Abstract
Financial literacy is an important component of the ever-changing environment of start-up businesses. Despite advances in financial literacy research, it predominantly addresses personal finance issues pertinent to the general population, creating a gap in understanding the financial literacy requirements of incubatees. This study aims to assess the level of financial literacy amongst incubatees in order to identify knowledge gaps where development and adjustments are needed. The study focussed on National University of Lesotho innovation hub incubatees in Roma, Lesotho. A qualitative research methodology was utilised, involving data collection through in-depth, semi-structured interviews with all 10 incubatees at the university incubation hub. The data collected were then transcribed and the content analysis revealed four key themes associated with inadequate financial literacy skills. Generally, incubatees’ financial skills are insufficient in financial decisions, financial budgeting and planning, resulting in lack of confidence in applying such financial domains. The study suggests that universities examine more deeply how incubatees’ inadequate financial literacy affects start-ups’ finance issues and financial decision-making, to customise financial programmes that align with incubatees’ financial literacy needs.
Contribution: The study offers practical recommendations for integrating financial literacy into university curricula. An integrated approach equips start-ups and aspiring entrepreneurs with essential financial knowledge and skills, ensuring their success in business incubation and beyond. Financial literacy training should focus more on practical application to enhance the financial confidence of incubatees.
Keywords: financial literacy; universities; innovation hubs; start-ups; incubatees.
Introduction
Financial literacy refers to the comprehensive understanding of finance, including the necessary financial knowledge, behaviours and attitudes required for a responsible and stable financial life (Bank of Korea 2022). Financial literacy is gradually becoming a priority for governments in both developing and developed countries because it contributes to financial stability, financial inclusion, and the actual functioning of financial markets (Lusardi & Messy 2023). It is a vital component of entrepreneurship and essential for the long-term growth and success of start-up businesses. It governs the degree to which a person comprehends key financial terms and has the ability to manage finances, conveyed in making the right short-term financial decisions and correct long-term financial planning (OECD 2020).
Elbanna, Eissa and Armstrong (2025) contend that financial literacy is essential for start-ups as it measures one’s capacity for making financial decisions. Aligned with the findings of Pratikto (2021), Priscilla, Tumuramye and Niwaha (2016) also emphasise that financial literacy is essential for both start-up tenants and corporate operations. They further highlight the importance of understanding financial budgeting, cash flow management, risk management and financial decision-making by incubatees. Klapper and Lusardi (2019) conclude that financial literacy involves the ability to make informed and effective decisions about the use and management of finances.
Recently, countries have capitalised in the creation of innovation hubs for the sole purpose of promoting entrepreneurial culture established on innovation and research, and directly encouraging and supporting innovative entrepreneurs and start-ups (Dzenga 2019). According to Cherunya and Ahlborg (2020), hubs bring together diverse shareholders, lower obstacles to solutions from co-creators, and encourage teamwork through shared physical space. However, Mwantimwa et al. (2021) argue that hubs serve as a connection point for the local start-ups community, stakeholders, academia and the private sector. Innovation hubs play a key role in entrepreneurship development by supporting start-ups and facilitating knowledge transfer among incubatees (Mwantimwa et al. 2021). Tan, Qian and Chen (2023) observed that one of the advantages of the innovation hubs is that communication patterns in hubs are usually informal allowing easy knowledge exchange and sharing. Therefore, it may be inferred that innovation hubs play an important role in driving economic growth, developing innovation and facilitating exchanges within and across industries. They serve as catalysts for development and offer numerous benefits, such as enhanced connectivity, accessibility and inspired innovation entrepreneurship resulting in increased trade investment (Sahil 2024).
Innovation hubs also offer support services in emerging business and marketing plans, building management teams, and finding capital and access to a variety of other more specialised professional services (Daniel et al. 2023). At the same time, innovation hubs act as dynamic centres that connect local start-ups, communities, investors, academia, technology firms, and the wider private sector, fostering collaboration and growth (Natalie 2017). Its goal is to foster a framework where start-ups can connect with others they might not ordinarily encounter.
