Purpose This paper aims to study the level of financial literacy of entrepreneurs across the globe and its role in financial access and performance of micro, small and medium enterprises (MSMEs) based on a systematic review. The present study identifies the measures to enhance the level of financial literacy for increasing financial access and performance of enterprises.Design/methodology/approach Systematic literature review has been undertaken by identifying 358 studies from various sources. After removing the 237 studies based on selection criteria, 67 studies have been found relevant for the present study.Findings The level of financial literacy of entrepreneurs around the world is generally low. It has been found that financial literacy improves performance of an enterprise, particularly when the funds are readily available as insufficient funds disrupt the operating efficiency of the firm, thereby hindering its growth and survival. The other most important factors i.e. access to formal finance, lending policies of financial institutions, ease of doing business and training programmes have a substantial influence on the survival of the firms. The literature also revealed that there is no standardised methodology to measure the financial literacy of entrepreneurs.Research limitations/implications The study conceptualises a research model which can be used by the policymakers to develop training modules for entrepreneurs. These training modules will contribute to the nation’s economic growth by virtue of enhanced performance and superior financial access.Originality/value This study proposes a hypothesised research model which is one of its kinds to demonstrate the influence of financial literacy on financial access and performance of MSMEs.
Micro, small and medium Enterprises (MSMEs) play a significant role in social and economic development of a country. MSMEs constitute an important segment of the Indian economy in terms of their contribution to the country's industrial production, exports, employment and entrepreneurial base. However, one of the greatest obstacles to the growth and development of MSMEs in industrialised and emerging economies is the access to formal finance. The Government of India has taken several measures to ensure continuous growth of MSMEs, but lack of finance has caused a lot of sickness in the sector. Therefore, an attempt has been made to study the relationship between Credit Flow by Scheduled Commercial Banks (SCBs) and Growth of MSME sector in India using Regression Analysis. The study proceeds with the comparative analysis of the Credit Flow to MSMEs by Domestic SCBs in two states of India, that is, Punjab and Haryana.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.