The Entrepreneur and His Small Business: Is Financial Literacy Important (original) (raw)
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Wan Fauziah Wan Yusoff, Khadija M. Usama, 2018
Financial literacy of entrepreneur has been acknowledged as an important aspect that contribute to the success of any business. Many studies have proven that entrepreneurs who possessed high level of financial literacy contribute to success of their business in term of financial and non-financial success. Despite the important of this aspect there is limited study that explore this issue in Nigeria. Therefore, this study explores the relationship between financial literacy and business performance of entrepreneurs in Bauchi State Nigeria. A survey questionnaire was sent to a random sample 500 entrepreneurs which resulted in 386 useable returned questionnaires. The result revealed a statistically significant relationship between the different dimension of financial literacy and entrepreneurial business performance. Thus, the findings prove that financial literacy plays significant role in improving business performance. Therefore, the entrepreneurs need to improve their financial literacy skill in order to enhance their business performance.
EUREKA: Social and Humanities
Remarking on the strategic significance of Small and Medium Scale Enterprise (SMEs) as critical to any economy growth and employment creation opportunities, there are evidence that support the poor possession of the appropriate financial literacy skills and knowledge, required by SMEs to effectively make entrepreneurial decision, needed for business growth and the overall economic development. Previous studies on the leitmotif of financial literacy skills have largely been interrogated through the prism of financial institutions and as an indicator for gauging inclusion leaving sparse research attention to understand its implications on entrepreneurial decision making among SMEs. This research chasm provoked this study. The aim of this paper to dissect and understand the place of financial literacy skills and knowledge in entrepreneurial decision-making of SMEs. A total of 15 SMEs were recruited on purpose with the semi-structure interview type, used in eliciting qualitative data. A...
Financial Knowledge, Attitude and Management Practices Among Small Business Entrepreneurs in Nigeria
Modern Management Review, 2022
A good level of literacy in financial management has been viewed as crucial to enhancing the growth of small business. However, the level of knowledge and attitude of managers of these businesses remains unclear. This study determines the level of financial literacy among small business managers. Using a survey research design, the study covers small business enterprises in Ogun State, Nigeria. Primary data obtained through questionnaire were analysed. The results show that the overall level of attitude of small business owners to insurance and savings are low. Similarly, based on financial knowledge relating to financing sources and interest estimation are also low. The overall financial management practices among the owners are also not encouraging. The findings suggest a need for an improved level of financial literacy among business enterprises to sustain the growth of the sector.
Financial Literacy and Financial Performance of SMEs in Zamfara State, Nigeria
INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM ), 2024
This study examined the effect of financial literacy on the financial performance of small and mediumscale enterprises in Zamfara State, Nigeria. The study specifically examined the impact of financial knowledge, financial behaviour, and financial attitude on SMEs' financial performance. The human capital theory guided the study. A descriptive-correlational method of analysis was employed in this study. A sample of 250 SMEs was used from the total population of 1236 registered SMEs in Zamfara State, Nigeria. An inferential statistical tool, such as regression analysis, was employed to test the relationship between the variables. The study found that financial knowledge has a positive coefficient value of 0.
Purpose: The study sought to examine the impact of financial literacy and financial inclusion on small businesses' overall performance with special reference to Southwest Nigeria. Methods: Descriptive survey research sketch was adopted for this study, while the purposive sampling method was employed to choose forty small scale businesses registered with SMEDAN from each state capital of South Western of Nigeria that engaged in petty trading, bakeries, block-making, soup-making, tailoring, and agro-allied, totaling 240 participants as a sample size for the study. Data were collected by using a closed-ended questionnaire designed for the study, while simple percentage, mean, standard deviation, Pearson Product Moment Correlation (PPMC), and Ordinary Least Square (OLS) was used to analyze the data. Results: The findings disclose that financial literacy and financial inclusion jointly and independently affect small businesses' performance. It revealed a positive and significant relationship between financial literacy and financial inclusion. However, the study depicts that majority of business operators did not have financial knowledge such as working capital management, accounting records system, financial reporting, cashbook maintenance, income statement, daily cash reconciliation, internal control on cash, and cash budget. Also, the study confirmed that the majority of small business entrepreneurs are financially excluded from micro-financing, emergency loans, employ purchase financing, business bank loans, and micro-insurance plan Services.
