Small and Medium Enterprises play a pivotal role in creating employment in all nations while contributing significantly towards Gross Domestic Production. Despite its success the sector has not achieved the desired level of growth due to significant issues encountered in each country resulting from financial stress experienced due to increased obligations and financial incapability including Sri Lanka. Further there is a lack of evidence provided by empirical and theoretical studies conducted on the research area. The primary objective of the study is to determine the impact of financial capability on financial stress and financial help seeking behavior of Small and Medium Entrepreneurs in Sri Lanka and revealing the acceptable level of financial capability, financial stress and financial help seeking behavior of Small & Medium Entrepreneurs in Sri Lanka.
To achieve the objectives of the study used sample of 250 respondents from Western Province using the stratified proportional random sampling method and distributed questionnaire to collect primary data which was analyzed using Confirmatory Factor Analysis and Structural Equation Modeling. The study revealed, Small and Medium Entrepreneurs in Sri Lanka demonstrated an increased level of financial capability and financial help seeking behavior while displaying a reduced level of financial stress. Also, financial capability has a direct moderate level significant negative impact on financial stress and direct moderate level significant positive impact on financial help seeking behavior of Small and Medium Entrepreneurs in Sri Lanka. The shrinking of financial capability moderately increased the financial stress and will moderately improve the financial help seeking behavior of the Small and Medium Entrepreneurs in Sri Lanka.
Small and Medium Entrepreneurs, Financial Capability, Financial Stress, Financial Help Seeking Behavior