Financial Literacy in Micro- Small- Medium-sized Enterprises

Metadata

Author(s): Balázsi Gabriella

Publisher: Nemzetközi Oktatási és Kutatási Központ Alapítvány

Volume: July 2025

Volume number: 34

Issue number: 7

Journal: Hungarian Quality Journal

ISSN (Print): ISSN 1416‑9576

ISSN (Online): ISSN 1789-5510

Pages: 67–89

Keywords: kis- és középvállalkozások, mikro, financial literacy, financial behaviour, entrepreneurial competencies, financial decision-making

Abstract

Relevance: Financial literacy significantly impacts MSME performance and competitiveness.
Purpose: To assess financial literacy levels among Hungarian MSMEs and self-employed individuals, integrating financial and entrepreneurial competencies into the analysis.
Methods: This study utilised a custom-designed questionnaire created specifically for its purposes, and was administered to small business owners. Based on the OECD’s three-dimensional model such as financial knowledge, financial behaviour, financial attitude, nevertheless this work proposes an expanded construct, split the financial knowledge dimension into two separate sub-dimensions, theoretical and operational ones. Financial behaviour and financial attitud dimensions are align with entrepreneurial competencies approved by the European Comission. Quantitative analysis included descriptive statistics, Welch t-tests.
Results: Financial knowledge scores varied significantly by business size and age, with larger and more established firms exhibiting higher literacy. Behavioural and attitudinal dimensions revealed patterns of “financially savvy” decision-making among experienced entrepreneurs, while smaller and younger firms displayed gaps in financial planning and risk management.
Conclusion: The study confirms that MSME financial literacy in Hungary is unevenly distributed, with entrepreneurial experience and firm maturity linked to stronger, higher-level competencies. The proposed integrated construct offers a more precise tool for assessing business-oriented financial literacy, informing targeted education and support initiatives.

