Financial Literacy and the Sustainability of Small Firms: Fintech as a Mediator

ABSTRACT

Financially literate entrepreneurs make improved decisions; however, limited access to financial resources often hampers their efforts. Fintech bridges this gap through digital lending, automated financial management systems, and mobile banking. The author is motivated to conduct this research to investigate financial literacy (FL) and fintech adoption (FA), aiming to create a pathway for small firms to thrive in a complex digital economy. The aim is to analyze FL's influence on firm sustainability (SF) and the mediating effect of fintech adoption (FA). The data were collected from 304 small entrepreneurs in Haryana through random sampling and examined through SMART PLS‐SEM. The results state that FA significantly mediates the link between FL and SF, with a strong predictive power. The study underscores the need to amalgamate FL with digital resources. Training courses can be developed to guide entrepreneurs in utilizing Fintech efficiently.