Chapter One — 1.1 Background to the Study

Financial Literacy has increasingly attracted the attention of researchers, regulators, and practitioners concerned with business sustainability of informal sector businesses. This growing interest reflects the recognition that financial literacy does not operate in isolation, but interacts with a wider set of institutional and market conditions found within Selected Federal Government Parastatals in Nigeria.

Selected Federal Government Parastatals in Nigeria presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

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 sustainability of informal sector businesses within Selected Federal Government Parastatals in Nigeria 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 sustainability of informal sector businesses — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Financial Literacy on business sustainability of informal sector businesses in Selected Federal Government Parastatals in Nigeria.
2. To assess the extent to which financial literacy influences business sustainability of informal sector businesses within the study area.
3. To identify the challenges associated with financial literacy in relation to business sustainability of informal sector businesses.
4. To recommend strategies for optimizing financial literacy in order to improve business sustainability of informal sector businesses.

1.4 Research Questions

1. What is the effect of financial literacy on business sustainability of informal sector businesses in Selected Federal Government Parastatals in Nigeria?
2. To what extent does financial literacy influence business sustainability of informal sector businesses within the study area?
3. What challenges are associated with financial literacy in relation to business sustainability of informal sector businesses?
4. What strategies can be adopted to optimize financial literacy in order to improve business sustainability of informal sector businesses?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around business sustainability of informal sector businesses. For managers and practitioners within Selected Federal Government Parastatals in Nigeria, the study provides practical insight into how financial literacy can be better managed. Finally, it contributes to the academic literature on entrepreneurship by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

The study is limited to an examination of Financial Literacy and its relationship with business sustainability of informal sector businesses within the context of Selected Federal Government Parastatals in Nigeria. 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.