Financial Literacy and Investment decisions of Investors of Islamic Banks in Pakistan: The Role of Intention to invest and Religiosity

Document Type : Research Paper

Authors

1 Department of Business, Faculty of Management Science-KASB, Institute of Technology-Karachi-Pakistan, Karachi-Pakistan

2 Department of Business, University of Karachi-Karachi, Pakistan

3 Department of Business Studies, Bahria University Karachi Campus, Pakistan

10.22059/ijms.2025.366223.676233

Abstract

Financial literacy is a key component of productive financial decision-making related to investment; an investor with sound financial knowledge can make better financial decisions. Therefore, this study aims to discover an association between financial literacy and investors’ decisions, particularly regarding Islamic banks in Pakistan. When people tend to invest, religiosity may play a significant role in decision-making. This study also examined how religiosity moderates investors’ decisions to invest in Islamic banks. A multi-group analysis was conducted to check the impact in detail. Questionnaires were used to collect data; out of 248 responses received, 218 were used to run the final statistical tests, and PLS-SEM was used. The findings indicate that financial literacy has a substantial influence on the intent to invest and is significantly associated with investment decisions in Islamic banks. Moreover, the outcomes revealed that although religiosity is a valid moderator, it does not have any impact on the intention to invest and investment decisions in Islamic banks. This research can help policymakers understand the significance of financial literacy in enhancing their productivity and investments from investors.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 18, Issue 2
April 2025
Pages 225-239

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