Globally, economic agents, be they people, enterprises, institutions or governments, save for a variety of purposes. Savings are usually for purposes like investment, consumption, retirement, education, insurance, etc. Savings are an important financial tool, especially for small and medium enterprises (SMEs), with limited access to credit as they can be used to boost growth (Abebe, Tekle & Mano 2016).

Studies have shown that savings are one of the important financial needs of SMEs (Mpaata, Koske & Saina 2021; Komen 2022). Small and medium enterprises whose owners do not cultivate a savings behaviour by reinvesting retained earnings are less likely to expand than those whose owners reinvest capital and have a higher growth potential (Woldehanna, Amha & Yonis 2018). Globally, household savings have risen in high-income countries despite widespread declines in wages and another private income stream (Komen 2022). Important to note is that the economic growth of nations with higher savings rates has outpaced that of nations with lower savings rates (Ribaj & Mexhuani 2021).

Compared to other continents, Africa has consistently had the lowest savings rate (Komen 2022) and has pointed out that savings is ‘the forgotten half’ of finance. Additionally, the continent has severe credit restrictions, which, when combined with low income, substantially reduces any motivation to save (Kibet et al. 2009). Owing to knowledge gaps, and poor saving and investment behaviour, the majority of SMEs are unable to thrive. This has led to the closing of most of these SMEs, which reportedly make a significant contribution to the gross domestic product (GDP) of countries (Abebe et al. 2016). Arinaitwe and Mwesigwa (2015) in Komen (2022) have also shown that three out of every five SMEs fail during the first few months of operation, while 80% fail before their fifth year. This risk is attributable to small business owners’ poor saving practices, which limit their ability to seek external financing and restrict operations and expansion (Komen 2022).

In Nigeria, the savings ratio as a percentage of GDP, which is assumed to be savings per head, has declined from 23.25 billion Naira in 2009 to 12.3 billion Naira in 2015 (Central Bank of Nigeria [CBN] 2015). This is despite that improving the financial system that mobilises the SME’s savings is necessary to boost its growth and development. Through savings behaviour, SMEs may accumulate wealth and gain financial independence (Athukorala 2003).

Saving behaviour has been associated with several sociodemographic factors, including gender. Women typically save less and score lower than men on risk tolerance measures (Fisher, Hayhoe & Lown 2015). Nigerian culture, religion and family systems generally assume that women are subordinate to men (Ojediran & Anderson 2020). While Nigerian women progress towards economic empowerment and gender parity through entrepreneurship, their autonomy on the income generated through their entrepreneurship remains restricted (Ujah 2023; Yousafzai et al. 2022).

Women play a crucial role in economic growth and development in rural areas. However, studies have shown that women in rural areas often face significant financial constraints that limit their savings and investment options (Ujah 2023). Some of these constraints are related to knowledge gaps and behavioural-based factors (Abebe et al. 2016). Knowledge gaps include factors like financial literacy, while behavioural factors include a lack of individual self-control.

Financial literacy, or financial awareness, is an essential aspect of individuals’ financial well-being and financial empowerment (Ali et al. 2021). Financial literacy has been described as the ability to use financial knowledge and skills to efficiently use resources that affect a person’s finances (Mpaata et al. 2021).

Several studies have highlighted that saving behaviour is influenced positively by financial literacy (Delafrooz & Laily 2011; Lusardi & Olivia 2006; Sabri & MacDonald 2010; Yadav, Prasad & Singh 2021). This means that the greater one’s financial literacy, the greater one’s level of savings and the greater one’s financial well-being (Gilenko & Chernova 2021). However, most of these studies were focussed on macro-level businesses (Asare et al. 2018). Research on saving behaviour at the micro-level in sub-Saharan African countries has been minimal (Asare et al. 2018). This study examined the financial literacy and savings behaviour of rural women entrepreneurs at the micro-level of society, namely those in Mokwa, a local government area in Niger State, Nigeria.

Correspondingly, there are a plethora of studies on self-control and savings behaviour (Esenvalde 2011; Kim & Hanna 2017; Mpaata et al. 2021; Sia, Lim & Gan 2011; Strömbäck et al. 2017). These studies, however, focussed on the personality trait of self-control. Mpaata et al. (2021) advocated for studies that looked at personality as it relates to personal finances. The present study thus utilised psychological factors as identified by Rha, Montalto and Hanna (2006), to mediate the role of self-control, in saving behaviour. This decision was prompted by Griesdorn et al. (2014) who claimed: ‘Some of the strongest evidence on self-control and savings comes from a pioneering study by Rha et al. (2006), which demonstrated the strong link between savings and self-control’.

