Financial Literacy and Operational Performance of Small and Medium Enterprises in Rwanda: A Case of Manufacturing SMEs in Gasabo District

Rwanda. For this study, descriptive and correlation analyses were used. A descriptive research design employed a wide range of research methods. A descriptive study was also used to describe participant demographic information. A correlational analysis was also performed. This study used a sample of 275 participants, which was chosen using Slovin’s formula. Data analysed using descriptive and inferential statistics. Bookkeeping, financial planning, and debt management explain 63.9% of the variation in operational performance, as indicated by the R-squared value. Bookkeeping has a regression coefficient of 0.196 and a significance level of 0.000 (< 0.05). Financial planning has a regression coefficient of 0.358 and a significance level of 0.000 (< 0.05). Debt management has the highest regression coefficient of 0.379 with a significance level of 0.000 (< 0.05). Since all predictors have significance levels below 0.05, they are all statistically significant in explaining operational performance. Manufacturing SMEs should enhance their bookkeeping practices by adopting digital accounting systems to improve financial tracking and reporting. Government agencies and business development organisations should incorporate financial literacy training into entrepreneurship programmes to equip SMEs with essential financial management skills.