Financial literacy, financial behaviour and savings behaviour among owner-managers of small and Medium-scale enterprises in Awutu Senya East District

Abstract

Financial literacy and behaviour have attracted increasing attention in both the developed and developing world due to its role in financial decision and their influence on savings habits of Small and Medium Enterprises (SMEs) owners. This study examined the influence of financial literacy, financial behaviour on savings habits of SMEs owners in the Awutu Senya District of Ghana. The study used across-section data set within a descriptive research design. The study employed quantitative approach in the study and data collection was done using questionnaire. A total of 201 SMEs owners were selected using censes method. Analyses of the data were done by using both descriptive and influential analyses. The study revealed that financial behaviour has positive influence on savings habit of SME owners. In addition, financial literacy has positive influence on savings habit of SMEs owners. Furthermore, the study revealed that age of the SME owners has positive influence savings habit of SME owners. Finally, educational level of the SME owner is also positively related to savings habit of the SME owners. The study therefore recommends that government and NBSSI must offer financial education to SME owners which will help their business operations. Also, National Commission for Civic Education should establish Financial Literacy Information Sharing Group to provide financial literacy education to SMEs owners. Also, government should set up special financial institutions that will cater for the financial needs of SME owners by giving soft loans in order to expand their business.