Abstract

This study investigates the effect of financial literacy on the success of small-scale enterprises in Cameroon. Financial literacy, defined as the knowledge and skills required to make informed and effective financial decisions, plays a crucial role in the management and sustainability of small-scale enterprises. In Cameroon, where small-scale enterprises contribute significantly to economic growth, many entrepreneurs lack essential financial knowledge, leading to business failure. This research examines how financial literacy impacts business success and identifies the key financial skills that are essential for entrepreneurs.

Using a mixed-methods approach, the study collects data through surveys and interviews with small-scale business owners across various sectors in Cameroon. The survey assesses the level of financial literacy among entrepreneurs, focusing on their understanding of budgeting, financial planning, credit management, and investment decisions. The study also measures business success through indicators such as profitability, business growth, and sustainability.

Preliminary results indicate that entrepreneurs with higher levels of financial literacy are more likely to achieve business success. These business owners demonstrate better financial management practices, such as maintaining accurate financial records, controlling expenses, and making informed investment decisions. As a result, they experience greater business growth, profitability, and long-term sustainability.

Conversely, entrepreneurs with low financial literacy face challenges such as poor cash flow management, difficulty accessing financing, and higher risks of business failure. The study highlights the critical role of financial literacy in enabling small-scale enterprises to thrive in a competitive market.

The study concludes that improving financial literacy among small-scale entrepreneurs in Cameroon is vital for enhancing their business success. It recommends the implementation of financial education programs, both at the community and institutional levels, to equip entrepreneurs with the necessary skills to manage their businesses effectively. Additionally, financial institutions should develop tailored products and services that support financial literacy and provide accessible financial resources for small-scale enterprises.

Keywords: Financial literacy, Small-scale enterprises, Business success, Financial management, Cameroon, Entrepreneurship, Business growth, Financial education.