Róbert Tóth

The financial literacy and culture of small and medium-sized enterprises (SMEs) significantly influence their financial stability, decision-making processes, and long-term sustainability. This study analyzes the relationship between financial literacy, company size, and their impact on access to financing and loan repayment performance among Hungarian SMEs from 2019 to 2023, an emerging market economy characterized by continuous economic challenges. Using a partial linear regression model and mediation analysis on a representative dataset of approximately 2,500 SMEs evenly distributed across size categories over five years, the study finds that financial management has a statistically significant effect on access to funding (β = 0.217, p < 0.001 in 2023). Financial planning also plays a crucial role in financial decisions, with a positive correlation strengthening over time (β = 0.181, p < 0.001). The mediating role of company size is confirmed across all models, with Sobel test results indicating a significant indirect effect (z = 5.093, p < 0.001 for financial management impact on funding access). By 2023, medium and larger SMEs demonstrated improved financial decision-making and increased financing opportunities, whereas smaller enterprises continued to struggle, emphasizing the need to enhance their financial strategies. The findings highlight the importance of financial literacy development to ensure SME sustainability, improve access to external financial resources, and support broader economic growth.

Acknowledgment
“Project no. TKP2021-NKTA-51 has been implemented with the support provided by the Ministry of Culture and Innovation of Hungary from the National Research, Development and Innovation Fund, financed under the TKP2021-NKTA funding scheme.” Made in Széll Kálmán Public Finance Lab of Ludovika University of Public Service, Budapest.