Financial Literacy as a Tool for Business Sustainability Among SMEs in FCT-Abuja

The persistent fragility and high failure rate of small and medium enterprises (SMEs) in the Federal Capital Territory (FCT), Abuja, despite their recognised contribution to employment generation and economic growth, informed this study. The main objective of the study was to examine financial literacy as a tool for business sustainability among SMEs in FCT-Abuja, with particular emphasis on the effects of financial knowledge on financial stability and financial attitude on operational continuity. A cross-sectional survey research design was adopted. The population of the study comprised all registered SMEs in Abuja, estimated at 24,400 enterprises as documented by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN, 2023). Using Yamane’s formula with an added 20 per cent margin of safety, a sample size of 473 SMEs was determined, while cluster sampling technique was employed to ensure adequate sectoral representation. Primary data were collected through a structured questionnaire, with reliability confirmed using Cronbach’s alpha and validity established through content validity. Data were analysed using regression analysis with the aid of SPSS version 27. The findings revealed that financial knowledge had a significant positive effect on the financial stability of SMEs, while financial attitude significantly influenced their operational continuity. The study concluded that financial literacy constituted a critical human capital resource that enhanced the sustainability of SMEs in FCT-Abuja. It was therefore recommended that SME owners and managers should strengthen their financial competencies through targeted financial education programmes, while policy-makers and support agencies should integrate behavioural financial training into entrepreneurship development initiatives.