Impact of Financial Management Practices and Financial Literacy on Micro, Small and Medium Enterprises (MSMEs) Growth (Case Study at Restaurants in Dili, Timor-Leste)

  • Aderito Lino Monteiro Master of Business Administration, Graduate School, Dili Institute of Technology, Dili Timor-Leste
  • Teresa Freitas Belo Master of Business Administration, Graduate School, Dili Institute of Technology, Dili Timor-Leste
  • Alvaro Menezes Amaral Master of Business Administration, Graduate School, Dili Institute of Technology, Dili Timor-Leste
Keywords: Financial management practices, financial knowledge, financial attitude, financial behavior

Abstract

The objective of this study is to assess the effects of financial management practices, including accounting information systems, working capital management, capital structure, and capital budgeting, as well as financial literacy, such as financial knowledge, attitude, and behavior on the growth of restaurants in Dili. This study utilized a quantitative approach, with a sample of 70 restaurant managers or owners in Dili. The collecting data methods used questionnaire that distributed to manager or restaurants’ owners in Dili. The data analysis method used multiple regressions with hypothesis test used t and f statistics. The result showed that the financial management practices (accounting information system, working capital management, capital budgeting) and financial literacy (financial knowledge, financial attitude, financial behavior) have positive and significant impact on the restaurants growth in Dili. This suggests that implementing good financial management practices and improving financial literacy can enhance a restaurant's growth. However, capital structure was found to have no impact on restaurant growth in Dili. Further research is recommended to explore other variables that may influence the growth of MSMEs in Timor-Leste and to expand the sample size.

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Published
2023-12-29
How to Cite
Monteiro, A., Belo, T. and Amaral, A. (2023) “Impact of Financial Management Practices and Financial Literacy on Micro, Small and Medium Enterprises (MSMEs) Growth (Case Study at Restaurants in Dili, Timor-Leste)”, Timor Leste Journal of Business and Management, 5, pp. 64-72. doi: 10.51703/bm.v5i0.141.