FINANCIAL LITERACY AND ENTREPRENEURIAL TRAITS AS DETERMINANTS OF THE SMALL AND MEDUIM-SCALE ENTERPRISES’ PROFITABILITY IN OGUN STATE

Abstract

This study was carried out to investigate how financial literacy and entrepreneurial traits determine the profitability of SMEs in Ogun State, Nigeria. It is used a descriptive survey to obtain a structured description of the population and understand the impact of financial literacy and entrepreneurial traits on SME profitability in Ogun State. The sample consists of 1,005 SME entrepreneurs selected from 15 local government areas across the three senatorial districts of Ogun State. Five LGAs (three urban and two rural) were purposely selected from each of the three senatorial districts in Ogun State. Descriptive statistics and multiple regression analysis were used in analysing the data. Our findings reveal a low level of SME profitability. The study also found that financial literacy and entrepreneurial traits significantly contribute to SMEs’ profitability in Ogun State. Based on the findings and conclusion, it was recommended, amongst others, that awareness should be created among SME entrepreneurs on the relevance of financial literacy and entrepreneurial skills through training programs in order to equip them with the financial literacy skills necessary for business operations.

Keywords

• financial knowledge
• entrepreneurs
• net profit margin
• risk-taking
• innovativeness