August 5, 2025

Assessing the role of education and financial literacy in shaping the success of spaza shops: Case study of Gamalakhe Township, KwaZulu-Natal, South Africa

Key Points

MAIN FINDING: Education significantly predicts financial literacy levels among spaza shop owners in Gamalakhe Township.
KEY EVIDENCE: Statistical analyses show correlations between higher education and improved business decision-making outcomes.
APPROACH: The study surveyed 100 spaza shop owners and used ordinal logistic regression to analyze the data.
SIGNIFICANCE: Findings stress the need for mentorship programs to improve financial literacy among township entrepreneurs.

Abstract

Background: This study examined how education influences financial literacy (FL) and subsequent business success among spaza shop owners in Gamalakhe Township, KwaZulu-Natal. Aim: This study aimed to investigate whether the level of education is a significant factor in determining the FL skills needed to run spaza shop businesses by surveying 100 spaza shop owners. Setting: The study setting was Gamalakhe Township, KwaZulu-Natal. Methods: The quantitative data were analysed via correlations and ordinal logistic regression. Results: The findings of descriptive statistics and correlations reveal that education significantly predicts FL levels, which in turn drives improved decision-making and business outcomes. Conclusion: The ordinal logistic regression revealed that education level influences the level of FL. Contribution: The findings emphasise the importance of developing experiential learning and mentorship programmes to address FL gaps among township entrepreneurs.

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