Chapter One — 1.1 Background to the Study

Financial Literacy has increasingly attracted the attention of researchers, regulators, and practitioners concerned with business survival rate of small and medium enterprises (smes). 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 Small and Medium Enterprises in Nigeria.

Selected Small and Medium Enterprises 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

Despite a growing body of literature on financial literacy, there remains limited consensus on the precise nature of its relationship with business survival rate of small and medium enterprises (smes), particularly within Selected Small and Medium Enterprises in Nigeria. Many organizations continue to make decisions about financial literacy without a clear, evidence-based understanding of how those decisions ultimately affect business survival rate of small and medium enterprises (smes). This gap between practice and empirical understanding is the central problem this study seeks to address.

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 Selected Small and Medium Enterprises in Nigeria.
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 Selected Small and Medium Enterprises in Nigeria?
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

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 survival rate of small and medium enterprises (smes). For managers and practitioners within Selected Small and Medium Enterprises 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

In terms of scope, this study confines itself to Selected Small and Medium Enterprises in Nigeria, focusing specifically on how financial literacy relates to business survival rate of small and medium enterprises (smes) within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.