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A Systematic Literature Review on Financial Stress of Small and Medium Entrepreneurs

Jayasekara, B. E. A., Fernando, P. N. D. and Ranjani, R. P. C.


Financial stress, which has become a contemporary issue in the globe, directly and indirectly affects individual’s behavior and disorders their physical and mental health. The main purpose of this study is to evaluate critically, the literature on financial stress of small and medium entrepreneurs and to build a financial stress-mitigating framework. The objectives of this study are to find the different aspects, measures and the level of financial stress of small and medium entrepreneurs to determine the consequences and methods of improving the financial stress to help policy makers to actively fill this missing gap and ultimately achieve economic development. The methodology used in this study was to review literature systematically using a sample of 151 most relevant studies published from 1936-2017 and critically appraise and synthesized findings qualitatively. The study revealed financial stress is less with those who are employed; elderly, having a lower debt load as a percentage of income, and possess better health and family relationships. Further, the financial stress is a cause of depression, anxiety, poor academic performance, unscheduled absence from work and negatively affects individual health, self-esteem, marriage satisfaction, parenting role and family functions. Hence, the study recommends overcoming financial stress as necessary to develop problem solving and financial management skills, develop effective handling of economic hardships, introduce more flexible repayment plans for loans; improve positive financial behaviors and budgets.

KEYWORDS: Financial stress, Small and medium entrepreneurs, Subjective and objective, financial stress

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