Assessing the Effects of Financial Literacy on Entrepreneurs' Performance: A Case Study of Kitwe District, Zambia

This study assessed the effects of financial literacy on the performance of entrepreneurs in Kitwe District, Zambia, focusing on profitability, employment generation, and business sustainability. A quantitative research design was employed, using structured questionnaires to collect data from 50 randomly sampled entrepreneurs. Data were analyzed using descriptive statistics, chi-square tests, t-tests, correlation, and regression analysis. The results reveal that financial literacy exerts a significant positive influence on entrepreneurial performance. Entrepreneurs who received financial training reported higher profits (Mean = 2.94) than their untrained counterparts (Mean = 2.39, p = 0.041). Regression analysis identified cost control understanding as the strongest predictor of profitability (β = 0.335, p = 0.018). Furthermore, financial literacy fostered structured employment growth, with 44% of entrepreneurs hiring at least one new employee and 60% maintaining formal wage budgets. However, long-term sustainability was hindered by poor access to external financing. The study concludes that financial literacy is a pivotal determinant of entrepreneurial success. It is recommended that stakeholders enhance targeted financial literacy programs and improve access to financing to foster sustainable entrepreneurial growth in Zambia.