Download article

References

2. 2009.évi CXV.törvény az egyéni vállalkozóról és az egyéni cégről*. Hatályos jogszabályok gyűjteménye (Forrás – Wolters Kluwer)
3. Ábel István és Tóth Orsolya Éva (2023) The financial literacy of SMEs. In: SDGs in practice – how to operate sustainable? Budapesti Gazdasági Egyetem, Budapest, Magyarország, pp. 62-75. ISBN 978-615-6342-69-0
4. Alberti, M., & Asso, P. F. (2024). Hazel Kyrk and the rise of empirical research in interwar America. Journal of the History of Economic Thought, 1-23.
5. Alperovych, Y., Calcagno, R., & Lentz, M. (2024). Entrepreneurs on their financial literacy: evidence from the Netherlands. Venture Capital, 26(4), 377-400.
6. Anghel, B., Lacuesta, A., & Tagliati, F. (2021). 2021 Survey of Small Enterprises’ Financial Literacy: Main Results (Encuesta de Competencias Financieras en las pequeñas empresas 2021: principales resultados). Banco de Espana Occasional Paper, (2129).
7. Anghel, Brindusa., Lacuesta, A., & Tagliati, F. (2021). 2021 Survey of Small Enterprises’ Financial Literacy: Main Results (Encuesta de Competencias Financieras en las pequeñas empresas 2021: principales resultados). Banco de Espana Occasional Paper, (2129).
8. APA Dictionary of Psychology (Updated on 11/15/2023) https://dictionary.apa.org
9. Atkinson, A. (2017), “Financial Education for MSMEs Potential Entrepreneurs”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 43, OECD Publishing,Paris.
10. Atkinson, A., & Messy, F. A. (2012). Measuring financial literacy: Results of the OECD/International Network on Financial Education (INFE) pilot study.
11. Bacigalupo, M., Kampylis, P., Punie, Y., & Van den Brande, G. (2016). EntreComp: The entrepreneurship competence framework. Luxembourg: Publication Office of the European Union, 10, 593884.
12. Berman, K., & Knight, J. (2006). Financial intelligence, Business Literacy Institute. INC, Harvard Business School, Boston.
13. Berman, K., Knight, J., & Case, J. (2008). Financial intelligence for entrepreneurs: What you really need to know about the numbers. Harvard Business Press.
14. Boersch-Supan, Axel; Coppola, Michaela; Essig, Lothar; Eymann, Angelika, and Schunk,Daniel (2009). “The German SAVE study. Design and Results.” Mannheim Research Institute for the Economics of Aging (MEA) University Mannheim.
15. Börsch-Supan, A., Coppola, M., Essig, L., Eymann, A., & Schunk, D. (2008). The German SAVE study: design and results. None
16. Brown, R. B., Saunders, M. N., & Beresford, R. (2006, June). You owe it to yourself: The financially literate manager. In Accounting Forum (Vol. 30, No. 2, pp. 179-191). No longer published by Elsevier.
17. Buchdadi, A. D., Sholeha, A., & Ahmad, G. N. (2020). The influence of financial literacy on SMEs performance through access to finance and financial risk attitude as mediation variables. Academy of Accounting and Financial Studies Journal, 24(5), 1-15.
18. Caliendo, M., Fossen, F., & Kritikos, A. S. (2014). Personality characteristics and the decisions to become and stay self-employed. Small Business Economics, 42, 787-814.
19. Competency Initiatives in Professional Psychology 2018
20. Contreras, O., & Bendix, J. (2021). Financial literacy in the United States. Milken Institute. Retrieved Dec, 6(2022), 2021-08.
21. Ćumurović, A., & Hyll, W. (2019). Financial literacy and self‐employment. Journal of Consumer Affairs, 53(2), 455-487.
22. Eniola, A. A., & Entebang, H. (2017). SME managers and financial literacy. Global Business Review, 18(3), 559-576.
23. Executive Summary: OeNB Report 2024/13: International Survey of Adult financial Literacy 2023: erste Ergebnisse für Österreich (PDF, 99 kB) Research Article: 2020 Vol: 24 Issue: 5
24. Fernandes, 2015; OECD, 2020; OECD/INFE Survey, 2020; Muñoz-Céspedes, 2023.
25. Fernandes, T. I. M. (2015). Financial literacy levels of small businesses owners and it correlation with firms’ operating performance (Master’s thesis, Universidade do Porto (Portugal)).
26. Freisinger, E., Heidenreich, S., Landau, C., & Spieth, P. (2021). Business model innovation through the lens of time: an empirical study of performance implications across venture life cycles. Schmalenbach journal of business research, 73, 339-380.
27. Goyal, K., & Kumar, S. (2021). Financial literacy: A systematic review and bibliometric analysis. International Journal of Consumer Studies, 45(1), 80-105. Published: 20 Nov 2024
