‘Emotional Intelligence Is Not Just an Asset; It Is a Necessity’: Shaping Financial Behaviours and Overcoming Biases in Women Entrepreneurs

The role of emotional intelligence (EI) in shaping the behavioural biases of women in financial decision-making remains underexplored in the literature. The current study addressed this gap by investigating how women entrepreneurs’ financial literacy influences their financial decisions, with EI serving as a mediator. A cross-sectional descriptive survey design was employed for data collection from 210 Pakistani women entrepreneurs. A proportional stratified sampling technique was used to collect data, and analysis was conducted using structural equation modelling (SEM) via AMOS 26. Findings reveal that financial literacy has significant positive impacts on EI and self-control and helps reduce loss aversion bias, but no significant relationship was found between financial literacy and regret aversion or mental accounting. Moreover, EI acts as a strong mediator between financial literacy and biases such as mental accounting, regret aversion and loss aversion, but not between financial literacy and self-control. This study’s findings underscore the critical role of EI in reducing biases and complementing financial literacy to empower women entrepreneurs to make rational financial decisions. Moreover, it also emphasizes the need to integrate EI into financial literacy programmes to foster more effective decision-making and advance entrepreneurship among women.