Assessing the financial literacy strategy of small businesses utilizing information technology within Umhlathuze Municipality

Abstract

This study examines the financial literacy strategies employed by small businesses operating within the Umhlathuze Municipality in South Africa with a particular focus on their utilization of Information Technology (IT). Small firms are of great importance in promoting economic development within a dynamic business environment. Their capacity to efficiently handle financial resources is crucial for their long-term viability and achievement. Quantitative data was collected from a sample of 385 small business participants, representing a diverse range of industries and sectors within Umhlathuze Municipality. Also, qualitative data was collected from 13 IT and Finance specialists. The objective of this research endeavour was to evaluate the degree to which financial literacy programmes for small businesses integrate information technology. The findings of this study reveal key insights into the financial literacy practices of small businesses within Umhlathuze Municipality. As indicated by the research findings, the function of information technology in promoting financial literacy is growing in significance. Hence, numerous organisations have embraced diverse IT tools, including accounting software, online banking, and financial management applications, to augment their financial literacy efforts. Furthermore, the study's findings highlight how the use of IT improved these institutions' financial management practises, resulting in greater decision-making capacities and a more solid financial position. Notwithstanding these circumstances, there were nevertheless discernible obstacles pertaining to the adoption of information technology and financial literacy, including restricted availability of technology in some regions, deficiencies in expertise among employers and workers, and apprehensions about the security of data. These challenges underscore the need for tailored support and training programs to empower small businesses in leveraging IT for financial literacy effectively. This research sheds light on the evolving landscape of financial literacy strategies among small businesses in Umhlathuze Municipality, emphasizing the role of Information Technology. This study provides valuable insights to policymakers, business support organizations, and stakeholders interested in enhancing small business financial literacy and resilience. Ultimately, fostering greater IT integration and promoting financial literacy can contribute to the long-term success and sustainability of small businesses, ultimately driving economic growth in Umhlathuze Municipality.