ASSESSMENT OF FINANCIAL LITERACY IN SMALL SCALE BUSINESS SECTOR IN WOLKITE TOWN

Abstract

The objective of this research paper is to examine factors affecting financial literacy of small scale enterprise in Wolkite town. The study was conducted by using descriptive type of research design because this type of research design is used to describe the situations. The researcher used stratified sampling technique to categorize the target population in to different group and selected respondents by using simple random sampling technique from each stratum. Questionnaires were distributed for selected respondents.. Data was collected both from primary and secondary sources; primary data was to collect by using both interview and questionnaires. Interview was conduct from department head and employee. Questionnaire was distributed to the selecting employee’s related leader of the department, secondary data was from published and an published documents. The collected data was use analyzed by using descriptive analysis method according, percentage and frequency count was to analyzed and interpret the data collect form respondents descriptive were table and, with percentage. Majority of business owners have low level of financial level. The performance o f the small business owners would be very low because of their low level of financial level. This majority of the respondents were not understanding business plan update. As concerned on the findings 71% of the small business owners don’t know how to make a cash flow forecast. The researcher recommended Owners of small business in Wolkite town should have learn more about how to make a cash flow forecast. Small business owners should to the ability to read and understand fundamental financial statements, as well as, the ability with numbers. The government should advice for the small business of Wolkite town to they have more experience on the financial literacy