Financial Literacy and Entrepreneurial Decision-Making Among Informal Traders in Zambia

Financial literacy is crucial in influencing entrepreneurial decision-making, especially for informal traders in Zambia, who work within a dynamic yet financially limited environment. This research examines how financial literacy affects the decision-making processes of informal traders in Lusaka, Zambia. A mixed-methods approach was used, gathering data from 350 informal traders through structured surveys and qualitative interviews. Results indicate that higher levels of financial literacy are associated with better decision-making in areas such as business planning, investment selections, and financial management. Regression analysis findings show that financial literacy is a significant predictor of entrepreneurial decision-making (β = 0.54, p < 0.01). The study highlights the importance of enhanced financial education initiatives to promote business sustainability and economic development among informal traders.