Abstract:
1. Introduction
This study examines the impact of financial literacy on adopting fintech by
small and medium enterprises in Sri Lanka. Financial literacy, essential for
informed financial decision-making, is critical for SME growth, while
fintech adoption transforms traditional business operations through
technology-based financial services. However, financial Literacy and
fintech adoption ratios are challenging for SMEs globally. This study
addresses this gap by examining how financial literacy affects fintech
adoption among SMEs in this region.
2. Research Methodology
This study used a positivist research philosophy and a quantitative
approach. Data was collected using a survey from 63 SMEs in the Western
Province through the convenience sampling technique, and a simple linear
regression model was used to test the hypotheses. Validity and reliability
were assured, and SPSS software was used.
3. Findings and Discussion
The findings indicate that among SMEs in Western provinces, financial
literacy substantially impacts the adoption of fintech. The importance of
financial literacy on fintech adoption is further supported by the KMO
value of 0.845 and Cronbach's Alpha of 0.878, which show appropriate
sampling adequacy and strong dependability. Based on these results, the
findings proved that enhancing financial literacy among SMEs can boost
fintech usage among them.
4. Conclusion and Implications
The findings highlight the critical role of enhancing financial literacy in
overcoming barriers to technological innovation in SMEs.These insights
guide policymakers in formulating targeted strategies to promote digital
financial services and empower businessmen to make informed financial
decisions
