Use of Technology and SME Managers' Financial Literacy in Developing Economies

Abstract

Our study aims at analyzing the perceived impact of technology utilization by Micro, small and medium enterprises (SMEs) on managers' financial literacy in developing economy setting. Employing a survey sample of 311 SMEs from Tanzania we use the partial least square structural equation modelling (PLS-SEM) to model the use of technology and financial literacy variables relationship. The financial literacy variables are categorized into financial knowledge, attitude and behavior. The results present significant positive relationship on use of technology and firm managers' financial knowledge and attitude. But we found insignificant results of use of technology on firm managers' financial behavior. The analysis further offer insight on how financial knowledge and attitude are significant in changing financial behavior of the business manager. The result offer a foretaste of how the array of technology application and improved financial literacy could enhance financial management decisions in business operations.