Financial literacy and SMEs’ potential entrepreneurs: The case of Malaysia

Malaysia, like many other countries, is depending on Small and Medium Enterprises (SMEs) activities in generating national income, creating job opportunities and tapping local and overseas market. As such country like Malaysia is putting a great effort to nurture entrepreneurs to become SME players by providing infrastructure, inancial assistance, skills, training and conducive ecosystem for entrepreneurial development. One of the important aspects to address is the ability of the entrepreneurs to manage inancial matters effectively. The ability, so called inancial literacy, is important for the survival of the enterprise, as acknowledged by many. Practitioners and researchers have proved the signiicance of inancial literacy in determining the success and failure of enterprise management, particularly among young entrepreneurs. As such it is important to understand and investigate the level of inancial literacy among entrepreneurs. This paper is presenting a case to investigate the level of inancial literacy among the participants of an entrepreneur development program, organised by a State in Malaysia, through a special program entrusted to an implementing agency. The objective of the program is to nurture potential entrepreneurs to develop the development corridor gazetted by the Federal Government in the State. Since the success of this program is critical to the overall objective of the gazetted development corridor this paper intends to investigate the level of inancial literacy among the participants, as the main objective of the case. Accordingly, the next objective is to enlighten the importance of enhancing inancial literacy so as to provide input to the policy makers and implementing agencies in relevant projects. By employing quantitative approach through questionnaire survey and interview, this paper found that the level of inancial literacy among SMEs' players, particularly those selected to be nurtured as new entrepreneurs is still alarming As such this paper advocates the importance of education in inancial management among selected participants of entrepreneurial development program as well as formulating a sound monitoring system as part of a good ecosystem in nurturing entrepreneurs to become SME players. Finally the inding of this paper offers an insight evidence to strengthen inancial literacy theory, therefore, this paper makes some suggestion regarding the potential coverage of a more comprehensive future study.