Article type
Abstract
Micro, small, and medium-sized enterprise (MSME) owners generally have low financial literacy, hence it may help to provide financial literacy interventions to support business engagement and practices, improve firm performance and welfare. With reference to the evidence and gap map on improving financial access for MSMEs, studies on financial literacy interventions are filtered out and examined for systematic review and meta-analysis looking at the summary of effects on financial literacy and knowledge, financial behavior, firm performance, economic, as well as gender outcomes.
Meta-regression and decomposition analysis that account for moderating factors such as study design, intervention characteristics, demographic characteristics, firm size, and country income are used to supplement this analysis. Critical appraisal was conducted to assess and discuss study designs, risk of bias, and other biases from the included studies.
Fifty-two studies were included in this systematic review that employed rigorous evaluation methods to determine the causal relationship between financial literacy interventions and a number of outcomes. Even though there are a relatively large number of studies, only one study was able to fulfill all the requirements for being labeled as having a high level of overall confidence in the study findings based on the risk of bias assessment. Much of the evidence is concentrated in Sub-Saharan Africa, although it does come from a range of countries.
Findings claim that financial literacy interventions for MSMEs seem to have positive impacts on firm performance and welfare. However, these impacts are small, albeit significant.
Larger effect sizes are also observed in studies with multi-component interventions across all outcomes. This can indicate that interventions are more effective when bundled with other financial access interventions.
The review finds that financial literacy interventions have positive impacts on an array of varying outcomes especially financial behavior, firm performance, and economic outcomes. Such findings suggest that improving financial access is vital to MSMEs’ development through financial literacy training or education programs. Another point is that most studies assessing financial literacy interventions do not measure financial literacy outcome. This can be an opening to explore more indicators for financial literacy and knowledge for it to be properly assessed.
Meta-regression and decomposition analysis that account for moderating factors such as study design, intervention characteristics, demographic characteristics, firm size, and country income are used to supplement this analysis. Critical appraisal was conducted to assess and discuss study designs, risk of bias, and other biases from the included studies.
Fifty-two studies were included in this systematic review that employed rigorous evaluation methods to determine the causal relationship between financial literacy interventions and a number of outcomes. Even though there are a relatively large number of studies, only one study was able to fulfill all the requirements for being labeled as having a high level of overall confidence in the study findings based on the risk of bias assessment. Much of the evidence is concentrated in Sub-Saharan Africa, although it does come from a range of countries.
Findings claim that financial literacy interventions for MSMEs seem to have positive impacts on firm performance and welfare. However, these impacts are small, albeit significant.
Larger effect sizes are also observed in studies with multi-component interventions across all outcomes. This can indicate that interventions are more effective when bundled with other financial access interventions.
The review finds that financial literacy interventions have positive impacts on an array of varying outcomes especially financial behavior, firm performance, and economic outcomes. Such findings suggest that improving financial access is vital to MSMEs’ development through financial literacy training or education programs. Another point is that most studies assessing financial literacy interventions do not measure financial literacy outcome. This can be an opening to explore more indicators for financial literacy and knowledge for it to be properly assessed.