Financial Literacy and Financial Well-being as Mediated by Financial Self-efficacy of Microfinance Borrowers

This study determined the mediating effect of financial self-efficacy on the relationship between financial literacy and financial well-being among 300 microfinance borrowers, specifically in cooperatives within Panabo City, Davao del Norte. The study employed a non-experimental, quantitative research design using a descriptive correlational approach. Results revealed that the levels of financial literacy, financial self-efficacy, and financial well-being were all high, indicating that borrowers generally possess sound financial knowledge, confidence in managing finances, and a stable financial condition. Correlation analysis showed a significant positive relationship among the three variables. Moreover, the mediation analysis revealed that financial self-efficacy partially mediated the relationship between financial literacy and financial well-being, accounting for 80.50% of the total effect. This implies that borrowers with higher financial literacy tend to have stronger financial self-efficacy, which in turn enhances their financial well-being. Thus, improving both financial knowledge and confidence can lead to better financial outcomes among microfinance borrowers.