The context
The National University of Lesotho (NUL) innovation hub was recognised as a hub for innovation, offering a favourable atmosphere that promotes innovation, entrepreneurship and technical progress since 2017 (Mamosa 2023). The hub provides numerous resources and support initiatives, such as access to funding, co-working spaces, prototyping facilities, mentorship programmes and networking opportunities. It collaborates with business associates, governmental bodies and global associations to improve innovation ecosystems and promote economic growth in Lesotho (Mamosa 2023).
Despite the significant progress the NUL innovation hub has achieved in promoting and supporting start-ups, there are some knowledge gaps associated with financial literacy among the start-ups in innovation hubs (Munawar 2023). Financial literacy is the ability to comprehend, manage, and make wise decisions regarding financial resources (OECD 2020).
It is essential to many corporate processes, including access to financing, financial budgeting, cash flow management, risk management and financial decision-making. Therefore, financial literacy may be considered as critical to the long-term development and prosperity of small and start-up companies. Sharma (2021) contends that start-ups who lack a thorough grasp of financial principles and procedures may face major obstacles to the expansion and sustainability of their businesses. Empirical evidence suggests that insufficient financial literacy is linked to increased incidence of business collapse, suboptimal financial administration and challenges in obtaining funding (Cole 2020).
The distinct circumstances of Lesotho pose obstacles for businesses, emanating from restricted availability of official financial services, insufficient infrastructure and regulatory impediments (World Bank 2017). Under such circumstances, the significance of financial literacy increases as start-up tenants must navigate complex financial environments with little assistance and resources. Cole (2020) argues that a lack of knowledge of finances may hinder the expansion and sustainability of start-ups, resulting in possible financial mismanagement, difficulty obtaining funding or incapacity to deal with financial difficulties successfully.
According to Li and Qian (2020), financial literacy is very critical as it equips start-ups with entrepreneurial financial skills, market knowledge, finance sources and financial knowledge. Evaluating financial literacy can help identify specific gaps among incubatees, revealing opportunities for growth and refinement to strengthen the success of their start-up ventures. It is therefore, against this backdrop, that this study aims to evaluate the level of financial literacy of NUL innovation hub incubatees to assess areas for development and adjustment to improve their overall success of start-up business.
Literature review
The value of financial literacy
Financial literacy is the ability to understand and apply financial principles to make informed decisions, effectively manage resources and identify market opportunities (Li & Qian 2020). Beyond general financial knowledge, it plays a critical role in entrepreneurship, particularly for incubatees facing funding complexities when establishing new ventures. A strong financial foundation enables them to identify viable funding sources, assess risks, and make strategic financial decisions.
Research highlights the benefits of financial literacy for entrepreneurial success. Alshebami and Marri (2022) argue that financially literate incubatees develop essential risk management skills, gain deeper market insights, and allocate their finances more efficiently. This competency empowers them to navigate investment decisions wisely, ensuring sustainable business growth (Gilenko & Chernova 2021). Furthermore, Lotter (2024) suggests that financial literacy fosters autonomy and motivation, empowering entrepreneurs to navigate financial challenges, which in turn significantly enhances their entrepreneurial intentions.
Thus, acquiring financial literacy skills is crucial for incubatees, enabling them to create realistic budgets and allocate resources effectively (Flip & Tshikani 2021). Strengthening these competencies equips aspiring entrepreneurs with the financial awareness necessary to sustain and grow their ventures.
An innovation hub
A new Incubator model named an innovation hub was established around the 2000s. It is defined as a separate physical entity possessing three specific competencies, namely, idea generation, incubation and idea acceleration (Al-Mubaraki & Busler 2017). On the other hand, Coscarello (2024) describes an innovation hub as a centre of research and development of new ideas that acts as a catalyst to change ideas into feasible solutions. Innovation hubs share the same overall traits as incubators. They provide services that help start-ups to get through initial hurdles in starting a business (Coscarello 2024). They usually perform some activities, such as assisting incubatee tenants with business basics, networking activities, marketing assistance and financial literacy.
