Finance and Operation Analyst, DEEWS Gh Ltd, Accra, Ghana.
World Journal of Advanced Research and Reviews, 2025, 25(01), 602-620
Article DOI: 10.30574/wjarr.2025.25.1.0059
Received on 28 November 2024; revised on 16 December 2024; accepted on 18 December 2024
This paper aims at understanding and establishing how the assessable financial risks impact the entrepreneurs in emergent markets affecting their business sustainability and growth. This paper aims at establishing how these risks can be managed and performance of SMEs in developing economies improved through use of financial literacy. The study explores the complexity of efficiency of financial literacy, risk management, and business performance in emerging markets. This research uses both the systematic review of the available literature, which includes academic articles, policy papers, and economic reports. The literature review concentrates on research undertaken across several emerging markets to understand the effectiveness of financial literacy interventions on SME performance and risk management programmes implemented. The study uses a mixed-methods approach, where the use of financial data generates objective performance data on fund uses while interviews and surveys provide subjective information regarding the entrepreneurs decision making and their risk propensity. The results present positive significant relationship between entrepreneurs’ financial literacy and efficiency of risk management. here is evidence that SMEs owned and controlled by financially educated owners have better access to formal credit, more credit sources, and better cash flows. It also confirms that these businesses have improved ability to respond to shocks in the economy and manage volatilities in the market. Additionally, the research establishes certain areas of financial literacy that have the largest effect on minimizing risk such as: financial statement knowledge, credit knowledge, and investment knowledge. The study also supports the need for targeted financial literacy interventions. It underscores the fact that almost all types of interventions should take into account the local economic status, culture, and the characteristics of various business sectors in terms of risk exposures. The paper also explores possibilities of technology-based solutions in increasing embracement of financial literacy as well as covering more entrepreneurs that are not reached by classical approaches. This paper finds that the improvement of financial literacy levels in emerging economy entrepreneurs is a key factor that should be adopted to lessen financial risks affecting the SMEs. It underscores the importance of a partnership approach to the development of effective and comprehensive financial literacy initiatives by and for policy makers, financial organizations, and educational entities. The study underscores important implications for engineering applicable interventions that can enable the kindled business people choose appropriate financial solutions that will foster the economic growth of the emerging markets.
Financial literacy; Emerging markets; Entrepreneurs; SMEs; Risk mitigation; Risk management; Business performance; Financial inclusion; Financial education; Business sustainability
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Glenda M Senaya. Mitigating financial risks for entrepreneurs in emerging markets through financial literacy. World Journal of Advanced Research and Reviews, 2025, 25(01), 602-620. Article DOI: https://doi.org/10.30574/wjarr.2025.25.1.0059.
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