ISSN: 2225-8329
Open access
This research aims to investigate financial literacy, investment, and savings behavior among SMEs in Ghana. The population of 300 participants were sampled for the study, quota and purposive sampling methods were used in the selection of participants. Non-probability sampling was used, as it was difficult to precisely determine the probability of selection. The study revealed that most of the participants are less financially literate and this affects their savings behavior. This shows that financial literacy has an enviable influence on an individual’s savings behaviour. The study shows that sex/gender, age, and marital status have statistically enormous effect on savings behaviour. Due to the low level of education which reflects a high level of financial literacy, most of the participants use informal ways to save. To create awareness about finances and their related significance, financial institutions can organize more financial literacy programs to help these SMEs organize their finances and develop interest in savings. The government must put in place measures in building a resilient economy and a positive working environment to help people generate more money or revenue since more will be saved by individuals if more is received or earned.
Adomako, S., Danso, A., & Ofori Damoah, J. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43-61.
Agarwal, S., Qian, W., & Tan, R. (2020). Investment. In Household Finance (pp. 139-173): Springer.
Agyei, Y. A., Kumi, E., & Yeboah, T. (2016). Is better to be a kayayei than to be unemployed: reflecting on the role of head portering in Ghana’s informal economy. GeoJournal, 81(2), 293-318.
Ajzen, I. (1985). From intentions to actions: A theory of planned behavior. In Action control (pp. 11-39): Springer.
Ali, A., Abd Rahman, M. S., & Bakar, A. (2015). Financial satisfaction and the influence of financial literacy in Malaysia. Social Indicators Research, 120(1), 137-156.
Almenberg, J., & Dreber, A. (2015). Gender, stock market participation and financial literacy. Economics Letters, 137, 140-142.
Amagir, A., van den Brink, H. M., Groot, W., & Wilschut, A. (2022). SaveWise: The impact of a real-life financial education program for ninth grade students in the Netherlands. Journal of Behavioral and Experimental Finance, 33, 100605.
Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of financial literacy and investment experience on risk tolerance and investment decisions: Empirical evidence from Pakistan. International Journal of Economics Financial Issues, 6(1).
Ayres, R. (2016). Energy, complexity and wealth maximization: Springer.
Baada, J. N., Baruah, B., & Luginaah, I. (2019). ‘What we were running from is what we’re facing again’: examining the paradox of migration as a livelihood improvement strategy among migrant women farmers in the Brong-Ahafo Region of Ghana. Migration Development, 8(3), 448-471.
Bakar, S., & Yi, A. N. C. (2016). The impact of psychological factors on investors’ decision making in Malaysian stock market: a case of Klang Valley and Pahang. Procedia Economics Finance, 35, 319-328.
Bonello, A. (2019). Understanding the Investor: A Maltese Study of Risk and Behavior in Financial Investment Decisions: Emerald Group Publishing.
Brown, M., Henchoz, C., Spycher, T., & Organization. (2018). Culture and financial literacy: Evidence from a within-country language border. Journal of Economic Behavior, 150, 62-85.
Calcagno, R., & Monticone, C. (2015). Financial literacy and the demand for financial advice. Journal of Banking Finance, 50, 363-380.
Cheah, K. K., Foster, F. D., Heaney, R., Higgins, T., Oliver, B., O’Neill, T., & Russell, R. (2015). Discussions on long-term financial choice. Australian Journal of Management, 40(3), 414-434.
Chen, C.-f., Xu, X., & Day, J. K. (2017). Thermal comfort or money saving? Exploring intentions to conserve energy among low-income households in the United States. Energy Research Social Science, 26, 61-71.
Chuan, C. L., & Penyelidikan, J. (2006). Sample size estimation using Krejcie and Morgan and Cohen statistical power analysis: A comparison. Jurnal Penyelidikan IPBL, 7(1), 78-86.
Chulia, H., Gupta, R., Uribe, J. M., Mone, & Wohar, M. E. (2017). Impact of US uncertainties on emerging and mature markets: Evidence from a quantile-vector autoregressive approach. Journal of International Financial Markets, Institutions, 48, 178-191.
Clark, R., Lusardi, A., & Mitchell, O. S. (2017). Employee financial literacy and retirement plan behavior: a case study. Economic Inquiry, 55(1), 248-259.
