UNLOCKING SUSTAINABLE PERFORMANCE: THE INTERPLAY OF FINANCIAL LITERACY, DIGITAL FINANCE ADOPTION, AND STRATEGIC LEADERSHIP

Abstract

Financial literacy is a predominant component augmenting the sustainability of SMEs, specifically in the economy that are in developing phase, like Pakistan. This research evaluated the interaction among financial literacy, digital finance adoption, strategic leadership, and Sustainable performance of SMEs. Using quantitative-method approach, data was collected from 387 owners and managerial employees of the manufacturing SMEs of various industries in Khyber Pakhtunkhwa province of Pakistan. The statistical results demonstrate that financial literacy enhances significantly the sustainable performance of SMEs, with digital finance adoption partially mediates this relationship. Additionally, the strategic leadership moderates the association of financial literacy and sustainable performance, representing that effective leadership strengthens the influence of financial literacy on sustainable performance of enterprises. The findings underline the prerequisite for SME owners and management to acquire and organize financial knowledge and invest in digital finance, while policymakers should encourage leadership development programs to foster sustainable business performance.

Keywords- Financial literacy, Sustainable Performance, Digital Finance Adoption, Strategic Leadership, SMEs