According to Van der Spuy (2019), innovation hubs are expected to deliver full services; physical workspace, administrative support, training and skills development, access to professional skills and finance and access to networks. Apart from business basics support, the value-added services to incubatees are in the areas of mentoring, funding, marketing, team building and other business support services, like legal, accounting and regulatory issues (Hassan 2024). Innovation hubs are also regarded as physical environments that support start-up tenants and individuals at different stages of development. They are usually community-driven pre-incubators, incubators, accelerators, hacker spaces and co-working spaces that encourage collaboration and networking (Mitev et al. 2019). Tripathi and Oivo (2020) argue that innovation hubs are a vital tool for promoting awareness of start-ups within higher education communities, as well as to encourage novel and high-value companies’ creation by developing regional competitiveness. Generally, incubatees are entrepreneurs who have registered in innovation hubs for guidance, mentorship and assistance with their small businesses.
The role of university hubs is to support academic, research and educational goals by providing resources, such as study spaces, libraries, career service and collaboration areas for students and researchers. Their aim is to develop the innovation capacity of start-up tenants so that they can grow and become large companies (Migliore et al. 2024). Innovation hubs play a crucial role in fostering entrepreneurship and economic growth by providing essential support services.
This study aligns with United Nations Sustainable Development Group (UNSDG) goals, including Decent Work and Economic Growth, as well as Industry, Innovation, and Infrastructure, while contributing to Africa Agenda 2063 by fostering sustainable entrepreneurship and regional competitiveness. Strengthening financial literacy within innovation hubs can enhance business success, drive economic growth, and bolster Africa’s global competitiveness, ultimately accelerating the continent’s economic transformation (Ansong, Okumu & Koomson 2023; United Nations Economic Commission for Africa 2018).
Research design
The case context
The NUL innovation hub incubates a number of businesses started mainly by students and lecturers. The goal is to help these ventures grow from small enterprises into professionally managed businesses capable of large-scale production. The NUL innovation hub offers office space, meeting rooms, and events for start-up tenants, entrepreneurs, and business incubatees, in a setting designed to foster creativity and support the development and implementation of innovative solutions. The hub attained a significant development by securing M1.9 million funding from the Lesotho Competitiveness and Financial Inclusion (CAFI) Project. Competitiveness and Financial Inclusion’s main objective is to improve access to business support services and financial products for small and medium enterprises, start-ups and entrepreneurs with an emphasis on females and youth (Mamosa 2023). This resulted in NUL innovation hub being able to open its doors for the first cohort of incubatees in 2023.
Research methods
A cross-sectional descriptive design using a qualitative case study approach was employed to assess the financial literacy levels of incubatees at the NUL innovation hub. The case study approach was highly relevant to this research as it enabled a thorough qualitative assessment of the financial literacy levels of the incubatees within a real-world setting (El Madnaoui et al. 2020). The study incorporated both secondary and primary data sources, ensuring a comprehensive analysis. Secondary data were gathered through a critical review of relevant documents, while primary data were obtained through a survey of incubatees.
Population and data collection
The study focuses on incubatees incubated in the NUL innovation hub since July 2023. The total number of incubatees was 10. All the 10 incubatees were interviewed at the board room of the university innovation hub using in-depth and semi-structured interview questions. Open-ended questions and one-on-one semi-structured interviews were used to allow greater flexibility in exploring incubatees’ understanding of financial literacy (Magaldi & Berler 2020).
The validity of the collected data was tested against the literature review data. Each interview lasted between 20 min and 30 min. In the beginning of the interviews, incubatees were urged to express their views honestly and without any reservation, enabling researchers to collect accurate and valid data. The interviews were audio-recorded with the incubatees’ permission and later transcribed for analysis. The transcription was confirmed with the incubatees before analysis in order to verify that the transcribed data correctly represents what was actually said by incubatees.
Interview questions summary
The interviews assessed incubatees’ financial literacy within the innovation hub, considering both personal and business backgrounds. Initial responses guided follow-up discussions on key topics like decision-making, financial planning, borrowing and saving. The study also examined their involvement in financial education programmes, identified knowledge gaps, and gathered recommendations to improve financial literacy for better business management.
