FINANCIAL LITERACY AS A STRATEGIC TOOL FOR ENHANCING RISK RESILIENCE IN SMEs: A STUDY OF LEBANESE ENTERPRISES

Abstract

This study investigates the influence of financial literacy on risk management practices among small and medium-sized enterprises (SMEs) in Northern Lebanon. Given the region's challenging economic and political landscape, characterized by instability and uncertainty, the ability of SME leaders to effectively manage risks is paramount for their sustainability and growth. Utilizing a quantitative research methodology, data was collected from a sample of 360 SMEs to evaluate the correlation between financial literacy levels and the capacity to identify, assess, and mitigate various financial and operational risks. The findings reveal a significant positive relationship between enhanced financial literacy - augmented by continuous training - and the resilience of SMEs in navigating economic crises. This research underscores the critical need for targeted investments in financial education as a strategic approach to bolster the performance and long-term viability of SMEs in Lebanon. This study confirms the pivotal role of financial literacy in SME risk management and extends existing models by providing empirical evidence from Lebanon’s economically volatile environment. The findings offer actionable insights for policymakers, financial institutions, and SME managers to enhance resilience strategies and mitigate systemic financial risks..