THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE

Selma Dzifa Addo; Joseph Asantey; David Mensah Awadzıe

THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE

Abstract

Purpose – Financial literacy has become an important area of research in recent years. Its significance in making wise financial choices has also been documented in recent studies. In developing economies, business sustainability is a major issue as has been identified in many prior studies. Most SMEs are unable to survive 3 years after establishment. Prior researchers have mostly attributed this to a lack of access to finance. Recently, it has been discovered that financial literacy tends to assist SMEs with the needed skills and knowledge such as understanding the various sources of finance and analyzing different financial choices accurately, in order to be able to make the right financial choices. This study hence examines the impact of financial literacy on risk propensity mediated by access to finance. Methodology – Data for the study was collected from SME owners/managers through structured questionnaires. The questionnaires were administered to 432 SME owners/managers. Descriptive statistics was used in describing the demographic statistics of the respondents. PLS Structural Equation Modeling (SEM) was used for the data analysis. Findings – The study’s hypotheses were confirmed. The findings showed that access to finance partially mediates the association between financial literacy and risk propensity. The relationship between financial literacy and risk propensity was likewise strongly favorable, and it was further established that access to finance significantly impacts on risk propensity. Conclusion ¬– Financial literacy and access to finance both remain a significant aspect of SME sustainability, both have a positive and significant implication for risk propensity. SMEs should hence include financial literacy programs such as workshops and seminars in their annual programs to help improve their financial knowledge since financial literacy impacts both access to finance and risk propensity. Policymakers should also put in more effort in making policies such as financial literacy training compulsory to help improve the financial knowledge of SMEs.

Keywords

References

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Details

Primary Language

English

Subjects

Economics, Finance, Business Administration

Journal Section

Research Article

Authors

Selma Dzifa Addo ^* This is me
0000-0003-0274-3927
Ghana

Joseph Asantey This is me
0000-0003-3607-7766
Ghana

David Mensah Awadzıe This is me
0000-0001-5532-2152
Ghana

Publication Date

December 31, 2022

Submission Date

October 29, 2022

Acceptance Date

December 22, 2022

Published in Issue

Year 2022 Volume: 11 Number: 4

IZ

https://izlik.org/JA56ZM56GU

Cite

RIS / Bibtex

APA

Addo, S. D., Asantey, J., & Awadzıe, D. M. (2022). THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE. Journal of Business Economics and Finance, 11(4), 195-205. https://izlik.org/JA56ZM56GU

AMA

1.Addo SD, Asantey J, Awadzıe DM. THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE. JBEF. 2022;11(4):195-205. https://izlik.org/JA56ZM56GU

Chicago

Addo, Selma Dzifa, Joseph Asantey, and David Mensah Awadzıe. 2022. “THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE”. Journal of Business Economics and Finance 11 (4): 195-205. https://izlik.org/JA56ZM56GU.

EndNote

Addo SD, Asantey J, Awadzıe DM (December 1, 2022) THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE. Journal of Business Economics and Finance 11 4 195–205.

IEEE

[1]S. D. Addo, J. Asantey, and D. M. Awadzıe, “THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE”, JBEF, vol. 11, no. 4, pp. 195–205, Dec. 2022, [Online]. Available: https://izlik.org/JA56ZM56GU

ISNAD

Addo, Selma Dzifa - Asantey, Joseph - Awadzıe, David Mensah. “THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE”. Journal of Business Economics and Finance 11/4 (December 1, 2022): 195-205. https://izlik.org/JA56ZM56GU.

JAMA

1.Addo SD, Asantey J, Awadzıe DM. THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE. JBEF. 2022;11:195–205.

MLA

Addo, Selma Dzifa, et al. “THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE”. Journal of Business Economics and Finance, vol. 11, no. 4, Dec. 2022, pp. 195-0, https://izlik.org/JA56ZM56GU.

Vancouver

1.Selma Dzifa Addo, Joseph Asantey, David Mensah Awadzıe. THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE. JBEF [Internet]. 2022 Dec. 1;11(4):195-20. Available from: https://izlik.org/JA56ZM56GU