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Does financial literacy matter for firms? An empirical investigation on Sri Lankan SMEs

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  • Geesara Kasthuri Arachchi
  • Ishan Perera
  • Chathurya Gamage
  • Shehara Wijesinghe
  • Krishantha Wisenthige
  • Nirmani Dayapathirana

Abstract

Small and Medium Enterprises (SMEs) are vital to economic growth and job creation, especially in developing countries. However, their potential is not fully utilized due to challenges related to limited financial inclusion, poor resource management, and underdeveloped capital markets. Though financial literacy is well-researched in personal finance, its role as a knowledge resource at the firm level and its impact on firm performance remain underexplored. This study investigates the influence of owner-managers’ financial literacy on firm performance, focusing on the mediating roles of FinTech adoption and access to finance. By taking a sample of 264 SME owner-managers in the Western Province of Sri Lanka, this study found that financial literacy significantly enhances firm performance (β = 0.241, p

Suggested Citation

  • Geesara Kasthuri Arachchi & Ishan Perera & Chathurya Gamage & Shehara Wijesinghe & Krishantha Wisenthige & Nirmani Dayapathirana, 2026. "Does financial literacy matter for firms? An empirical investigation on Sri Lankan SMEs," PLOS ONE, Public Library of Science, vol. 21(7), pages 1-22, July.
    • Handle: RePEc:plo:pone00:0354031
    DOI: 10.1371/journal.pone.0354031
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