Data processing and thematic analysis
The study analysed incubatees’ views on financial literacy using a qualitative approach. Open-ended interview responses were first transcribed, organised and formatted to ensure clarity before analysis. A content analysis method was then applied to systematically structure the data. To gain a clear understanding of participants’ experiences, transcripts were carefully examined. A thematic analysis was used to retain the richness of their explanations rather than focusing solely on extracting deeper meanings (Squires 2023). The process involved manually sorting and coding key insights, grouping them into meaningful categories. This helped identify important themes, offering a clearer picture of the different perspectives and knowledge of financial literacy among incubatees.
Ethical considerations
Ethical clearance for this study was granted by the National University of Lesotho Review Board (approval no: NUL/STA/2024/03). As part of the approval process, the interview questions were reviewed and authorized. Before each interview, participants were informed of the ethical principles guiding the study and provided consent for recording and the academic publication of results. Participation was entirely voluntary, with no consequences for those who chose not to participate. Additionally, incubatees were assured that their responses would remain confidential and anonymous.
Results
Incubatees demographic profile
The demographic profile of incubatees and their start-up businesses is presented in Table 1. The data collected were on incubatees’ position in the company, age, gender and qualifications, while the start-up demographics were on ownership, industry and time of business in the incubation.
| TABLE 1: Self-reported demographic characteristics of incubatees (N = 10) and their businesses information. |
A total of 10 incubatees (Table 1), hosted by NUL innovation hub, took part in the current research study. These participants were equally divided between genders, with five males and five females aged between 24 and 44 years. All of them were alumni of NUL, holding bachelor’s degrees in different fields. Their businesses were diverse: five in agriculture, three in manufacturing, one in testing, inspection, and certification, and one in mental health. Nine of the businesses were privately owned companies, while one registered as a sole trader. One incubatee had been incubated for 10 months, the longest period among them, while the others were hosted for 6 months. Although all start-ups were in the early stages of development and faced uncertainty in resources, processes, and product development (Bourguignon & Platteau 2023), they were all fully sponsored by CAFI.
Qualitative results
Following the abstraction and coding process, the analysis revealed varied understandings of financial literacy among incubatees, leading to distinct classifications of their knowledge. These classifications were organised into four key themes: financial decision-making, financial budgeting and planning, savings and financial literacy training. These themes provide a structured framework for understanding incubatees’ financial literacy competencies. The following section presents a detailed discussion of each theme, supported by verbatim statements to enhance clarity and authenticity.
Financial decision making
Financial decision-making is crucial in everyday life and even more critical for business start-ups. Successful decisions can lead to profits, while poor choices can result in losses. This highlights the critical importance of the decision-making process, particularly for start-up tenants. The concerns related to this theme were cited by six incubatees interviewed.
A respondent stated:
‘Due to financial literacy training I received here, I am able to make better financial choices, this means that I am able to make decision related to what to buy and what not to buy and why should I buy, because I have specific goals that I am working towards. But I am not yet confident to use financial statements for decision making. My knowledge is little in reading financial statements and make the decision out of them.’ (Respondent 4, who holds a BSc Physics & Mathematics, was interviewed on May 30 2024)
Another respondent commented:
‘Three of us [co-owners] make financial decisions and take them to our advisors for confirmation, financial decisions regarding what to buy for the business. In fact, we were not really confident with the financial decision we should take. Really without the assistance of our lecturers in making decisions regarding the use of money, there will be just chaos on our side.’ (Respondent 5, who holds a BSc Nutrition, was interviewed on May 31 2024)
This theme suggests that while incubatees confirm that they make financial decisions, they seem to lack confidence in doing so. Suyanto et al. (2021) emphasise that effective financial decisions-making requires both knowledge and confidence to apply. They further argue that incubatees should not only have the requisite knowledge but also the aptitude and confidence to put that knowledge to use. The level of financial literacy is generally inadequate in Lesotho (FinMark Trust 2014) and it is not surprising that the incubatees also seem to lack confidence in making decisions on their own. If incubatees do not understand the available financial instruments, this may result in poor decisions and lead to costly financial mistakes (Sudeshna 2021). However, adequate financial literacy can enhance incubatees’ skills and abilities to make more informed choice, plan and manage their finances (Kumari, Ferdous & Klalidah 2020).
