“Financial literacy and business performance among female micro-entrepreneurs”

The poor performance of female entrepreneurs, exemplified in their inability to realize their full potential and compete fairly with their male counterparts owing to financial illiteracy, motivated this study. Therefore, this study examined the effect of financial literacy on business performance among female micro-entrepreneurs. Using the survey research design, data were collected from 247 female entrepreneurs from six states in the North-Eastern region of Nigeria. The hypotheses developed for the study were tested using path modeling-structural equation modeling with the aid of SmartPLS software version 3.2.7. The result revealed that all proxies of financial literacy (financial education, cash forecasting, and bookkeeping have significant effects on business performance of female entrepreneurs. Additionally, the paper revealed that financial education contributed more to the variance in business performance of the female mi-cro-entrepreneurs, this was followed by bookkeeping practices, while cash-forecasting has the least effect on the variance in business performance. This implies that financial education is essential for the success of female micro-entrepreneurs. Thus, this study advocates the need for continuing trainings and workshops for female micro-entrepreneurs on financial concepts such as bookkeeping, cash forecasting, and market volatilities.


INTRODUCTION
Female micro-entrepreneurs represent a vast and untapped source of economic growth worldwide (Tantasuntisakul, 2015;Rashid, 2017;Pandey & Bharthi, 2020). Female entrepreneurship provides women with earning power while assuring their ability to prosper independently, reducing their insecurity about their ability to care for their children, and thus encouraging other women to pursue personal, economic, or even political autonomy, to make autonomous choices and to stand up for themselves and their lifestyle (Kevehazi, 2020).
The need to maintain a certain quality of life often drives the establishment of female micro-enterprises (Pandey & Gupta, 2018). Female entrepreneurs often devote practically all of their financial resources, time, and effort to earn income in order to stay afloat and grow their fortune (Pandey & Gupta, 2018). The enterprises mainly operate in the informal sector and witnessed very little regulation from the government (Eniola & Entebang, 2015).
According to Hassan and Mugambi (2013), the number of female micro-entrepreneurs in Sub-Sahara Africa has increased significantly, yet many of them are still unable to realize their full potential. The inability of women to reach their potentials in the area of business maybe due to the lack of exposure to financial education, poor knowledge of bookkeeping, inability to predict cash-flow, poor social net-works, gender discrimination, family and home commitments, cultural factors, and inadequate finances (Halkias et al., 2011;Mkasanga, 2015;Seedhouse et al., 2016;Ukanwa et al., 2018;Liu et al., 2019). The gender gap in entrepreneurship may also be ascribed to the disparities in economic and socio-cultural elements that shape the market conditions for female entrepreneurs, particularly in Nigeria's north (Ladanu & Ayedun 2016).

Financial literacy
Financial literacy is critical in assisting individuals in identifying financial behaviors that promote good financial resource management. It allows entrepreneurs to understand essential financial concepts such as interest rate, risks, returns on investments, inflation, and investment diversification. Financial literacy enhances the ability of businesses and individuals to study and appreciate money and financial concerns (Hilgert et al., 2003). It is an essential skill for successful financial decisions. Financial literacy is the ability and skill to use knowledge and comprehension of financial concepts to make good business decisions in diverse financial circumstances (Hogarth, & Hilgert 2002).
Financial literacy, according to Kim (2001), is a fundamental skill that people require in order to thrive in today's business and society. Lusardi and Mitchell (2007) see financial literacy as being informed about all aspects of savings, investments, and decumulation in the context of everyday financial decisions, whereas Stone et al. (2008) defined financial literacy as having a basic understanding of how to effectively manage debt. Therefore, financial literacy is the ability to make sound financial decisions (Novo, 2012).

Business performance
Business performance shows the extent to which firms make a relative profit, return on investment, and total sales growth. Business performance is measured from two basic approaches. These are financial and non-financial approaches (Owolabi et al., 2021). Non-financial metrics include customer happiness, employee turnover, and productivity, while financial measures include sales and profit before tax. Also, business performance is personal, team, or unit success in achieving strategic objectives through desired behaviors (Siekei et al., 2013).
Business performance is a metric that assesses a company's efficiency and effectiveness in attaining its goals (Reijonen, 2008). In this study, business performance is measured as a mono-dimensional construct and defined as the attainment of organizational goals via the effective use of strategies and organizational resources.

