Abstract:
The purpose of the study was to examine financial literacy of small business
owners, financial records keeping and enterprise performance in the TarkwaNsuaem Municipality of Ghana. Financial literacy level and operating
performance of those enterprises as a measure of business economic
performance was examined. In addition, the study examined financial records
kept by small business owners. It was an explanatory study which employed
quantitative methodology and survey strategy. Findings were based on
responses from 120 small business owners, comprising 60 retailers, 30 artisans
and 30 food manufacturers. Data was analyzed using Descriptive Statistics,
Index Pool, Chi-square Test for independence, Independent Sample T-Test
and Linear Regression. The study revealed that there is a weak positive
correlation between the financial literacy and performance of small business
enterprises. It came out from the results that most small business owners are
confronted with some complicated financial decisions in running and
managing their businesses. Most small business owners’ lack of knowledge,
skill and attitude to manage the finances of their organization in a professional
way poses a significant obstacle to performance growth of sustainable small
scale enterprises. Finally, it can be concluded that the financial literacy of
small business owners have a significant influence on small business
performance. Developments in the financial markets make financial literacy
increasingly important for financial well-being. Therefore, in order to boost
the financial literacy of small business owners within the municipality, policy
makers should specifically design programs and workshops targeted at further
enhancing the financial literacy levels of these owner-managers.
