Financial Literacy and Investment Decisions of Small and Medium Enterprises in Nigeria
Keywords:
Financial literacy, financial knowledge, financial attitude, regulatory awareness, investment decisions, SMEs, NigeriaAbstract
This study investigates financial literacy and investment decisions of Small and Medium Enterprises (SMEs) in Nigeria. Specifically, it examines the relationship between financial knowledge and sales growth, financial attitude and investment outcomes, and regulatory awareness and investment choices. Using a quantitative research design, data were collected from 109 SME managers through an online structured survey. Descriptive and inferential statistical analyses, including Pearson correlation, were employed to test the hypotheses. The findings reveal a strong positive correlation between financial knowledge and sales growth (r = 0.893, p < 0.01), indicating that enhanced financial literacy significantly improves business performance. Financial attitudes, particularly continuous learning and risk-taking, positively influence investment outcomes, though risk aversion remains prevalent due to Nigeria's volatile economic environment. Additionally, awareness of financial regulations shows a significant positive relationship with investment choices (r = 0.904, p < 0.01), guiding SMEs toward more compliant and secure investments. The study recommends targeted financial literacy programs, improved access to affordable professional financial advice, and enhanced regulatory awareness initiatives to strengthen SME performance and sustainability in Nigeria.
Keywords: , , , , , ,
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