Demirguc-Kunt, A., Kane, E., & Laeven, L. (2015). Deposit insurance around the world: A comprehensive analysis and database. Journal of financial stability, 20, 155-183.
Dunska, M., & Kravinskis, K. (2016). Impact of Financial Literacy on Domestic Economic Activity in the Baltic States. In Contemporary Issues in Finance: Current Challenges from Across Europe: Emerald Group Publishing Limited.
Eastburn, R. W., & Sharland, A. (2017). Risk management and managerial mindset. The journal of risk finance.
Edelen, R. M., Ince, O. S., & Kadlec, G. B. (2016). Institutional investors and stock return anomalies. Journal of Financial Economics, 119(3), 472-488.
Eniola, A. A., & Entebang, H. (2016). Financial literacy and SME firm performance. International Journal of Research Studies in Management, 5(1), 31-43.
Erner, C., Goedde-Menke, M., & Oberste, M. (2016). Financial literacy of high school students: Evidence from Germany. The Journal of Economic Education, 47(2), 95-105.
Estelami, H. (2016). Cognitive drivers of suboptimal financial decisions: Implications for financial literacy campaigns. In Financial Literacy and the Limits of Financial Decision-Making (pp. 10-25): Springer.
Farrell, L., Fry, T. R., & Risse, L. (2016a). The significance of financial self-efficacy in explaining women’s personal finance behaviour. Journal of Economic Psychology, 54, 85-99.
Farrell, L., Fry, T. R., & Risse, L. (2016b). The significance of financial self-efficacy in explaining women’s personal finance behaviour. Journal of Economic Psychology, 54, 85-99.
French, D., & McKillop, D. (2016). Financial literacy and over-indebtedness in low-income households. International Review of Financial Analysis, 48, 1-11.
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance Investment, 5(4), 210-233.
Frydman, C., & Camerer, C. F. (2016). The psychology and neuroscience of financial decision making. Trends in cognitive sciences, 20(9), 661-675.
George, B., & Thomachan, K. (2018). Financial inclusion and women empowerment: A gender perspective. nternational Journal of Research-GRANTHAALAYAH, 6(5), 229-237.
Gompers, P. A., Gornall, W., Kaplan, S. N., & Strebulaev, I. A. (2020). How do venture capitalists make decisions? Journal of Financial Economics, 135(1), 169-190.
Grohmann, A., Kouwenberg, R., & Menkhoff, L. (2015). Childhood roots of financial literacy. Journal of Economic Psychology, 51, 114-133.
Haberly, D., MacDonald-Korth, D., Urban, M., & Wójcik, D. (2019). Asset management as a digital platform industry: A global financial network perspective. Geoforum, 106, 167-181.
Hashim, Y. A. (2010). Determining sufficiency of sample size in management survey research activities. International Journal of Organisational Management Entrepreneurship Development, 6(1), 119-130.
Hassan, L. M., Shiu, E., & Shaw, D. (2016). Who says there is an intention–behaviour gap? Assessing the empirical evidence of an intention–behaviour gap in ethical consumption. Journal of Business Ethics, 136(2), 219-236.
Hoegen, A., Steininger, D. M., & Veit, D. (2018). How do investors decide? An interdisciplinary review of decision-making in crowdfunding. Electronic Markets, 28(3), 339-365.
Hoffmann, A. O., Post, T., & Pennings, J. M. (2015). How investor perceptions drive actual trading and risk-taking behavior. Journal of Behavioral Finance, 16(1), 94-103.
Hsiao, Y.-J., & Tsai, W.-C. (2018). Financial literacy and participation in the derivatives markets. Journal of Banking & Finance, 88, 15-29.
Johnson, R. D., Carlson, K. D., & Kavanagh, M. J. (2020). Human resource information systems: Basics, applications, and future directions: Sage Publications.
Jonsson, S., Soderberg, I.-L., & Wilhelmsson, M. (2017). An investigation of the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Managerial Finance.
Junghans, A. F., Cheung, T. T., & De Ridder, D. D. (2015). Under consumers’ scrutiny-an investigation into consumers’ attitudes and concerns about nudging in the realm of health behavior. BMC public health, 15(1), 336.
Kannadhasan, M. (2015). Retail investors' financial risk tolerance and their risk-taking behaviour: The role of demographics as differentiating and classifying factors. IIMB Management Review, 27(3), 175-184.
