THE Entrepreneurial competence and financial literacy in certified and uncertified Zanzibar SMEs

Abstract

This study assessed Certified and Uncertified Small and Medium Enterprises in Zanzibar with respect to Entrepreneurial Competence and Financial Literacy. The study was guided by Resource-Based theory and Institutional theory. The study employed quantitative methods. The sample size of this study was 90 participants, and purposive (judgmental) sampling was used to select the sample. Questionnaires were used as the primary data collection tool. After data collection, the Chi-square Test was applied as an estimation technique. The findings revealed a powerful, interconnected dynamic among Zanzibar's SMEs, in which certification by the Zanzibar Bureau of Standards serves as a key marker of success. The study found that certified SMEs, often driven by a quest for credibility and competitive advantage, demonstrably possess higher entrepreneurial competencies and are significantly more likely to experience growth (76.1% vs. 29.0% of uncertified SMEs). A critical foundation for this success is financial literacy, which is strongly linked to high competencies (82.2%) of firms with good financial literacy. The study recommends that the Zanzibar Bureau of Standards integrate financial literacy into SME support programs and launch awareness campaigns that emphasize tangible benefits, such as improved credibility and competitive advantage.