Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs
The knowledge on financial management highly matters as it assists the micro-entrepreneurs in the making of right and sustainable business decisions. This research seeks to examine the effects of financial literacy on microenterprise decision-making in order to improve rational decision-making in fi...
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| Format: | Article |
| Language: | English |
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MDPI AG
2025-01-01
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| Series: | Administrative Sciences |
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| Online Access: | https://www.mdpi.com/2076-3387/15/1/24 |
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| author | Vicente González-Prida Diana Pariona-Amaya Juan Manuel Sánchez-Soto Sonia Luz Barzola-Inga Uldarico Aguado-Riveros Fabricio Miguel Moreno-Menéndez Mark David Villar-Aranda |
| author_facet | Vicente González-Prida Diana Pariona-Amaya Juan Manuel Sánchez-Soto Sonia Luz Barzola-Inga Uldarico Aguado-Riveros Fabricio Miguel Moreno-Menéndez Mark David Villar-Aranda |
| author_sort | Vicente González-Prida |
| collection | DOAJ |
| description | The knowledge on financial management highly matters as it assists the micro-entrepreneurs in the making of right and sustainable business decisions. This research seeks to examine the effects of financial literacy on microenterprise decision-making in order to improve rational decision-making in financial management. A structured questionnaire with Likert-scaled options was used to measure micro-entrepreneurs’ financial decision-making capacity in terms of information processing and decision-making. They demonstrate a favorable relationship between financial education and rationality, which refers to micro-entrepreneurs’ capacity to select from a range of acceptable options. Based on the findings presented in this research, it is suggested that greater efforts should be paid to the integration of financial literacy within any form of entrepreneurial training targeting improvement in sustainability dimensions and qualities of decisions made by micro-entrepreneurs. Through increased financial knowledge, micro-entrepreneurs can manage financial problems effectively and thereby support the growth of sustainable microenterprises. Moreover, such observations suggest that all future policies must focus on and incorporate financial literacy as the defining strategy towards the improvement of the microenterprise sector and, therefore, economic growth. |
| format | Article |
| id | doaj-art-ee410094d8264ad79522908b3b3206c5 |
| institution | Kabale University |
| issn | 2076-3387 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Administrative Sciences |
| spelling | doaj-art-ee410094d8264ad79522908b3b3206c52025-01-24T13:15:21ZengMDPI AGAdministrative Sciences2076-33872025-01-011512410.3390/admsci15010024Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEsVicente González-Prida0Diana Pariona-Amaya1Juan Manuel Sánchez-Soto2Sonia Luz Barzola-Inga3Uldarico Aguado-Riveros4Fabricio Miguel Moreno-Menéndez5Mark David Villar-Aranda6Department of Industrial Management I, University of Seville, 41092 Seville, SpainFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruFaculty of Administrative and Accounting Sciences, Peruvian University of Los Andes, Huancayo 12000, PeruThe knowledge on financial management highly matters as it assists the micro-entrepreneurs in the making of right and sustainable business decisions. This research seeks to examine the effects of financial literacy on microenterprise decision-making in order to improve rational decision-making in financial management. A structured questionnaire with Likert-scaled options was used to measure micro-entrepreneurs’ financial decision-making capacity in terms of information processing and decision-making. They demonstrate a favorable relationship between financial education and rationality, which refers to micro-entrepreneurs’ capacity to select from a range of acceptable options. Based on the findings presented in this research, it is suggested that greater efforts should be paid to the integration of financial literacy within any form of entrepreneurial training targeting improvement in sustainability dimensions and qualities of decisions made by micro-entrepreneurs. Through increased financial knowledge, micro-entrepreneurs can manage financial problems effectively and thereby support the growth of sustainable microenterprises. Moreover, such observations suggest that all future policies must focus on and incorporate financial literacy as the defining strategy towards the improvement of the microenterprise sector and, therefore, economic growth.https://www.mdpi.com/2076-3387/15/1/24decision makingfinancial educationmicro-entrepreneursrational decisionssmall and medium enterprises (SME)sustainability |
| spellingShingle | Vicente González-Prida Diana Pariona-Amaya Juan Manuel Sánchez-Soto Sonia Luz Barzola-Inga Uldarico Aguado-Riveros Fabricio Miguel Moreno-Menéndez Mark David Villar-Aranda Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs Administrative Sciences decision making financial education micro-entrepreneurs rational decisions small and medium enterprises (SME) sustainability |
| title | Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs |
| title_full | Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs |
| title_fullStr | Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs |
| title_full_unstemmed | Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs |
| title_short | Exploring the Effects of Financial Knowledge on Better Decision-Making in SMEs |
| title_sort | exploring the effects of financial knowledge on better decision making in smes |
| topic | decision making financial education micro-entrepreneurs rational decisions small and medium enterprises (SME) sustainability |
| url | https://www.mdpi.com/2076-3387/15/1/24 |
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