Important to note is that there exists a plethora of studies on financial literacy and self-control on savings behaviour. However, these studies examined the relationship between these variables independently. The present study combined financial literacy variables (financial knowledge and financial attitude) as the independent variables and savings behaviour of rural women-owned SMEs in Mokwa Local Government as the dependent variable, mediated by self-control. More so, the present study made use of financial literacy dimensions as it has been attested that financial literacy cannot be measured directly (Menike 2017).

Various relevant literature sources on the constructs used to measure the independent, mediating and dependent variables by different scholars were consulted. This section discusses the concept of savings behaviour, financial literacy, financial knowledge, financial attitude and self-control, as well as the underpinning theory used for the study.

The methodology employed by the present study is explained as follows, including the research design, the study population and the sample drawn from the population. This section also justifies the approach used and finally explains the data analysis techniques used. The study is descriptive, testing the direct and the mediating relationship between financial attitude, financial knowledge, self-control and savings behaviour of rural women entrepreneurs in Mokwa Local Government Area of Niger State, Nigeria.

This section concerns with empirical results analysed using PLS-SEM path modelling. The section carries out the measurement model analysis and the structural model analysis, presenting its t-value, standard deviation and the R² and effect size. A discussion of the results then follows.

The measurement model was calculated using PLS-SEM path modelling to ascertain the reliability and validity of the instruments used for data collection. Table 1 represents the reliability and the validity of latent variables of the study (Taiwo & Olufunke 2018).

Table 1 shows the measurement model of this study. The researchers evaluated the reliability of the individual items of each potential construct, the reliability of internal consistency (i.e. composite reliability, Cronbach’s alpha and discriminant validity) and convergence validity of each structure as recommended by Henseler, Ringle and Sinkovics (2009). However, Hair et al. (2017) proposed an indicator for the scale of development, an outer loading of 0.70, an AVE of 0.50, composite reliability/Cronbach’s alpha and rho-A values of 0.70, which is reliable and acceptable. The validity and reliability results are presented in Table 1. Evidently, all the constructs of this study are reliable because their respective loadings, Cronbach’s alpha and composite reliability values were above the threshold of 0.70. Again, all constructs had indicator reliability and convergence validity because the AVE level of each construct is higher than 0.50 (Sani, Auwal & Muhammad 2024).

Therefore, it is assumed that the items on Table 1 displayed reliability and convergent validity. The data were next subjected to discriminant validity test using heterotrait-monotrait ratio (HTMT). The result is presented in Table 2.

However, to achieve adequate discriminant validity of the constructs used in this study, the HTMT approach was used. Heterotrait-monotrait ratio refers to the ratio of correlations within the constructs to correlations between the constructs. Kline (2011) recommended HTMT standard of 0.85 or less. However, Gold, Malhotra and Segars (2001) suggested that the value must not be greater than 0.90.

Thus, the result of HTMT in Table 2 revealed that all the constructs used in this study satisfy the condition of Kline (2011), as the coefficient of the intercorrelations is less than 0.85. This further confirmed the validity of the measures employed in the study.

Furthermore, after the study evaluates the conditions of the measurement model, the subsequent step is the assessment of the structural model. The initial phase of the structural model evaluation focussed on analysing theoretical relationships. Specifically, a standard bootstrap approach was employed on a sample size of 175 rural women utilising 5000 bootstrap samples to gauge the significance of path coefficients for the relationships, aligning with the guidance provided by Hair et al. (2017). Thus, Hair et al. (2017) identified three critical criteria for assessing the structural model in PLS-SEM when using Smart-PLS4. These criteria include assessments of the significance of the path coefficients, coefficient of determination (R²) and the effect size (f²). Therefore, Table 3 presents the test of hypotheses.

Table 3 shows that financial attitude has a positive and significant effect on savings behaviour (β = 0.38, standard deviation [SD] = 0.049, t-value = 7.554 and p-value = 0.000) that as financial attitude increases by one unit, rural women’s savings behaviour is likely to increase by 38%. Hence, the study failed to reject H01, which implied that financial attitude does not significantly influence the savings behaviour of rural women entrepreneurs in Nigeria. Similarly, financial knowledge has a significant positive influence with savings behaviour (β = 0.081, SD = 0.036, t-value = 2.215, p-value = 0.027). This implied that financial knowledge could improve the savings behaviour of rural women by up to 81% (β = 0.081). Thus, the study also failed to reject H02, which states that financial knowledge does not significantly influence the savings behaviour of rural women entrepreneurs in Nigeria. Likewise, the result of the study reported that self-control has a significant positive relationship with savings behaviour (β = 0.25, SD = 0.050, t-value = 4.913, p-value = 0.000). This implied that self-control improved the savings behaviour of rural women by up to 25% (β = 0.25). Therefore, the study also failed to reject the third hypothesis (H03) that states self-control does not have a significant relationship with the savings behaviour of rural women entrepreneurs in Nigeria.

