Financial Literacy and Financial Investment Decision of SMEs in Buea, South West Region of Cameroon

Abstract ―​

The aim of this study is to examine the effect of financial Literacy on the investment decision of small and medium Size enterprises (SMEs) in Buea. A convenient sampling Technique was employed to collect data from 95 SMEs using adopted questionnaires consisting of measuring each variable on five-point likert scale. For data analysis statistical tool, the researcher used structural equation modeling (SEM) through the Smart PLS 4.1 software to analyze the data. The findings show the complete effect of business owner–manager’s financial knowledge, financial Behaviour and financial attitude in converting financial literacy to enhance the firm’s decision making. The research limitation evolves from cross section information observation that solely covers part of the western part of the country. Training courses through strategic orientation on the attitudinal perception of SME business owner-manager and basic business management skills, capacity-building aspect, leadership development as well as networking via relationship marketing and management on financial literacy may have significant effect on SMEs’ financial investment Decision making and growth for the managers in general in Cameroon. The article is one of the first to examine the extent to which financial literacy of SME business owners–managers in Cameroon affect their Investment Decision. The article therefore sets an important benchmark for further research in this area.