Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between financial literacy and business survival rate of small and medium enterprises (smes) has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Ogun State where operating conditions differ markedly from more developed markets.

Within the context of Ogun State, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of financial literacy on business survival rate of small and medium enterprises (smes), making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

While financial literacy is widely discussed in policy and industry circles, empirical evidence on its actual effect on business survival rate of small and medium enterprises (smes) within Ogun State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to financial literacy are helping or hindering business survival rate of small and medium enterprises (smes) — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Financial Literacy on business survival rate of small and medium enterprises (smes) in Ogun State.
2. To assess the extent to which financial literacy influences business survival rate of small and medium enterprises (smes) within the study area.
3. To identify the challenges associated with financial literacy in relation to business survival rate of small and medium enterprises (smes).
4. To recommend strategies for optimizing financial literacy in order to improve business survival rate of small and medium enterprises (smes).

1.4 Research Questions

1. What is the effect of financial literacy on business survival rate of small and medium enterprises (smes) in Ogun State?
2. To what extent does financial literacy influence business survival rate of small and medium enterprises (smes) within the study area?
3. What challenges are associated with financial literacy in relation to business survival rate of small and medium enterprises (smes)?
4. What strategies can be adopted to optimize financial literacy in order to improve business survival rate of small and medium enterprises (smes)?

1.5 Significance of the Study

Beyond its academic contribution to the field of entrepreneurship, this study has practical value for management teams within Ogun State seeking to understand how financial literacy translates into measurable outcomes around business survival rate of small and medium enterprises (smes). It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

The study is limited to an examination of Financial Literacy and its relationship with business survival rate of small and medium enterprises (smes) within the context of Ogun State. It reflects a MSc-level scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.