Financial planning and budgeting
This theme holds significance because knowledge of financial planning and budgeting may aid start-up tenants in making better-informed decisions and enabling more strategic resource allocation (Jagtap 2023; Wulff 2024). Usually, start-ups have limited resources and financial planning helps to ensure that the scarce resources are used effectively. The theme is about incubatees’ ability to develop a budget that is in line with their business objectives. Some respondents commented that they plan and draw the budget on different occasions; some draw the budget on monthly basis while others on yearly basis.
A respondent had this to say:
‘We plan, by prioritising our activities, [for example] What to buy first and why? Basically, we have budget for one year, however some of the things we budgeted do change. We usually top-up from our sales if the price budgeted has changed.’ (Respondent 2 who holds BA Philosophy, was interviewed on May 31, 2024)
‘I do budget by comparing different prices, quality and durability of goods when it comes to expenditure. I do a revenue budget, even though it has been difficult for me to sell over my last six months here.’ (Respondent 5, who holds a BSc Nutrition, was interviewed on May 31, 2024)
‘I find it difficult to set my business financial goals, both short and long. I am not very sure what to include in setting those goals. I am not able to effectively estimates my cost including unexpected costs. This makes it difficult for me to budget and make monthly statements.’ (Respondent 8 who holds a BSc Chemical Technology, was interviewed on May 30, 2024)
This theme proposes that respondents should set financial goals by outlining and prioritising their activities in order to reach their goals. Vincent and Zakkariya (2021) contend that budget is also very critical for start-up tenants because it provides future-oriented information, which facilitates monitoring and control of start-ups’ performance during the incubation process. They usually do so by identifying actual from the budgeted performance in order to take appropriate corrective measures (Etale & Idumesaro 2019). Conversely, Maduekwe and Kamala (2016) observed that although start-up business usually plans and budget, they mostly do the sales budgets, purchases budgets and cash budgets. Overall, financial planning and budgeting are an essential component of any start-up’s success (Wulff 2024).
Savings
Incubatees’ saving behaviour may serve as the foundation for business investments, which may positively contribute to the growth of a country’s economy. Being knowledgeable about savings may empower incubatees to make informed financial decisions, plan for the future and achieve financial goals (Lusardi & Messy 2023). All the respondents indicated that they do not save and they are not aware of the savings options offered by the local banks. This view is supported by incubatees 6, 1, 9, 3 and 7 who claimed thus:
‘I have not put money aside for savings purposes. I only re-invest profits by buying more stock. I have no investments at all. But I am not aware of savings facilities provided by the banks. I use Mpesa to safe my business money. I do not know what to do to open an account for saving purposes.’ (Respondent 6, who holds Bachelor of Arts in Business & Entrepreneurship was interviewed on June 1, 2024)
‘We don’t have savings and investments currently. I have no knowledge of savings and investment options and I find it difficult to track my savings.’ (Respondent 1, who holds BSc Chemical Technology, was interviewed on June 1, 2024)
‘I am not able to save anything now. Except that sometimes after selling my products, I put my money into Mpesa because I am able to withdraw it anytime that I want. I am not using bank account now because I do not have any savings and I do not know the requirements for opening bank account.’ (Respondent 9, who holds MSc Chemistry, was interviewed on the June 9, 2024)
Incubatees reported that they do not save for future needs or emergencies, and they do not deposit money in bank accounts—mainly because they do not have any. This contrasts with previous research showing that savings are vital for covering unexpected income shortfalls in start-ups (Ansar, Klapper & Singer 2023). Although the incubatees reported having no savings, saving is widely recognised as a fundamental financial skill and a key component of financial literacy. Peiris (2021) argues that understanding elementary financial principles is essential for effectively applying savings, highlighting the significant positive impact financial literacy has on start-ups’ savings behaviour. However, the possibility that incubatees do not have an understanding of elementary financial principles is very high. This theme highlights the need for more savings-related training to help incubatees strengthen their financial capabilities and deliver greater value to their customers.