FINANCIAL LITERACY AND FINANCIAL INCLUSION FOR ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA
WEST AFRICAN JOURNAL OF BUSINESS AND MANAGEMENT SCIENCES FACULTY OF BUSINESS ADMINISTRATION, 2017
The study was conducted to determine the importance of financial literacy and financial inclusion on entrepreneurship development with the aim of accessing the knowledge of Nigerian entrepreneurs in respect to financial literacy and the availability of financial services available. Primary data was generated from the use of questionnaire. The survey covered educated entrepreneurs with the minimum of O'levels. A total sample size of 385 respondents were randomly selected from an infinite population. The study employed an ordered probit regression model for the analysis with the help of STATA (14) because both dependent and independent variables in the study are ordered in the context of multivariate latent structural model. The result with Prob > chi2 = 0.0000 showed that both financial literacy and financial inclusion influences the growth and development of entrepreneurship in Nigeria. Also, the size of Nigerian businesses and their locations have significant positive impact on the entrepreneurship growth and development in Nigeria. Hence, we conclude that increase in the financial activities in order to ensure financial literacy and financial inclusion of the Nigerian populace will have direct effect on entrepreneurship development in the country. The study identified areas of inadequacies and proposed recommendations to improve the financial literacy level and availability of financial services for entrepreneurs.
Financial Literacy and Performance of Small and Medium Scale Enterprises in Benue State, Nigeria
2018
This study the effect of financial knowledge on the performance of Small and Medium Scale Enterprises (SMEs) in Benue State, Nigeria. The study was anchored on theDual –Process Theory.The researcher used both primary and secondary sources from a sample of 154 respondents obtained by the use of a well structured questionnaire. The data collected were analyzed using descriptive statistics such as frequency, simple percentage and the relationship between the variables of the model was tested using multiple linear regression analysis. The result of the regression analysis indicates that the probability value of the regression analysis was used to test the first hypothesis at 5 % level of significance and the p-value (0.002) was lower than the significance level this means that the null hypothesis was rejected and the alternative accepted. This result can be statistically given as p-value 0.002< α = 0.05. The second hypothesis was tested at 5 % level of significance and the p-value (0...
Texila International Journal of Management, 2019
This study sought to evaluate the Effects of Financial Literacy on the financial Performance of small-scale Enterprises. Financial. The findings of this study would benefit the government and other stakeholders in knowing whether the gains of the financial literacy training can outweigh the costs of undertaking the training. This study adopted a descriptive survey design. The target population for this study is all the small-scale enterprises at the makola market which was 6034 traders. The target sample was 100 and since this is a descriptive study, Simple random sampling is more appropriate as it gives all items in a population an equal chance of being selected. Primary data was gathered by use of structured questionnaires which was both open and close-ended questions. Data gathered from the questionnaires was analyzed quantitatively using statistical package for social sciences (SPSS) computer software. SPSS generated both descriptive and inferential statistics. Descriptive statistics including the mean and standard deviation was used to capture the characteristics of the variables under study. Inferential statistics was used to analyze the relationship of the independent variable and the dependent variables. The study established that there was positive correlation between the dependent variable (financial performance) and the Independent Variables (financial literacy). Financial literacy also affected the savings and behavior of small-scale enterprise owners at makola market while savings behavior and attitude do not have effect on financial performance which means that the performance of traders at makola market is not determined by their savings behavior.
Financial Literacy and Women Entrepreneurs’ Performance in Lagos State, Nigeria
Entrepreneurship Review, 2020
Purpose: The study seeks to examine the influence of financial literacy on women entrepreneurs’ performance with particular reference to Lagos State, Nigeria. Methods: A survey research design was employed for this study and a judgmental sampling technique was used to select 250 women entrepreneurs engaging in trading, teaching, fashion design, and agro-allied businesses. Mean, frequency, simple percentage, and least square method of estimation were used to analyze the data. Results: The study establishes that financial literacy is a major determinant of women entrepreneurs’ performance. Implications: The implication of this study is that if women entrepreneurs are equipped with an array of financial skills on income statement preparation, cash flow statement and cash budget preparation, the opening of a separate account for business, bookkeeping, internal control on cash, and daily cash reconciliation, they will be able to expand their businesses.