Kiliyanni, A. L., & Sivaraman, S. (2016). The perception-reality gap in financial literacy: Evidence from the most literate state in India. International Review of Economics Education, 23, 47-64.
Kramer, M. M. (2016). Financial literacy, confidence and financial advice seeking. Journal of Economic Behavior Organization, 131, 198-217.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational psychological measurement, 30(3), 607-610.
Kumar, S., & Goyal, N. (2015). Behavioural biases in investment decision making–a systematic literature review. Qualitative Research in financial markets.
Kumar, S., & Goyal, N. (2016). Evidence on rationality and behavioural biases in investment decision making. Qualitative Research in financial markets.
Lindsay, S., McDougall, C., Menna-Dack, D., Sanford, R., & Adams, T. (2015). An ecological approach to understanding barriers to employment for youth with disabilities compared to their typically developing peers: views of youth, employers, and job counselors. Disability rehabilitation, 37(8), 701-711.
Loerwald, D., & Stemmann, A. (2016). Behavioral finance and financial literacy: Educational implications of biases in financial decision making. In International handbook of financial literacy (pp. 25-38): Springer.
Lucey, T. A. (2016). Preparing preservice elementary teachers to teach about financial literacy: Towards a broader conception. In International handbook of financial literacy (pp. 655-673): Springer.
Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics Statistics, 155(1), 1.
Mahmoud, A. B., Reisel, W. D., Fuxman, L., & Hack?Polay, D. (2022). Locus of control as a moderator of the effects of COVID?19 perceptions on job insecurity, psychosocial, organisational, and job outcomes for MENA region hospitality employees. European Management Review, 19(2), 313-332.
Maman, D., & Rosenhek, Z. (2019). Responsibility, planning and risk management: moralizing everyday finance through financial education. The British Journal of Sociology 70(5), 1996-2019.
Mathis, K., & Steffen, A. D. (2015). From rational choice to behavioural economics. In European perspectives on Behavioural law and economics (pp. 31-48): Springer.
Mesoudi, A., Chang, L., Dall, S. R., & Thornton, A. (2016). The evolution of individual and cultural variation in social learning. Trends in ecology evolution, 31(3), 215-225.
Mishra, K., & Metilda, M. J. (2015). A study on the impact of investment experience, gender, and level of education on overconfidence and self-attribution bias. IIMB Management Review, 27(4), 228-239.
Nelson, J. M., Choi, H.-J., Clark, C. A., James, T. D., Fang, H., Wiebe, S. A., & Espy, K. A. (2015). Sociodemographic risk and early environmental factors that contribute to resilience in executive control: A factor mixture model of 3-year-olds. Child Neuropsychology, 21(3), 354-378.
Ng, A. W., & Tang, W. (2016). Regulatory risks and strategic controls in the global financial centre of China. In The Political Economy of Chinese Finance: Emerald Group Publishing Limited.
Nielbo, K. L., & Sorensen, J. (2016). Attentional resource allocation and cultural modulation in a computational model of ritualized behavior. Religion, Brian Behaviour, 6(4), 318-335.
Nitani, M., Riding, A., & Orser, B. (2020). Self-employment, gender, financial knowledge, and high-cost borrowing. Journal of Small Business Management, 58(4), 669-706.
Oseifuah, E., Gyekye, A., & Formadi, P. (2018). Financial Literacy among Undergraduate Students: Empirical Evidence from Ghana. Academy of Accounting Financial Studies Journal, 22(6), 1-17.
Owusu, E. N. (2016). Assessing the Level of Financial Literacy among Teachers A Case Study of Sekyere East District of Ashanti Region of Ghana.
Pak, O., & Mahmood, M. (2015). Impact of personality on risk tolerance and investment decisions. International Journal of Commerce Management.
Peters, G. W., & Panayi, E. (2016). Understanding modern banking ledgers through blockchain technologies: Future of transaction processing and smart contracts on the internet of money. In Banking beyond banks and money (pp. 239-278): Springer.
Pillai, K. G., Hodgkinson, G. P., Kalyanaram, G., & Nair, S. R. (2017). The negative effects of social capital in organizations: A review and extension. International Journal of Management Reviews, 19(1), 97-124.
Pilz, M., Uma, G., & Venkatram, R. (2015). Skills development in the informal sector in India: The case of street food vendors. International Review of Education, 61(2), 191-209.
