Financial literacy, access to finance, SMEs performance and Islamic religiosity: evidence from Saudi Arabia

This paper seeks to explore the impact of access to finance and financial literacy on the SMEs performance in an Islamic context. The study adopted a cross-sectional research design by employing 255 SMEs in Saudi Arabia. The findings showed a positive mediating effect of access to finance on the relationship between financial awareness, financial attitude and SMEs performance while access to finance does not mediate the nexus between financial knowledge and SMEs performance. Subsequently, the findings revealed that access to finance have positive effect on SMEs performance. This study also found that access to finance increases the positive relationship between financial literacy and SMEs performance. The role of religiosity was found to positively increase access to finance towards affecting SMEs performance. The findings of this study provide SMEs with the knowledge to increase their religious practices to access government Islamic funds, i.e., Mudarabah and Musharakah while Islamic banking firms should increase their Islamic products and services to attract SMEs in Saudi Arabia.