Theoretical background
This study derives its theoretical strength from the knowledge spillover theory of entrepreneurship as propounded by Acs et al. (2009). According to the theory, the development of new information broadens the range of technical possibilities. Entrepreneurial activity entails not just the arbitrage of opportunities, but also the exploitation of intra-temporal knowledge spillover that incumbent enterprises have yet to appropriate. Individual agents with endowments of new economic knowledge, rather than exogenously assumed enterprises, are the unit of study in a model of economic growth, according to the theory. Endogenous knowledge exploitation is pursued by agents with new knowledge. This shows that knowledge spillover outnumbers knowledge stock, and that there is a significant link between knowledge spillover and entrepreneurial activity. There would be no intra-temporal knowledge spillover if incumbent businesses captured all R&D rents (Acs et al., 2009).
Low levels of knowledge-based entrepreneurship might be caused by two causes, according to the knowledge spillover model of entrepreneurship: (1) failure of private enterprises and public institutions to develop new information; and (2) failure of people to exploit that new knowledge. First, the lack of a local industry base and/or domestic knowledge-creating organizations, such as public research institutes, may stymie the development of knowledge-based entrepreneurship. Second, individuals may fail to market new information through entrepreneurship, according to the knowledge spillover hypothesis of entrepreneurship. Individuals with new information may underinvest in commercialization activities because they do not recognize the advantages, or may fail to commercialize because they lack market understanding. Individuals or organizations with market knowledge or other resources may be unaware of new information and, as a result, fail to invest in or under-invest in new enterprises (Acs et al., 2004).

Financial education and business performance
Financial education is the mastering of basic financial principles and using the skills to enhance business performance or improve decision-  (2006) found that business leaders with higher understanding of the use of financial models positively influence a company's outcomes. This is consistent with the submission of Hastings et al. (2013) who noted that financial education helps managers to perform better.

Cash forecasting and business performance
Cash forecasting is an evaluation of the movement of cash within a firm over a specified period of time (Eniola & Entebang, 2015

Bookkeeping and business performance
The core activity of the accounting system is bookkeeping . Every organization's accounting process includes bookkeeping, which is the recording of financial transactions (Uddin et al., 2017). A bookkeeper is an employee who keeps track of an organization's day-to-day financial transactions (Ernest, 2018). He or she is normally in charge of keeping track of purchases, sales, receipts, and payments in the day-books.
A book-keeper is in charge of making sure that all transactions, whether cash or credit, are properly documented in the day-book, supplier's ledger, customer ledger, and general ledger (Ernest, 2018).
According to Maseko and Manyani (2011), micro and small business record-keeping is the backbone of their business performance. Keeping proper accounting records is what makes a firm lucrative. Holmes and Gupta (2015) opine that most business operators, particularly those in SME's, see record keeping as a way to recoup early investment in the form of cash at the con-clusion of the accounting period. The long-term viability of a firm is jeopardized if small businesses do not keep good accounting records.
This study aims to assess the relationship between financial education and business performance, examine the correlation between cash forecasting and business performance, and investigate the correlation between bookkeeping practice and business performance.
In line with the above goals, the following hypotheses are proposed: There is a significant relationship between financial education and business performance.

METHODOLOGY
Research design is a blueprint that guides a researcher through many stages of the study and allows them to come up with answers to challenges. Research design, according to Turner and Houle (2019), is a framework for gathering accurate and trustworthy data to test hypotheses or address the research questions. In this study, the survey design will be followed. The survey is deemed appropriate with the following three reasons. First, survey is designed to get relevant and precise data regarding the current state of a phenomenon at a point in time (Turner & Houle, 2019).
The target population for this study encompasses all female micro-entrepreneurs in the North-East region of Nigeria. However, the accessible population is made up of 1,204 female micro-entrepreneurs who are registered with Small and Medium Enterprise Development Agency (SMEDAN) and have operated for at least five years. Data will be collected from the owners of the firms only.
The distribution of the study population based on their states is shown in Table 1. The size of the sample was determined using the Krejcie and Morgan (1970)

Operational measures of variables
Data for the study were generated through primary sources. A structured questionnaire was used to obtain the data. The questionnaire was structured into three sections. Section one was structured to provide demographic information of the respondents such as age, gender and educational qualification. Section two focused on the independent variable (financial literacy). Section three had items on the dependent variable (organizational performance).
In this study, financial literacy was observed using three proxies (financial education, cash forecasting, and bookkeeping ). Organizational performance was observed as a uni-dimensional construct and measured with five items such as "Our company has maintained a steady assets growth; The financial value of my business has increased within the last five years".

