Self-service banking and financial literacy as prognosticators of business performance among rural small and medium-sized enterprises in Zimbabwe

Background: This investigation breaks new ground by examining an inventive monetary approach (the utilisation of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy) that, if embraced by rural small and medium-sized enterprises (SMEs), can enhance business performance. Despite the expanded readiness of technology, the significance of rural SMEs has largely been overlooked, particularly in developing countries of Southern Africa. Therefore, the principal objective of this study is to fill this void. Aim: The current study aims to investigate the impact of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy on the business performance of rural SMEs within the agricultural sector of Zimbabwe. Setting: In this study, data were collected in the rural area of Bindura, Zimbabwe. Method: The study utilised a quantitative research design using a structured questionnaire. Data was collected from 151 managers, SME owners and heads of accounting departments within rural SMEs that are operating in the rural area of Bindura. Smart partial least squares was used to analyse the data. Results: Technology-based self-service banking, borrowing financial literacy and budgeting financial literacy had a positive and a significant impact on business performance. Therefore, all three hypotheses were supported. Hence, the study’s findings validate the assertion that prognosticators such as technology-based self-service banking, borrowing financial literacy and budgeting financial literacy are instrumental in stimulating business performance among rural SMEs in Zimbabwe. A robust relationship was also found between budgeting financial literacy and business performance. Conclusion: This study offers fruitful implications to academics by making a significant contribution to finance, accounting and small business management literature by systematically exploring the impact of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy on business performance. This study stands to add new knowledge to the present body of finance, accounting and small business management literature in Africa – a context that is often ignored by academics in developing countries.