Original Research

Personal financial literacy and personal debt management: The potential relationship with new venture creation

Liezel Kotzé, Prof A.v.A Smit
The Southern African Journal of Entrepreneurship and Small Business Management | Vol 1, No 1 | a11 | DOI: https://doi.org/10.4102/sajesbm.v1i1.11 | © 2015 The Southern African Journal of Entrepreneurship and Small Business Management
Submitted: 15 July 2015 | Published: 31 December 2008

About the author(s)

Liezel Kotzé, University of the Free State
Prof A.v.A Smit,

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Prior research shows that personal savings are one of the most important financial sources for start-ups of entrepreneurial firms. The lack of personal savings and seeming shortage of financial knowledge could contribute to the low incidence of new venture creation, and the high failure rate amongst South African entrepreneurs. This paper investigates the perceptions of 286 Business Management students with a minimum of three years’ working and management experience, regarding both their financial literacy and their need and desire for financial education. The outcomes of the study show the necessity for financial education and financial literacy in South Africa. The respondents showed a lack of confidence in their money management skills and expressed a desire for more financial knowledge. It is possible that an increased level of financial literacy could lead to more entrepreneurial activity and a decrease in new venture failures.


Key words and phrases: personal financial literacy, personal debt, personal savings, personal financial management, new venture creation


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Crossref Citations

1. Access to Finance and Performance of Small Firms in South Africa: the Moderating Effect of Financial Literacy
Olawale Fatoki
WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS  vol: 18  first page: 78  year: 2021  
doi: 10.37394/23207.2021.18.9