Effects of Financial Education Training on the economic wellbeing of social business

Resumen

Social microenterprises play an important role in the economy, as they are recognized as the key engine of economic growth in developing countries, however, the lack of financing remains one of their main obstacles. The objective of this paper is to analyze the effect of financial education given to microentrepreneurs on economic profitability, as well as other specific characteristics of microentrepreneurs and their businesses. Data from financial logs applied to social microenterprises in the city of Tijuana, Baja California, Mexico are used; in which the sales, costs and operating expenses of the business are recorded daily for four weeks. Through a linear regression analysis and the Wilcoxon Signed Ranks Test method, it is found that financial education training has a positive effect on the net profits of the business; addition to the positive increase in their sales by transitioning to using technology to advertise or sell their products; the use of credit ends up making visible that in many cases it harms the business because it cannot be used properly.