Philippine E-Journals

Impact of Financial Literacy on Financial Performance in Select Multi-Purpose Cooperatives in Tagbilaran City, Bohol, Philippines

Earl Gudelosao | Antoniette Jane Café | Kristel Liray | Junalli Grace Tabaco | Leenard Nickolson Felicitas

Discipline: Finance

 

Abstract:

. Cooperatives play a vital role in promoting economic growth and financial inclusion, especially in communities with limited access to formal financial institutions. Despite this importance, many cooperative members still exhibit low financial literacy, which may affect their financial decisions and the organization’s overall performance. This study utilized a quantitative descriptive-correlational research design with mediation analysis involving one hundred members from four registered multi-purpose cooperatives. Data on members’ financial literacy were gathered through a questionnaire, while financial performance indicators were obtained from cooperative records. Results revealed that financial knowledge significantly increases financial attitude (β = 0.525, p < .001), and financial attitude significantly increases financial behavior (β = 0.592, p < .001). However, financial knowledge has no significant direct effect on financial behavior (β = 0.024, p = .797), demonstrating that financial attitude fully mediates this pathway (indirect effect β = 0.311, p < .001). Furthermore, regression analysis showed that members' financial literacy had no significant predictive effect on cooperative financial performance (β = 0.048, p = .632), with the model explaining only 0.2% of the variance (R² = 0.002). These findings indicate that improving members’ financial literacy alone is insufficient to enhance cooperative outcomes; organizational factors such as governance, management, and internal controls likely exert a more substantial impact.