Abstract:
The clarion call for the need to equip small and medium-sized enterprise (SME)
with appreciable financial know-how amidst the continuous fall of such
enterprises in emerging markets shows that financial literacy is a primary factor
capable of influencing performance. The study sought to establish how financial
knowledge, financial awareness, and financial attitudes, affect performance of
SMEs in an emerging market. The quantitative study was promised on the
positivist paradigm and executed under the descriptive design. The study
population comprised 780 SMEs operating at the Accra Metropolitan Area of
Ghana. A simple random sampling technique was adopted to sample 258 SMEs
operating in the study area using a structured questionnaire. However, a survey
conducted using 61 selected SMEs at the Adenta Municipal Area as a measure
to assess instrument reliability and validity. Software such as IBM SPSS
Version 21, SmartPLS4 (newest version), and Microsoft Excel were used to
analyze the quantitative data using both descriptive statistical analysis
(frequencies and percentages) and inferential statistical analysis with a focus on
PLS-SEM. The study found a significant positive relationship between financial
knowledge and SME performance. The study also found a significant positive
relationship between financial awareness and SME performance. Regarding
how financial attitudes relates to SME performance, the study uncovered an
insignificant positive relationship. The study recommends the government to
invest in enhancing the financial literacy level of medium scale enterprise
owners through trainings and incorporating financial literacy issues in formal
education.
