Abstract:
ABSTRACT
The study assessed the relationship between financial literacy, digital finance
and SMEs' performance in commercial areas of the Central Region. The
specific objectives were to analyse the level of knowledge and use of digital
platforms by SMEs; assess the relationships between financial literacy and
access to digital finance; assess to digital finance and performance of SMEs. It
was also to analyse the mediating effect of access to digital finance on the
relationship between financial literacy and performance of SMEs. Using a
quantitative research approach data was gathered from 400 SMEs in Cape
Coast, Mankessim, Assin Fosu, Agona Swedru and Kasoa. Self-administered
questionnaires were shared and a purposive sampling technique was
employed. Using SPSS to test descriptive statistics, results from objective one
indicates that, managers of SMEs in the study areas have more knowledge and
utilize Mobile Money more than any of the country's digital platforms. The
relationships between financial literacy, access to digital finance and SMEs'
performance were assessed using PLS-SEM. Financial literacy was found to
have a positive and significant impact on access to digital finance and access
to digital finance also had a positive and significant impact on performance.
Lastly access to digital finance partially mediates the relationship between
financial literacy and SMEs' performance. This means, access to digital
finance is just as important as having financial knowledge in terms of
improving performance, therefore using digital platforms to trade would
enhance firm performance. Digital trading platform providers should enhance
their advertising and focus on making their platforms easy to use for the
average consumer
