Financial Literacy and Entrepreneurial Success among Small and Medium Enterprises in Ekiti State, Nigeria: An Empirical Analysis

This study empirically examines the relationship between financial success and entrepreneurial success of small and medium enterprises (SMEs) in Ekiti State, Nigeria. Based on a survey of 100 SME owners, the study examines how financial skills and financial knowledge influence business growth, operationalized as sales, customer base, asset, and profitability growth. Descriptive analysis confirms that SME owners possess medium to high levels of financial literacy and business growth. Pearson correlation analysis confirms that financial knowledge, financial skills, and business growth all possess significant positive correlations. Multiple regression analysis also shows that business growth is predicted best by financial knowledge (β = 0.835, p = 0.001) and financial skills (β = 0.921, p < 0.001), and years in business also have a positive contribution (β = 0.163, p < 0.001). The model accounts for 90.6% of the variance in business growth (R² = 0.906), demonstrating the critical role financial literacy plays in entrepreneurial success. However, education level has no statistically significant direct impact when the other variables are controlled. Implications of the findings call for targeted financial literacy interventions on less experienced business owners and women entrepreneurs. The study provides actionable suggestions to policymakers, development institutions, and financial institutions that are keen on optimizing SME growth and sustainability in developing economies.