Abstract:
The purpose of this study is to evaluate the level of success of micro business in Sri
Lanka through five different dimensions of financial literacy of business owners.
Apart from that, relationship was built-up between financial literacy of business
owners and financial well-being of their business. A Likert scale questionnaire was
administered among 183 micro business owners whom were randomly selected from
the Western Province in Sri Lakethe results show that the variables used to measure
the business success have strong correlation with the financial literacy. However,
Money, Credit and Debt Management did not have significant correlation with
financial strengths. The results also revealed that 53.6% of micro businesses are
financially strong and 63.4% of them have a sufficient required rate of return (ROI).
In addition to that, 52.5% of the businesses have sufficient short term assets against
short term liabilities. Overall mean value of business success is 3.68. Interestingly
94.5% of business owners forecasted that their business will survive for more than the
next five years. Mean values which measure the level of financial literacy are
recorded as money 3.96, Debt 4.01, Credit 3.97, Risk 3.76 and Investment 3.70. These
indicators demonstrate that micro businesses have the potentiality to be success in the
future. However the existing level of financial literary of micro business owners
should be improved to achieve sustainable business development.
