Impact of Financial Literacy on Business Development of Women Entrepreneurs in Pakistan

Abstract

The aim of current study was to assess the impact of financial literacy on business development in Pakistan. In this study, financial knowledge, financial management skills, and investment and financing knowledge (representing financial literacy) served as the independent variables. Business development was used as the dependent variable. Women entrepreneurs of SMEs in Pakistan were the study’s intended audience for exploring the connections between the aforementioned variables. Quantitative research method was used, as primary data was collected through adopted questionnaire based on 5-Likert scale. The responses were recorded from 150 respondents (women entrepreneurs of SMEs in Pakistan) through convenience sampling technique. Responses recorded were analyzed by using statistical tests (correlation and regression analysis) with the help of SPSS Software. Findings of correlation analysis have proved significant positive relationship between financial knowledge, financial management skills, and investment and financing knowledge (financial literacy) and business development. Results of regression analysis have highlighted that financial knowledge, financial management skills, and investment and financing knowledge (financial literacy) significantly impacts business development of women entrepreneurs of SMEs in Pakistan. Based on the findings of the study, it is proved that increase in financial literacy or any aspect of it (such as financial knowledge, financial management skills, and investment and financing knowledge) brings a definite increase in business development of women entrepreneurs of SMEs in Pakistan.