Article
Examining the Role of Financial Literacy and Digital Finance in Enhancing Entrepreneurial Success: A Study of Start-Ups and MSMES in Bengaluru
The increasing integration of digital financial services has transformed the entrepreneurial ecosystem, particularly for start-ups and Micro, Small, and Medium Enterprises (MSMEs). However, the effective utilisation of these financial innovations largely depends on entrepreneurs' financial literacy. This study examines the role of financial literacy and digital finance in enhancing entrepreneurial success among start-ups and MSMEs in Bengaluru, India's leading innovation hub. The research investigates how financial knowledge influences the adoption of digital financial tools, including digital payments, online banking, fintech lending, and financial management applications, and how these factors contribute to business performance. A quantitative research design was employed using structured questionnaires administered to entrepreneurs operating across diverse sectors. The collected data were analysed using descriptive statistics, reliability analysis, correlation, multiple regression, and Structural Equation Modelling (SEM) to evaluate the direct and indirect relationships among the study variables. The findings are expected to demonstrate that higher levels of financial literacy significantly improve digital finance adoption, leading to enhanced business growth, operational efficiency, financial sustainability, and entrepreneurial success. Furthermore, digital finance is anticipated to mediate the relationship between financial literacy and entrepreneurial performance. The study contributes to the existing literature by providing empirical evidence from Bengaluru and offers practical implications for policymakers, financial institutions, fintech providers, and entrepreneurship development agencies in strengthening financial capability and fostering sustainable entrepreneurial ecosystems.