Financial Literacy of MSMEs in Vizianagaram District – A Study on Critical Factors of Select Variables
Keywords:
Financial Literacy, Entrepreneurship Development, Financial InstitutionsAbstract
MSMEs form an integral part of any economy. Nevertheless the significance of MSMEs demonstrates a very low survival rate, especially within the first five years of trade. As financial literacy is gaining momentum both in developed economies with sophisticated financial systems and developing countries with low levels of financial services, this research seeks to establish a formal relationship between financial literacy and access to finance. The purpose of this paper is to analyze the level of financial literacy in Vizianagaram District of Andhra Pradesh with the aim of establishing how financial literacy impacts entrepreneurship development. Data from a sample of 365 business units has been interpreted keeping in view the objectives of the study and inferences are drawn. Though some working hypotheses were formed to justify the relationship between variables but in some places Chi – square test, Fisher’s Exact test and Z test had been conducted to test the association between variables. The results reinforce the findings that the financial awareness and competent use of financial services is very low in the district. Some policy recommendations have been proposed for entrepreneurs, financial institutions and policy makers.
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