Entrepreneur’s Performance and Financial Literacy – A Critical Review
Keywords:
Financial literacy, financial education, entrepreneurs, micro, small and medium enterprises, performanceAbstract
Financial literacy is a necessity for entrepreneurial advancement. Entrepreneurs are regularly involved in making decisions regarding acquisition, allocation and utilization of financial resources to run their business. Small businesses are a backbone of any developing economy, more so for Indian economy, so when the small business owners lack financial literacy skill, the risk is not just limited to their individual business but the economy as a whole. Hence, the critical questions that need to be answered are: Do owners of micro, small and medium enterprises possess enough level of financial literacy to take sound decisions? Does their level of financial literacy significantly explain their use of financial products and services? Does this impact their business performance vis.a.vis their competitors? This paper aims to explore the answers of the above mentioned questions and to assess the level of financial literacy of entrepreneurs based on previous studies, with the purpose of establishing how financial literacy impacts the performance or success of their business. It also focusses on the need and effectiveness of organising training programmes to enhance their financial literacy skills and to have better business outcomes.
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