The relationship between financial literacy and financial access among SMEs in the Ekurhuleni Metropolitan Municipality, South Africa
Year: 2019
Type: dissertation
Study design: Observational Study
Abstract: Financial literacy continues to be a significant factor affecting small and medium enterprises (SMEs) in their ability to access finance worldwide. Both new and existing SMEs rely on external financing to grow and expand operations. However, financial literacy remains low among entrepreneurs, resulting in restricted access to finance which leads and contributes to the high failure rate of SMEs. The objective of the study is to determine whether a relationship exists between financial literacy and financial access among SMEs. \nThis study followed a descriptive and quantitative research design. Primary data was gathered in a survey by means of self-administered questionnaires distributed to 397 entrepreneurs in the Ekurhuleni Metropolitan Municipality, Gauteng. \nThe study revealed that entrepreneurs in Ekurhuleni did not fully understand basic financial concepts and thus portrayed low levels of financial knowledge. The study also indicated that access to finance was a major challenge for the majority of the SMEs in the municipality. Furthermore, the study established a positive relationship between financial literacy and financial access among SMEs in the municipality. \nRecommendations were provided to government, financial institutions, academic institutions and entrepreneurs suggesting measures that could be implemented in an effort to improve the levels of financial literacy and financial access among entrepreneurs. This study is the first to examine the financial literacy-financial access relationship among SMEs in Ekurhuleni Metropolitan Municipality and provides a benchmark for future research studies in this area.
Author: Memory Changwesha
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3028369935