Financial Literacy of Small Business Owners, Financial Records Keeping and Enterprise Performance in the Tarkwa- Nsuaem Municipalilty

ABSTRACT The purpose of the study was to examine financial literacy of small business owners, financial records keeping and enterprise performance in the TarkwaNsuaem Municipality of Ghana. Financial literacy level and operating performance of those enterprises as a measure of business economic performance was examined. In addition, the study examined financial records kept by small business owners. It was an explanatory study which employed quantitative methodology and survey strategy. Findings were based on responses from 120 small business owners, comprising 60 retailers, 30 artisans and 30 food manufacturers. Data was analyzed using Descriptive Statistics, Index Pool, Chi-square Test for independence, Independent Sample T-Test and Linear Regression. The study revealed that there is a weak positive correlation between the financial literacy and performance of small business enterprises. It came out from the results that most small business owners are confronted with some complicated financial decisions in running and managing their businesses. Most small business owners’ lack of knowledge, skill and attitude to manage the finances of their organization in a professional way poses a significant obstacle to performance growth of sustainable small scale enterprises. Finally, it can be concluded that the financial literacy of small business owners have a significant influence on small business performance. Developments in the financial markets make financial literacy increasingly important for financial well-being. Therefore, in order to boost the financial literacy of small business owners within the municipality, policy makers should specifically design programs and workshops targeted at further enhancing the financial literacy levels of these owner-managers.