Title: Financial literacy: an imperative approach for SMEs growth

Authors: Swati Sharma

Addresses: Amity Business School, Amity University Rajasthan, Jaipur 303002, India

Abstract: The objective of this study is to examine the relationship between financial literacy, firm's growth, and access to finance among small and medium enterprises (SMEs) within Jaipur, Rajasthan, India. This study tries to find out whether financial literacy affects a firm's access to finance and growth. To get an insight of the relationship, quantitative research was carried out among 41 SMEs of Jaipur, Rajasthan, India. The findings from the study are based on quantitative data collected through the use of semi-structured questionnaires. Findings reveal a positive correlation among the variables i.e. financial literacy, access to finance and firm's growth. Both financial literacy and access to finance have a substantial impact on firms' growth. This study contributes to the existing literature by justifying the role of financial literacy in the strategic decision-making process. Financial literacy not only enables the entrepreneur in decision making but also helps SMEs to develop economies. Furthermore, as SMEs play a key role in developing countries, it becomes imperative for the entrepreneurs to be sound in financial decision making which also affects the performance of the firm.

Keywords: SMEs; financial literacy; economic growth; access to finance; entrepreneurship.

DOI: 10.1504/WREMSD.2022.123765

World Review of Entrepreneurship, Management and Sustainable Development, 2022 Vol.18 No.4, pp.388 - 403

Received: 01 Feb 2020
Accepted: 20 Jul 2020
Published online: 04 Jul 2022 *

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