Impact of Financial Literacy on the Survival of Micro, Small and Medium Scale Enterprises in the North-East, Nigeria

This study investigates the impact of financial literacy on the survival of micro, small and medium enterprises (MSMEs) in North-East, Nigeria, a region marked by economic fragility, insecurity, and limited institutional support. Two research questions guided the study and one hypothesis was tested. A cross-sectional survey design was adopted. The population for the study comprised 400 MSME owners and managers across Bauchi, Gombe, and Taraba States. A structured questionnaire was used for data collection. The questionnaire instrument was validated by three experts for the study. The reliability of the instrument was ascertained using Cronbach Alpha which showed that the clusters achieved co-efficient values of 0.92 and 0.88 respectively for the clusters B1 and B2, with an overall reliability co-efficient value of 0.90. Data related to the research question 1 and 2 was analyzed using mean and standard deviation and for research question 2 Pearson’s correlation was used, while multiple regression was used to test the hypothesis at 0.05 level of significance. The findings of the study revealed that financial literacy levels among MSME operators are moderate to high, with budgeting, record-keeping, and financial decision-making emerging as the most influential predictors of business survival. A strong positive relationship was found between financial literacy and MSME sustainability (r = 0.614, p < 0.01), affirming that financially literate entrepreneurs are more resilient, better at managing risk, and more likely to sustain and grow their businesses. The study concluded that financial literacy plays a significant and positive role in enhancing the survival and sustainability of micro, small, and medium enterprises (MSMEs) in North-East, Nigeria. It was recommended that government agencies, NGOs and microfinance institutions should collaborate to design and deliver regular, sector-specific financial literacy programmes focusing on budgeting, record-keeping, credit management, and financial decision-making.