The role of financial literacy and risk tolerance: an analysis of gender differences in the textile sector of Pakistan

This research explores the effect of financial literacy and risk tolerance on decisions making for investment by men and women in the textile sector of Pakistan. It examines the role of risk tolerance as mediator in relation between financial literacy and individual's investment decision making. It also examines the moderating effect of gender difference between financial literacy and risk tolerance. Collection of research data was done from the 300 respondents in the textile sector of Faisalabad through the self-administered questionnaire by using convenient sampling. This research work represented the facts that financial literacy has a positive and significant relationship with risk tolerance, and investment decisions are significantly influenced by it. Risk tolerance has a positive and insignificant impact on investment decisions. In contrast, the mediation role of risk tolerance is insignificant between the financial literacy level of individuals and decisions made by them for investment. The purpose of a moderator as gender differences is significant. This study empowers managers to provide basics financial services to employees. Management might be guided that what should be highlighted and what has to be improved to enhance the financial literacy level of textile workers. Employers can play a vital role in building awareness and to educate their employees on fiscal wellness, investment planning, and retirement. Financial literacy can also help employees to achieve commercial success, and it is fruitful in providing benefit plans at work and in their financial affairs.