Pincus, K. V., Stout, D. E., Sorensen, J. E., Stocks, K. D., & Lawson, R. A. (2017). Forces for change in higher education and implications for the accounting academy. Journal of Accounting Education, 40, 1-18.
Prina, S. (2015). Banking the poor via savings accounts: Evidence from a field experiment. Journal of development economics, 115, 16-31.
Rao, K. (2019). Global Wind Energy and Power Generation Options: Socioeconomic Factors. In Wind Energy for Power Generation (pp. 703-828): Springer.
Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), 327-347.
Roid, G. H., & Koch, C. (2017). Leiter-3: Nonverbal cognitive and neuropsychological assessment. In Handbook of nonverbal assessment (pp. 127-150): Springer.
Sarkis Jr, A. M. (2017). A comparative study of theoretical behaviour change models predicting empirical evidence for residential energy conservation behaviours. Journal of Cleaner Production, 141, 526-537.
Sarnovics, A., Mavlutova, I., Peiseniece, L., & Berzina, S. (2016). Financial literacy enhancement as a task of financial education for Latvian population. In Business Challenges in the Changing Economic Landscape-Vol. 2 (pp. 365-389): Springer.
Sebayang, S. K., Efendi, F., & Astutik, E. (2019). Women’s empowerment and the use of antenatal care services: analysis of demographic health surveys in five Southeast Asian countries. Women health, 59(10), 1155-1171.
Sherraden, M. S., & Ansong, D. (2016). Financial literacy to financial capability: Building financial stability and security. In International handbook of financial literacy (pp. 83-96): Springer.
Stolper, O. A., & Walter, A. (2017). Financial literacy, financial advice, and financial behavior. Journal of Business Economics, 87(5), 581-643.
Sweet, S., Sarkisian, N., Matz-Costa, C., & Pitt-Catsouphes, M. (2016). Are women less career centric than men? Structure, culture, and identity investments. Community, Work Family, 19(4), 481-500.
Tate, W. L., & Bals, L. (2018). Achieving shared triple bottom line (TBL) value creation: toward a social resource-based view (SRBV) of the firm. Journal of Business Ethics, 152(3), 803-826.
Uen, J. F., Chang, H.-C., McConville, D., & Tsai, S.-C. (2018). Supervisory mentoring and newcomer innovation performance in the hospitality industry. International Journal of Hospitality Management, 73, 93-101.
Van Damme, L., Vanderplasschen, W., Fortune, C.-A., Vandevelde, S., & Colins, O. F. (2019). Determinants of female adolescents’ quality of life before, during and after detention: A four-wave follow-up study examining a theory of individual quality of life. Applied Research in Quality of Life, 1-34.
Van Raaij, W. F. (2016). Saving Behavior. In Understanding Consumer Financial Behavior (pp. 33-44): Springer.
Vieira, K. M., Potrich, A. C. G., & Mendes-Da-Silva, W. (2019). A Financial Literacy Model for University Students. In Individual Behaviors and Technologies for Financial Innovations (pp. 69-95): Springer.
Wahid, A. S. (2019). The effects and the mechanisms of board gender diversity: Evidence from financial manipulation. Journal of Business Ethics, 159(3), 705-725.
Waisbord, S. (2020). Family tree of theories, methodologies, and strategies in development communication. Handbook of Communication for Development Social Change, 93-132.
Wardani, L. M. I., & Firmansyah, R. (2019). The Work-Life Balance of Blue-Collar Workers: The Role of Employee Engagement and Burnout. Jurnal Psikologi Ulayat: Indonesian Journal of Indigenous Psychology, 6(2), 227-241.
Worthington, A. C. (2016). Financial literacy and financial literacy programmes in Australia. In Financial Literacy and the Limits of Financial Decision-Making (pp. 281-301): Springer.
Yong, H.-N. A., & Tan, K.-L. (2017). The Influence of Financial Literacy Towards Risk Tolerance. International Journal of Business Society, 18(3).
In-Text Citation: (Bosea et al., 2023)
To Cite this Article: Bosea, V. K., Basuah, P. K., Asare, E., & Barimah, R. T. (2023). Financial Literacy, Investment and Savings Behaviour of Small and Medium Enterprise Operators in Ghana. International Journal of Academic Research in Accounting Finance and Management Sciences, 13(1), 188–197.
Copyright: © 2023 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode