The Financial Confidence Gap among Women SHG Members: Evidence from Cuttack City, Odisha

Financial literacy is important for good financial management, but just because a person has financial knowledge doesn't mean she feels confident in making financial decisions. The present study attempts to find out the gap between actual financial knowledge and perceived financial confidence of women members of Self-Help Groups (SHGs) of Cuttack City of Odisha. It also examines whether the financial confidence gap varies according to educational qualification and participation in financial literacy programs, and whether it is correlated with the duration of SHG membership. A quantitative, cross-sectional design was adopted, and primary data were collected from 250 women SHG members through a structured questionnaire using non-probability convenience sampling. Actual financial knowledge was assessed through six objective questions, while perceived financial confidence was measured using eight statements on a five-point Likert scale. The data were analysed in SPSS using descriptive statistics, Cronbach’s alpha, a paired-samples t-test, one-way analysis of variance (ANOVA), Welch’s independent-samples t-test and Spearman’s rank correlation. The mean actual financial knowledge score was 81.93%, compared with a standardised perceived financial confidence score of 57.45%, producing an average negative gap of 24.48 percentage points. This difference was statistically significant (t = −17.843, p <.001). The gap also differed significantly across educational qualification groups (F = 23.042, p <.001) and between respondents who had and had not participated in financial literacy programmes (Welch’s t = 3.261, p =.001). SHG membership duration was negatively associated with the gap (ρ = −0.282, p <.001). The findings indicate that, in this sample, measured financial knowledge was generally higher than respondents’ self-reported confidence. The study highlights the importance of combining financial knowledge initiatives with practical opportunities to strengthen women’s confidence in making financial decisions.