TOWARDS UNDERSTANDING FINANCIAL BEHAVIOR OF SMES: ROLE OF SOCIO-PSYCHOLOGICAL FACTORS OF OWNER-MANAGER
Keywords:
SMEs, Financial Behavior, Socio-psychological Factors, Pakistan.Abstract
Purpose - Understanding SMEs’ use/adoption of financial services is prerequisite for policy makers and managers of financial institutions interested in their growth and development. The study seeks to explore influence of personal characteristics of owner-manager on firms’ financial behavior to use financial services.
Design/Methodology/Approach – Qualitative methodology has been employed to propose alternate model of understanding financial behavior of firms as influenced by socio-psychological factors of owner-managers. Study makes use of Theory of Planned Behavior and its variants to support the proposed model.
Findings - The study suggests that theories of behavior need to be applied to better understand the owner-manager’s intentions to use financial services, which in turn reflect SMEs’ financial behavior.
Research limitations/implications - The proposed model and relationships would help policy makers, managers and research scholars to better understand SMEs financial behavior. There is need for comparative empirical studies examining the propositions made by the study.
Originality/Value – The papers discusses the demand side issues and proposes a general model of socio-psychological factors of owner-manager that affect SMEs’ decisions toward usage of financial services.
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