Influence of financial management skills on accessing finance by entrepreneurs

Abstract

The main aim of this study was to analyse the relationship between financial management skills and access to finance by small, medium, and micro-enterprises. Data was collected using a sample of one hundred and sixty-seven that was collected using purposive and snowballing techniques. The data was collected using a self-completed online questionnaire with questions developed based on binary data and a five-point Likert scale. The Keiser-Meyer-Olkin and Cronbach’s alpha were run to test the research instrument’s construct validity and reliability. Two factors, which are day to day and delegated financial management skills were extracted after conducting an exploratory factor analysis on the financial management skills construct. Logistic regression test was conducted using the Statistical Package for Social Sciences (SPSS) to determine the likelihood of an entrepreneur with financial management skills to access finance. The results from the logistic regression model show that day to day financial management skills significantly influence access to finance by entrepreneurs while delegated financial management skills have no impact on access to finance by small, medium and micro-enterprises.