Financial literacy and business performance among female micro-entrepreneurs

  • Received December 30, 2021;
    Accepted February 11, 2022;
    Published February 15, 2022
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/imfi.19(1).2022.12
  • Article Info
    Volume 19 2022, Issue #1, pp. 156-167
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This work is licensed under a Creative Commons Attribution 4.0 International License

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 micro-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.

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    • Figure 1. Measurement model assessment
    • Table 1. The study population
    • Table 2. Analysis of demographic profiles of respondents
    • Table 3. Construct validity and reliability
    • Table 4. Discriminant validity – Heterotrait – Monotrait (HTMT) criterion
    • Table 5. Hypothesis testing results
    • Table 6. Effect sizes (f2)
    • Table A1. Financial literacy
    • Table A2. Organizational performance
    • Conceptualization
      Ndaghu Julius Tumba, Ekom Etim Akpan
    • Data curation
      Ndaghu Julius Tumba, Ekom Etim Akpan
    • Formal Analysis
      Ndaghu Julius Tumba, Ekom Etim Akpan
    • Methodology
      Ndaghu Julius Tumba, Ekom Etim Akpan, Gbenga Festus Babarinde
    • Software
      Ndaghu Julius Tumba, Ekom Etim Akpan
    • Validation
      Ndaghu Julius Tumba, Vincent A. Onodugo, Ekom Etim Akpan, Gbenga Festus Babarinde
    • Visualization
      Ndaghu Julius Tumba, Vincent A. Onodugo, Ekom Etim Akpan, Gbenga Festus Babarinde
    • Writing – original draft
      Ndaghu Julius Tumba, Ekom Etim Akpan, Gbenga Festus Babarinde
    • Project administration
      Vincent A. Onodugo, Gbenga Festus Babarinde
    • Supervision
      Vincent A. Onodugo
    • Funding acquisition
      Gbenga Festus Babarinde
    • Investigation
      Gbenga Festus Babarinde
    • Resources
      Gbenga Festus Babarinde
    • Writing – review & editing
      Gbenga Festus Babarinde