RESULTS
Out of the sample size of 303, a total of 247 female entrepreneurs correctly filled and returned the questionnaire that was given to them. This represents a return rate of 81.5 percent. All analyses were carried using data from the 247 participants.
The demographic details of the respondents are shown in Table 2.
The Marital status column (

Inferential statistics data analysis
The path modeling (PLS-SEM) with the aid of SmartPLS 3.2.7 software was used to test the formulated hypotheses. As noted by Ringle et al. (2015), this technique involves two steps: first the measurement needs to be assessed and then the structural model is assessed. Figure 1 shows the measurement model. The model indicated that all items for financial education returned acceptable levels of factor loadings of 0.6 and above. Likewise, factor loadings for cash forecasting were above the threshold of 0.6. Similarly, the indicators for bookkeeping practice returned factor loadings of 0.6 and above. For the dependent variable, business performance, the factor loadings were above the threshold of 0.6. Hence, all the statement items met the 0.6 criteria given by Hulland (1999) and were retained for the final analyses.
Furthermore, the model was tested for validity and reliability of the items. Cronbach alpha and composite reliability were used to assess the reliability of the instrument. While the average variance extracted (AVE) and Heterotrait-Monotrait (HTMT) criterion were used to confirm the validity of the instrument.
Cronbach alpha and composite reliability ratings of 0.7 and higher showed an adequate degree of reliability (Nunnally, 1978). The average variance   The HTMT criteria were employed to evaluate the constructs' discriminant validity. Table 5 shows the results of the HTMT evaluation. Constructs with HTMT values less than 0.9 are deemed acceptable, according to Hair et al. (2017). As a result, all of the constructs had appropriate discriminant validity because their values were below the 0.9 threshold.
A second test was performed to see which of the exogenous latent factors had the greatest impact on the endogenous variable. Table 6 displays the outcome. According to Hair et al. (2014) and Cohen (1988), the effect sizes of each dimension of financial literacy (financial education, cash forecasting, and bookkeeping) on business performance, f 2 values of 0.02, 0.15, and 0.35, respectively, represent "small, medium, and large effects" of the endogenous construct.  Table 6 shows that financial education contributed the largest to variance in business performance with an ƒ 2 value of 0.35. This was followed by bookkeeping with a moderate effect size of an ƒ 2 value of 0.17. Cash forecasting has the least effect size of an ƒ 2 value of 0.14.

DISCUSSION
The findings revealed that all dimensions of financial literacy (financial education, cash-forecasting, and bookkeeping ) significantly correlated with business performance of female entrepreneurs. Furthermore, the study showed that financial education has the largest effect on business performance. This was seconded by bookkeeping , while cash-forecasting has the least effect on business performance. The results implied that financial education plays a major role in the success of female entrepreneurs. This finding corroborates that of Atkinson and Messy (2011), who found that financial education is key to entrepreneurs' understanding of business ideas and helps them seize business opportunities, minimize risks and make informed business decisions. Furthermore, Lusardi and Oliver (2006) assert that higher financial awareness helps in solving complex business problems, thereby improving performance. The findings of this study are also in consonant with the findings of Cherugong (2015), who found that financial literacy has a positive influence on the com-petence of an entrepreneur, thus helping the entrepreneur to successfully forecast the financial needs of the business, hence leading to higher profitability. Similarly, Fatoki (2014) opines that cash forecasting is a major determinant of financial behavior, while Lusardi and Mitchell (2014) confirmed that proper cash forecasting is important for financial behavior, including taking debts and savings.

CONCLUSION
The study examined the association between financial literacy and business performance of female entrepreneurs. It was revealed that all proxies of financial literacy (financial education, cash-forecasting, and bookkeeping ) significantly correlated with business performance. Furthermore, it was found that financial education contributed most to the variance in business performance, followed by bookkeeping and cash forecasting.
Based on the findings, the study concluded that financial illiteracy is the cause of poor business performance among female entrepreneurs. This implies that there is a greater chance for financially literate female entrepreneurs to be more successful than those with low level of financial knowledge. In line with the conclusion above, it was advocated that female entrepreneurs should make conscious efforts to update their knowledge on financial issues.
Also, female entrepreneurs should frequently attend trainings, workshops and seminars on bookkeeping , cash-forecasting and other financial concepts. These steps will ensure that female entrepreneurs are adequately prepared to compete and possibly outperform their male counterparts.

LIMITATIONS AND SUGGESTIONS FOR FURTHER STUDIES
This study has a few limitations. First, the study focused only on female entrepreneurs practicing in the North-Eastern region of Nigeria. In this regard, it is proposed to conduct similar studies in other regions of the country. Secondly, the study focused only on the entrepreneurial sector. Therefore, future studies should expand to other sectors of the economy. Thirdly, the study considered business performance as a mono-dimensional construct. Therefore, other scholars should decompose business performance into different facets such as financial and non-financial performance. Finally, the study ignored the moderating effects of factors such as the business climate, risk-taking proclivity, and service innovation. Future research should consider the moderating effect of these factors.