The Financial literacy of micro-entrepreneurs: evidence from Italy

Paolo Finaldi Russo (), Ludovica Galotto () and Cristiana Rampazzi ()
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Paolo Finaldi Russo: Banca d'Italia
Ludovica Galotto: Banca d'Italia
Cristiana Rampazzi: Banca d'Italia

No 727, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Entrepreneurs, including those who run very small businesses or sole proprietorships, are often assumed to have sound financial skills as they make frequent financial decisions. This paper explores the issue by analysing the level of financial literacy (FL) of Italian micro-entrepreneurs in comparison with other countries and other Italian adults. The results, based on the 2020 Survey on the Financial Literacy of Italian Adults conducted by the Bank of Italy according to the OECD/INFE methodology, are threefold. First, Italian micro-entrepreneurs have quite low levels of FL by international standards. Second, compared with other Italians, business owners have only a slightly higher level of FL; this is mainly attributable to their higher income and more frequent use of financial services. Third, thanks to their slightly more advanced financial skills, micro-entrepreneurs are more likely to make better financial decisions than other adults. These findings suggest that strengthening the financial literacy of micro-entrepreneurs can have a positive impact on their ability to make better financial decisions and ultimately on the resilience and growth of their businesses.

Keywords: financial literacy; financial behaviour; micro-entrepreneurs; SMEs (search for similar items in EconPapers)
JEL-codes: G53 J24 L26 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-ent, nep-eur, nep-fle, nep-lma and nep-sbm
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