Moreover, regarding the mediating relationship, there exists a positive mediating relationship of financial attitude between self-control and savings behaviour (β = 0.13, SD = 0.028, t-value = 4.808, p-value = 0.000). This implied that financial attitude improved the relationship between self-control and savings behaviour by up to 13% (β = 0.13). Therefore, the study also failed to reject H04, which states that financial attitude does not significantly mediate the relationship between self-control and savings behaviour of rural women entrepreneurs in Nigeria.

Similarly, H05, the second mediating relationship in this study, indicated that a positive and significant mediating relationship of financial knowledge exists between self-control and savings behaviour (β = 0.038, SD = 0.011, t-value = 3.339, p-value = 0.001). This implied that the interaction of financial knowledge with self-control likely led to changes in rural women’s willingness to savings behaviour with 0.38% (β = 0.038). Hence, the study also failed to reject H05, which states that financial knowledge does not significantly mediate the relationship between self-control and savings behaviour of rural women entrepreneurs in Nigeria.

After the assessments of significance of the path coefficients, the next is the assessments of coefficient of determinant (R² value). In assessing the coefficient of determinant (R² value), Cohen (1988) proposed R² values for dependent latent variables as follows: 0.26 for substantial, 0.13 for moderate and 0.02 for weak when using PLS-SEM path modelling. Hence, the R² value explains by financial attitude, and financial knowledge, shows a variance of self-control (37%) and saving behaviour (36%) as moderate. Therefore, the result of R² of this study is presented in Table 4:

Table 4 displays the variance explained of the first model (measurement model). Based on the criterion for assessing R² (Cohen 1988), all the independent variables explained 73% variance in self-control and savings behaviour, thus suggesting that financial attitude and financial knowledge explained a moderate variance in self-control and savings behaviour.

Having assessed the significance of the path coefficients, the coefficient of determinant (R² value), the next is the assessments of the effect size, f². To assess the effect size, f² values, Cohen (1988) proposes that 0.02, 0.15 and 0.35 constitute more realistic standards for small, medium and large effect sizes, respectively. Table 5 presents the result of the effect size of the constructs used in this study.

The study further tested for the effect size of the exogenous variables on the endogenous variable of this study using f². According to Cohen (1988), f² values of 0.02, 0.15 and 0.35 represents small, medium and large effects, respectively. Table 5 shows the effect size of each of the exogenous variables in the present study (Taiwo & Olufunke 2018). The effect size of financial attitude on saving behaviour is 0.593; this means financial attitude has large influence on the saving behaviour of rural women. Financial knowledge has small influence on the savings behaviour of rural women, with an f² value of 0.045. Finally, self-control has small influence on the savings behaviour of rural women, as it has f² value of 0.058. Therefore, it is concluded that financial attitude exerts a large influence on the saving behaviour of rural women entrepreneurs in Mokwa Local Government in Nigeria as against financial knowledge and self-control, with a small effect on saving behaviour.

The Stone-Gleisser Q² value was used to the predictive relevance of the model. A Q² value of 0.02 represents a small effect size, 0.15 represents a medium effect size and 0.35 represents a high effect size (Cohen 1988). From Table 6, it is seen that the Q² value of self-control, and saving behaviour is above 0. More precisely, the Q² value of self-control, and saving behaviour is 0.246 and 0.256, respectively; this means the independent variables of this study has a medium degree of predictive relevance with regard to self-control and savings behaviour.

The findings of this study offer valuable insights for saving behaviour of rural women entrepreneurs in Nigeria and their financial decision-making process as discussed below.

The study offers the following recommendations:

Financial intermediates like commercial banks and microfinance banks should introduce innovative savings schemes tailored for rural entrepreneurial activities; this will enhance their behaviour towards savings.

The Nigerian government should develop awareness programmes for rural enterprises on the importance of saving for them and the nation. This could be achieved through sensitisation and advocacy programmes on the importance of savings.

Finally, agencies responsible for guiding rural business activities should articulate strategies that will reach out to these enterprises on educating them on the importance of financial literacy. This will enhance their behaviour to save.

This study has achieved its stated purpose, namely narrowing a knowledge gap by examining the relationship between financial literacy factors (financial knowledge, financial attitude) and savings behaviour of rural women entrepreneurs using self-control as mediating the relationship between the independent and the dependent variables in Mokwa Local Government, Nigeria. Overall, the study’s main conclusion is that rural women entrepreneurs’ financial literacy is empirically related to how they save. Also, the study concludes that self-control seems to mediate the relationship between financial literacy factors and the savings behaviour of rural women entrepreneurs in Nigeria.