Financial Education Competence and Profitable Value Creation among Small and Medium Enterprises (SMEs) in Lagos State, Nigeria

Abstract

Small and Medium Enterprises (SMEs) in Nigeria continue to experience high failure rates, largely attributed to weak financial management capabilities despite their critical role in employment generation, innovation, and economic growth. This study examines the effect of financial education competence operationalized through financial knowledge, skills acquisition, and financial attitude on profitable value creation among SMEs in Lagos State. A quantitative research design was adopted, with data collected from 387 SME owner-managers using structured questionnaires. The data were analyzed using descriptive statistics and multiple regression analysis. The findings reveal that financial education competence significantly influences profitable value creation (R² = 0.388, p < 0.001). Specifically, financial knowledge has a positive and significant effect (β = 0.201, p = 0.035), skills acquisition shows a stronger positive influence (β = 0.643, p < 0.001), while financial attitude exerts the strongest effect (β = 0.389, p < 0.001). This indicates that although financial knowledge and skills are important, behavioral orientation plays a more dominant role in translating financial competence into sustained profitability. The study contributes to theory by integrating Human Capital Theory and the Resource-Based View, positioning financial attitude as a critical behavioral intangible resource that enhances value creation. Practically, the findings suggest that SME support programmes should prioritize behavioral financial training alongside technical skill development. The study concludes that a multidimensional approach to financial education competence is essential for achieving sustainable SME profitability.