Financial literacy training
Competitiveness and Financial Inclusion provided financial literacy education training for incubatees. The programme was implemented to provide basic financial literacy training, enabling incubatees to address financial challenges and support start-ups’ performance, growth, and sustainability. The programme provides foundational training, equipping incubatees with essential skills in planning, budgeting, savings, decision-making, risk management, credit handling, book-keeping and marketing fostering start-up resilience and long-term success. All the 10 incubatees confirmed that they have been exposed to financial literacy trainings during the incubation process, nonetheless, they still lack knowledge of financial literacy in some areas, such as making financial decisions, financial planning, savings and investment.
In amplification of the aforesaid, a respondent had this to say:
‘I was offered training in financial literacy, but I am not so knowledgeable about creating financial statement [balance –sheet, income statement, and cash-flow statement].’ (Respondent 9, who holds MSc Animal Science Production System, was interviewed on the June 9, 2024)
‘So I can say I do not have a deeper knowledge of financial literacy issues. I can’t manage my books the way I am expected to. Generally, I do not have enough knowledge to apply my knowledge of drawing financial statement.’ (Respondent 9, who holds MSc Animal Science Production System, was interviewed on the June 9, 2024)
In support of the view that the financial literacy training was offered, a respondent had this to say:
‘Training was provided for us by CAFI and it covered costing, record keeping, but I regard myself as not having an in-depth knowledge of financial literacy. I still need more to learn to do financial statement and make financial decision.’ (Respondent 5, who holds a BSc Nutrition, was interviewed on May 31, 2024)
‘I did not have background on finances. It was my first time to deal with financial figures, so I find it difficult to understand what was taught by our mentors. The training was done so quick that it was not easy to grasp what was taught.’ (Respondent 9, who holds MSc Animal Science Production System, was interviewed on the June 9, 2024)
Culebro-Martínez, Moreno-García and Hernández-Mejía (2024) found that there is significant improvement in revenue performance of start-up tenants who participated in the financial literacy programme and the training covered budgeting, financial analysis, credit management and savings and investment. Budgeting skills contribute to increased sales and profits and help ensure smooth business operations. Research has also shown that the more incubatees are competent and financially literate, the more likely they will participate in financial markets and make some investments that will impact their start-up businesses positively (Nyakurukwa & Seetharam 2024). Morris, Maillet and Koffi (2022) suggest that enhancing financial literacy should concentrate more on boosting the financial confidence of incubates and their ability to learn, in order to help start-ups, reach their financial objectives.
Discussion
As evidenced in this study, respondents have been trained in financial literacy, specifically in areas related to financial decisions, financial budgeting and planning, savings and borrowing. However, their knowledge in such areas seems to be limited. Incubatees’ confidence level in applying such domains also appears to be deficient. Irrespective of the effort made by the hub to offer a programme that equips start-up tenants with financial literacy and tools necessary to make informed financial decisions, manage finances effectively and contribute to economic growth of the country, the financial literacy of start-up tenants seems to be inadequate.
This study shares similar results with Lusardi and Messy’s (2023) results that incubatees’ financial literacy is generally limited and often inadequate for making the types of financial decisions that are currently required today by start-ups business. This also aligns with OECD (2022) that financial literacy is generally scarce in many of the countries belonging to the G7 and G20 alliances. Generally, as OECD (2022) purports, the level of financial literacy of start-ups around the world is generally inadequate.
The difficulties faced by NUL innovation hub start-ups to handle financial matters are not surprising as incubatees with limited financial literacy face hardship in making an informed decision on their savings (Zakaria, Fida & Janjua 2017).
Financial literacy is essential for start-up tenants, enabling them to make informed financial decisions by enhancing their understanding of provided information and increasing their confidence in using fundamental financial tools (Weskill 2024). It also enables them to think critically and make choices based on facts rather than being easily influenced by how information is presented. As argued by Moreira Costa et al. (2021), financial literacy not only comprises knowledge and appreciation of financial concepts; it also includes confidence to apply such knowledge in order to make the right financial decisions.
