FINANCIAL LITERACY LEVEL OF OWNERS OF MICRO AND SMALL ENTERPRISES IN A CASE OF ADAMA CITY ADMINISTRATIO

Abstract

inancial literacy is becoming a key life skill, for it helps individuals cope up with the very fast paced, digitalized and globalized financial landscape. This study aims at measuring how well the owners MSE in Adama city are financially literate enough; and explaining their financial literacy level through demographic and socio-economic variables. Financial literacy level was measured through three point View such as financial knowledge, behavior and attitude. The researcher was employed explanatory research design and Mixed research approaches was used The target population for this study was the micro and small enterprises that located in six sub cities of Adama city that were involved in manufacturing, construction, urban farming, services and trade economic subsectors. Primary data was used for this study. Data was collected from a sample of 319 MSE owners using self-administered questionnaire. Strata random sampling was employed to select samples. The quantitative data was analyzed using both descriptive and inferential statistics and was presented in both tabular and graphical form Cluster analysis was performed to classify respondents in to higher and lower financial literacy level groups. Majority of the respondents were classified as having higher financial literacy level. In addition, the descriptive analysis discovered that most respondents have the required level of financial knowledge, behavior and attitude. The binary logistic regression results revealed that financial literacy level of MSE owners Adama city can significantly be explained by their gender, level of education, business experience and cultural attitude. The findings recommended that it better if training given for different groups of MSE owners and including in formal education system as one subject, as well make awareness through media