi:https://doi.org/10.22610/imbr.v16i1(I).3718
  40. Udodiugwu, M. I., Eneremadu, K. E., Njoku, C. O., Obiakor, U. J., & Ilonze, U. G. (2025). Advocacy for human capital development through entrepreneurship education: Preparing undergraduates towards self-employment. Journal of Sustainable Tourism and Entrepreneurship, 6(2), 141-159. doi:https://doi.org/10.35912/joste.v6i2.2479
  41. Zhang, Y., & Chatterjee, S. (2023). Financial well-being in the United States: The roles of financial literacy and financial stress. Sustainability, 15(5), 4505. doi:https://doi.org/10.3390/su15054505