Financial literacy skills level among small and medium scale businesses: lessons for entrepreneurial decision-making in Lagos, Nigeria

Keywords: Financial literacy, literacy, entrepreneurs, small business, decision-making, Nigeria


Remarking on the strategic significance of Small and Medium Scale Enterprise (SMEs) as critical to any economy growth and employment creation opportunities, there are evidence that support the poor possession of the appropriate financial literacy skills and knowledge, required by SMEs to effectively make entrepreneurial decision, needed for business growth and the overall economic development. Previous studies on the leitmotif of financial literacy skills have largely been interrogated through the prism of financial institutions and as an indicator for gauging inclusion leaving sparse research attention to understand its implications on entrepreneurial decision making among SMEs. This research chasm provoked this study. The aim of this paper to dissect and understand the place of financial literacy skills and knowledge in entrepreneurial decision-making of SMEs. A total of 15 SMEs were recruited on purpose with the semi-structure interview type, used in eliciting qualitative data. A collection of different themes and sub-themes were identified with the application of the NVivo (v.12) qualitative software and analysed with the content qualitative analytical tool. Pattern and level of financial literacy include understanding of financial decision, management of money and implementation of financial decision. SMEs’ financial literacy, required for effective entrepreneurial decision, includes knowledge on profitability, cash management skills and knowledge on investment with accompanied challenges, such as bad financial behaviour, financial irresponsibility and lack of basic education. The study makes a genuine case for the prioritization of the importance of financial literacy skills and knowledge for clear cut entrepreneurial decisionmaking and growth.


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Author Biographies

Samson Adewumi, University of Zululand

Department of Sociology

Simangele Constance Cele, University of Zululand

Department of Sociology


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How to Cite
Adewumi, S., & Cele, S. C. (2023). Financial literacy skills level among small and medium scale businesses: lessons for entrepreneurial decision-making in Lagos, Nigeria. EUREKA: Social and Humanities, (1), 14-26.
Business, Management and Accounting