28. Gruber, M., MacMillan, I. C., & Thompson, J. D. (2012). From minds to markets: How human capital endowments shape market opportunity identification of technology start-ups. Journal of management, 38(5), 1421-1449.
29. Hanson, T. A., & Olson, P. M. (2018). Financial literacy and family communication patterns. Journal of behavioral and experimental finance, 19, 64-71.
30. https://en.m.wikipedia.org/wiki/Welchs_t-test Center for Retirement Research
31. https://hrmhandbook.com/hrm/skills-competencies/meaning-definition/
32. Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance: An analysis of enterprises in the UK.
33. Huston, S. J. (2010). Measuring financial literacy. Journal of consumer affairs, 44(2), 296-316.
34. IS, R., KV, S., & Hungund, S. (2024). MSME/SME Financial Literacy: A Systematic Literature Review and Bibliometric Analysis. Journal of the Knowledge Economy, 1-28.
35. Jenei, Sz., Módosné Szalai, Sz., Leicht, F., Molnár, S., Varga, E., & Poór, J. (2024). The workforce challenges of disabled people in Hungary and Slovakia during the COVID-19 pandemic. Alter, 18(3), 23–49. https://doi.org/10.4000/alter.6467
36. Johansson Sevä, I., Vinberg, S., Nordenmark, M., & Strandh, M. (2016). Subjective well-being among the self-employed in Europe: macroeconomy, gender and immigrant status. Small business economics, 46, 239-253
37. Kraaijenbrink, J. (2011). Human capital in the resource-based view. The Oxford handbook of human capital, 218-237.
38. Kurochkina, A. A., Voronkova, O. V., Lukina, O. V., & Bikezina, T. V. (2019). Management features of small and medium-sized business enterprises. Revista Espacios, 40(34).
39. Li, Y., Li, Z., Su, F., Wang, Q., & Wang, Q. (2020). Fintech Penetration, Financial Literacy, and Financial Decision‐Making: Empirical Analysis Based on Tar. Complexity, 2020(1), 6696312.
40. Lusardi, A. (2008). Planning and financial literacy: How do women fare.
41. Lusardi, A. (2009). The importance of financial literacy. NBER Reporter Online, (2), 13-16
42. Lusardi, A. (2012). Numeracy, financial literacy, and financial decision-making (No. w17821). National Bureau of Economic Research.
43. Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss journal of economics and statistics, 155(1), 1-8.
44. Lusardi, A., & de Bassa Scheresberg, C. (2013). Financial literacy and high-cost borrowing in the United States, NBER Working Paper n. 18969, April.
45. Lusardi, A., & Mitchell, O. S. (2007). Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of monetary Economics, 54(1), 205-224.
46. Lusardi, A., & Mitchell, O. S. (2007). Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of monetary Economics, 54(1), 205-224.
47. Lusardi, A., & Mitchell, O. S. (2011). Financial literacy and retirement planning in the United States. Journal of pension economics & finance, 10(4), 509-525.
48. Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: an overview. Journal of pension economics & finance, 10(4), 497-508.
49. Martin, B. C., McNally, J. J., & Kay, M. J. (2013). Examining the formation of human capital in entrepreneurship: A metaanalysis of entrepreneurship education outcomes. Journal of business venturing, 28(2), 211-224.
50. Marvel, M. R., Davis, J. L., & Sproul, C. R. (2016). Human capital and entrepreneurship research: A critical review and future directions. Entrepreneurship Theory and Practice, 40(3), 599-626.
51. Matejun, M., & Mikoláš, Z. (2017). Small business life cycle: statics and dynamics (S&D) model. Engineering Management in Production and Services, 9(4), 48-58.
52. Módosné Szalai, Sz. Sz., Kálmán, B. G., Tóth, A., Gyurián, N., Singh, D. P., Dávid, D. L., & Jenei, Sz. (2025). NUTS2 regions of the Visegrad countries during the COVID-19 pandemic and recovery. Regional Statistics, 15(3), 418–438. DOI: 10.15196/RS150302
53. Módosné Szalai, Sz., Kálmán, B. G., Tóth, A., Gyurián, N., Singh, D. P., Dávid, L. D., & Jenei, Sz. (2025). NUTS2 regions of the Visegrad countries during the Covid-19 pandemic and recovery. Regional Statistics, 15(3), 1–21. https://doi.org/10.15196/RS150302
54. Monticone, C. (2020). OECD/INFE survey instrument to measure the financial literacy of MSMEs.
55. Muñoz-Céspedes, E., Ibar-Alonso, R., & Cuerdo-Mir, M. (2024). Individual entrepreneurial behavior and financial literacy. International Entrepreneurship and Management Journal, 20(3), 2263-2285.
