Item
Financial Literacy and Economic Sustainability of Rural Retail SMEs in Zimbabwe: Evidence from Manicaland Province
- Title
- Financial Literacy and Economic Sustainability of Rural Retail SMEs in Zimbabwe: Evidence from Manicaland Province
- Creator
- Mandongwe Lucia
- Murairwa Stanley
- Jachi Moses
- Abstract
-
The study introduced the rampant lack of financial literacy betraying economic sustainability of rural retail SMEs in Zimbabwe. Notwithstanding the notable attention and recognition of the role played by SMEs towards poverty alleviation and the overall growth of both developed as well as developing economies, Zimbabwe still records a worrying number of unregistered SMEs, in excess of 80% of total SMEs, who maintain incomplete to no financial records. The study sought to assess the association between financial literacy (as represented by its dimensions of financial behaviour, financial knowledge and financial attitude), as the independent variable, and economic sustainability, as represented by profitability as the dependent variable. Making use of both quantitative and qualitative data collected through questionnaires from 100 purposively selected rural retail SMEs in Manicaland Province, the study established that there is no relationship between financial knowledge of SME owners or managers and success of their business endeavours. However, the study established the existence of a relationship between financial attitude and financial behaviour and business profitability. The study concluded that financial literacy as assessed through financial attitude and financial behaviour has a significant contribution towards influencing the quality of business decisions and can contribute towards economic sustainability of rural retail SMEs in Zimbabwe. The study will inform policy making agencies in their endeavour to promote sustainable SMEs to focus on enhancement of financial literacy of rural SMEs as they significantly contribute towards achievement of policy objectives around employment creation, poverty eradication and economic growth. The scope of the study was however limited to rural retail SMEs, hence, widening the geographical scope to include SMEs in urban setups will enhance insight into this relationship, and furtherance of policy endeavours of promoting economically sustainable SMEs in Zimbabwe.
Keywords
Financial literacy, Economic sustainability, SMEs
- Date
- May. 2020
- Source
- IOSR Journal of Business and Management (IOSR-JBM)
- volume
- 22
- issue
- 5
- pages
- 1-8
- issn
- 2278-487 X