Even after completing training, incubatees may still experience difficulties with financial literacy, influenced by factors such as the quality and effectiveness of instruction. To enhance their ability to apply financial principles in business, training should integrate both theoretical knowledge and practical experience (Roth 2024). Ssekiziyivu and Banyenzaki (2021) emphasise that an exclusively theoretical approach can hinder incubatees’ ability to navigate financial decisions effectively.
In general, limited financial literacy and low confidence among the incubatees may make them more vulnerable to financial setbacks and hinder their ability to survive and grow (Mancone et al. 2024). This indicates a comprehensive need for financial literacy that includes the ability to read, appreciate and more importantly apply the fundamental financial statements, in order to make informed decisions and to make effective choices regarding the use and management of money (Lusardi & Messy 2023). Anshika and Singla (2022) also confirm that financial literacy improves financial well-being of not only the start-ups; it spreads throughout the entire macro-economy system.
In a nutshell, financial literacy is essential for assisting start-ups adapt to evolving trends in the financial world, from digital banking to sustainable finance, ensuring they make informed decisions and maximise opportunities (-Hidayat-ur-Rehman 2024).
Limitations
This study is limited by its small sample size, examining only 10 incubatees from the NUL Innovation Hub. As a result, the findings may not be broadly applicable or representative of financial literacy levels among incubatees in other contexts. Additionally, the study captures financial literacy at a single point in time rather than tracking changes over an extended period, limiting its ability to assess long-term trends and developments. The restricted scope also affects the ability to draw conclusions that extend to incubatees in higher education institution hubs, as well as private and public sector hubs in Lesotho and beyond.
Recommendations to university innovation hub management
Financial literacy training should focus more on application and financial confidence of incubatees in order to alleviate prevailing financial difficulties, prevent new financial problems arising, and develop and implement practical strategies to achieve financial goals. This calls for specialised and inclusive financial literacy programmes that equip incubatees with the practical skills and mentorship needed to nurture their start-ups.
Financial literacy training should ensure that the design and delivery of financial literacy adequately addresses the requirements and preferences of incubatees at different stages of development. Different modes of financial literacy delivery channels and other collaborative activities that can make financial literacy learning fun and inclusive should be employed.
It is also necessary to examine more deeply how incubatees’ limited financial literacy affects start-ups’ finance issues and financial decision-making with the aim to customise financial programmes to match the content and format of financial literacy programmes designed for incubatees, accounting for their diverse areas of specialisation.
Recommendation to policymakers
To bridge the financial literacy gap and better equip aspiring entrepreneurs, higher learning institutions should integrate financial literacy into their curriculum, regardless of students’ majors. Entrepreneurship is not exclusive to business students, as individuals from various fields pursue business ventures for personal and economic growth. The study highlights this gap, with only one incubatee having formal entrepreneurship education. A broader financial literacy curriculum would empower students to navigate financial challenges, make informed decisions, and enhance their financial literacy skills, fostering entrepreneurial success.
Conclusion
The main goal of this study was to assess incubatees’ financial literacy to identify if there are needs and gaps in financial literacy. It may be concluded that the financial literacy among the NUL innovation hub incubatees is not adequate. Generally, the limited knowledge of financial literacy may be linked to limited confidence in applying what they learned during their financial literacy training while they are in the incubation process. The respondents lack knowledge mainly in areas of financial decisions, financial planning and budgeting and savings. The limited financial literacy is of dire concern and needs immediate attention.
Acknowledgements
The authors would like to thank the NUL management who provided permission to carry out the study at The National University of Lesotho and incubatees who took part in the study by responding to interview questions.
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
R.M.T., N.T.L. and T.Z.M. contributed to the design and implementation of the research, to the analysis of the results. R.M.T. and M.C.M. contributed to the analysis, writing of the first draft and the final manuscript.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability
The data that support the findings of this study are available on request from the corresponding author, R.M.T. The data are not publicly available because it contains information that may compromise the privacy of research participants.
Disclaimer
The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency, or that of the publisher. The authors are responsible for this article’s results, findings, and content.
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