56. Mura, L., Barcziová, A., Bálintová, M., Jenei, Sz., Molnár, S., & Módosné Szalai, Sz. (2022). The effects of the COVID-19 pandemic on unemployment in Slovakia and Hungary. Vadyba: Journal of Management, 38(1), 25–35. https://doi.org/10.38104/vadyba.2022.1.03
57. Németh, E., Jenei, Sz., & Módosné Szalai, Sz. Sz. (2025). A lakosság pénzügyi gondosságának, kockázatvállalásának és elégedettségének társadalmi-demográfiai összefüggései, 2022. Területi Statisztika, 65(4), 474–501. https://doi.org/10.15196/TS650403
58. Németh, E., Kálmán, B., & Malatyinszki, S. (2024). Pénzügyi biztonság Magyarországon: a 2023-as OECD-felmérés eredményeinek kettős nézőpontú elemzése= Financial security in Hungary: A dual perspective analysis of the 2023 OECD survey results. STATISZTIKAI SZEMLE, 102(9), 896-915.
59. OECD (2017), “Fostering markets for SME finance: Matching business and investor needs”, in Financing SMEs and Entrepreneurs 2017: An OECD Scoreboard, OECD Publishing, Paris,
60. OECD (2018a), Entrepreneurship at a Glance 2018 Highlights, https://www.oecd.org/sdd/businessstats/EAG-2018-Highlights.pdf OECD (2018b),
61. OECD (2020), OECD/INFE Survey Instrument to Measure the Financial Literacy of MSMEs, OECD Publishing, Paris,
62. OECD (2022), OECD/INFE Toolkit for Measuring Financial Literacy and Financial Inclusion 2022, OECD Publishing, Paris,
63. OECD (2023), “Financial literacy and digitalisation for MSMEs in South East Europe: A tool for empowering owners and managers”, OECD Business and Finance Policy Papers, No. 29, OECD Publishing, Paris,
64. OECD (2023), “OECD/INFE 2023 International Survey of Adult Financial Literacy”, OECD Business and Finance Policy Papers, No. 39, OECD Publishing, Paris,
65. OECD WORKING PAPERS ON FINANCE, INSURANCE AND PRIVATE PENSIONS, 2017) ISSN: 2079-7117 (Online)
66. OECD/INFE Core competencies framework on financial literacy for MSMEs,
67. O’Leary-Kelly, S. W., & Vokurka, R. J. (1998). The empirical assessment of construct validity. Journal of operations management, 16(4), 387-405
68. Pandey, A., & Gupta, R. (2018). Entrepreneur’s performance and financial literacy–A critical review. International Journal of Management Studies, 5(3), 1-14.
69. Pereira, V., & Bamel, U. (2021). Extending the resource and knowledge based view: A critical analysis into its theoretical evolution and future research directions. Journal of Business Research, 132, 557-570.
70. Plakalović, N. (2015). Financial literacy of SMEs managers. Managing Intellectual Capital and Innovation for Sustainable and Inclusive Society, Bari, Italy. Journal of Small Business and Enterprise Development, 25(6), 985-1003
71. Poór, J., Módosné Szalai, Sz., Mura, L., Jenei, Sz., Varga, E., Szira, Z., & Hollósy-Vadász, G. (2023). The impact of the pandemic on the central and regional areas of Hungary: During the economic recovery following the global virus epidemic. AD ALTA: Journal of Interdisciplinary Research, 13(2), 207–212. https://doi.org/10.33543/1302
72. Ratnawat, R. K. (2018). Competency based human resource management: Concepts, tools, techniques, and models: A review. Competency, 3(5), 119-124.
73. Remsei, S., Módosné Szalai, Sz. Sz., & Jenei, Sz. (2024). Hungarian battery production – Analysis from the perspective of environmental protection and the labour market. Hrvatski Geografski Glasnik / Croatian Geographical Bulletin, 86(2), 5–17. https://doi.org/10.21861/HGG.2024.86.02.01
74. Rostamkalaei, A., Nitani, M., & Riding, A. (2022). Self-employment, financial knowledge, and retirement planning. Journal of Small Business Management, 60(1), 63-92.
75. Struckell, E. M., Patel, P. C., Ojha, D., & Oghazi, P. (2022). Financial literacy and self employment–The moderating effect of gender and race. Journal of Business Research, 139, 639-653.
76. Trombetta, M. (2023). Accounting and finance literacy and entrepreneurship: An exploratory study. Journal of Accounting and Public Policy, 42(2), 107078 Monticone, C. (2020). OECD/INFE survey instrument to measure the financial literacy of MSMEs.
77. Welch, B. L. (1947). The generalization of ‘STUDENT’S’ problem when several different population varlances are involved. Biometrika, 34(1-2), 28-35.
78. Wilson, R. M., Abraham, A., & Mason, C. L. (2014). The nature of financial literacy. In The Routledge companion to accounting education (pp. 50-80). Routledge.