Financial Literacy: Effectivity on the Profitability of Micro Enterprises in Brgy. Fatima, General Santos City

The objective of the study was to investigate the impact of financial literacy on the profitability of micro enterprises in Brgy. Fatima, General Santos City. The study aimed at examining the effect of financial knowledge on the profitability of micro enterprises in Brgy. Fatima, Gencral Santos City, the effect of financial behavior on profitability of micro enterprises in Brgy. Fatima, General Santos City, and the effect of financial attitude on profitability of micro enterprises in Brgy. Fatima, General Santos City, and to determine if there is a significant effect of financial knowledge, financial behavior, and financial attitude on the profitability of micro enterprises in Brgy. Fatima, General Santos City.

The study used a descriptive research method for obtaining necessary primary data to give clear understanding of the research objectives. This research design helped in observing the effects of financial knowledge, financial behavior and financial attitude on the profitability of micro enterprises in Brgy. Fatima, General Santos City. The study involved samples drawn from micro enterprises in Brgy. Fatima, General Santos City that own or manage micro enterprises. To achieve the objectives, a deductive approach was used, where primary data was gathered through issuing of a set of structured questionnaires to a sample population of 216 respondents that have their own businesses. Cluster probability sampling was used to randomly select respondents according to their classifications of business to collect data.
A descriptive statistics and inferential statistics was employed for analyzing the impact of financial literacy on profitability of micro enterprises. A Correlation analysis was used to find out the relationship between financial knowledge, financial behavior and financial attitude and profitability. Linear Regression analysis of variance, frequency distribution and cross tabulations was used to analyze the findings. The data gathered was presented using frequency tables.

The study examined how financial knowledge affects the profitability of micro enterprises of Brgy. Fatima, General Santos City. The findings suggest that most of the respondents are financially knowledgeable as the greater percentage of them answered the financial knowledge questions drawn from the OECD questionnaire on time value of money, diversification, and risk and return correctly except for the most effective sources of finance for startup businesses. The study, however, reveals that financial knowledge is not significant in profitability of micro enterprises.

The study assessed the effects of financial behavior on the profitability of micro enterprises in Brgy. Fatima, General Santos City. The study found that majority of the enterprises are consistent with preparing written financial objectives and budgets, and using them to monitors performance. Also, they are able to access various sources of finance, knowledgeable on effects of inflation and interest rate and conversant with making accurate calculations. The respondents are aware of the benefits of saving money in order to run their businesses more effectively and to help their expansion in the future. Furthermore, the respondents prepare financial statements and they can make decisions from information from financial statements. Hence, this study found that financial behavior significantly affects the profitability of micro businesses.

The study examined how financial knowledge affects the profitability of micro enterprises of Brgy. Fatima, General Santos City. The study observed that most the respondents have positive attitude when it comes to setting financial targets for the future. The study reveals that the business owners are agree on aspects of time orientation being long-term and the influence of social environment on money management skills. The study also found that majority of the business owners believe in risk prevention as a way of ensuring security of their businesses and they have the attitude of attempting to acquire more financial skills through training programs. The study established that there is a significant relationship between profitability and financial attitude of micro enterprises.