Home⇛Psychology and Education: A Multidisciplinary Journal⇛vol. 9 no. 3 (2023)

Bridging the Knowledge Gap: Understanding the Role of Financial Literacy Practiceson the Business Performance of MSMEs

Janine Pinca | Froilan Labausa | Nancy Cruda

Discipline: Education

 

Abstract:

Financial literacy has been recognized as a crucial factor in the success of micro, small, and medium sized enterprises (MSMEs). Therefore, this study aims to investigate the impact of financial literacy practices on the business performance of MSMEs. Specifically, it aims to identify the financial literacy practices that are most effective in improving the financial management skills of MSME owners and their impact on the growth and sustainability of their businesses. This study applies descriptive quantitative research design with convenient selection of participants. The primary gathering tool was a modified survey questionnaire. The data gathered from the survey questionnaire was analyzed and interpreted using interval data measurement on a Five-point Likert scale. The study is significant as it provides insights into the factors that contribute to the success of MSMEs and highlights the importance of financial literacy in promoting entrepreneurship and economic development. The findings of this research will be of value to policymakers, business owners, and other stakeholders in the MSME sector, as they seek to promote the growth and sustainability of small businesses. It came to light that digital marketing strategies significantly affects customers’ brand awareness to a great extent with a Pearson r correlation coefficient value of 0.920 interpreted as ‘Very Strong Correlation.’



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