Analysis of the Impact of Financial Illiteracy on Small and Medium Enterprises’ (ЅMEѕ) Growth in Lusaka’s Central Buѕineѕѕ District, Zambia

The purpose of the tudy was to analyse the impact of financial illiteracy on ME'business ucce in Lusaka's Central Business District. The study used a quantitative paradigm with a self-administered questionnaire being the main data collection instrument in which a cross section of SMEs, namely: Hardware Hair Dreing / barbershops; Computer Service/Buine Centre; Supermarkets; Retaurant/Bar; Photo Studios; Health Service; Boutique/Fashion Stores; Electronic/Electrical Stores; and Butcheries, constituted the target population. The non-probabilistic and probabilistic sampling techniques were used particularly; purposive and random sampling criteria respectively. Out of the 500 target population (N) of SMEs in the subject matter area under review as per record of the local authority, the study sampled 10% which is 50 as sample size selected systemtically. Purpoive ampling wa also ued in this research to select business owners to be interviewed, while random ampling was used to select interviwees from various firms. tratified ampling technique was used at various stages of the study because the study involved a heterogeneous population. Data were analyzed using computer based statistical data analysis package, SPSS (version 16.0). The study revealed, among others, that record keeping kill had a poitive and ignificant effect on growth of ME tudied. It was also revealed that people with more debt management literacy skills were able to generate more wealth through management of the reource more optimally with le financial cot and hence, the need for a more deliberate debt management literacy among ME. The tudy also found that poor budgeting kill were a major caue of failure for the ME. Therefore, it was concluded that financial literacy ha a positive impact on ME ucce in Lusaka; and that ME owner with le financial literacy have le profitability than thoe with a higher financial literacy.