Financial Research Journal

Financial Research Journal

Explaining the Drivers of Financial Sustainability through the Enhancement of Financial Literacy: An Emphasis on the MICMAC Model

Document Type : Research Paper

Author
Amir Hoseini
MSc., Department of Accounting., Urmia University, Urmia, Iran.
10.22059/frj.2025.386577.1007671
Abstract
Objective
Financial literacy offers numerous benefits for individuals, businesses, society, and the planet in promoting sustainable finance. For individuals, it helps align their personal values and goals with financial decisions, diversifies their portfolios, reduces their environmental footprint, and contributes to positive social change. For businesses, it facilitates access to new funding sources, enhances reputation, improves risk management, and creates long-term value. For society, it strengthens social inclusion, reduces poverty and inequality, and supports human rights and democracy. This study aims to examine the drivers of financial sustainability within the framework of financial literacy enhancement. It argues that to make informed investment decisions about financial products with sustainable characteristics, private investors must possess a high level of financial literacy and sustainable financial literacy.
 
Methods
This research is applied in terms of its objective and descriptive-analytical in terms of data collection. Information was gathered through both documentary-library and field methods. Financial literacy components were assessed using eleven dimensions and analyzed with MICMAC and Scenario Wizard software. The model analyzes the interrelationships between variables, enabling prioritization of influential factors and providing practical strategies to strengthen financial sustainability. Key factors and probable scenarios for financial sustainability within the framework of enhanced financial literacy were identified. The study utilized an expert-based sample of 20 participants, selected using the snowball sampling method.
 
Results
The findings identified eleven core components that shape managers’ financial literacy, including understanding and analyzing financial statements, regulations related to social security insurance, labor laws, tax regulations, commercial law, stock market investment regulations, banking regulations, check-related laws, anti-money laundering regulations, and import-export regulations. These components play a vital role in financial decision-making, minimizing legal risks, and enhancing organizational performance. Tax regulations, as a framework for calculating, paying, and managing direct and indirect taxes, are influential in structuring financial activities and preventing issues arising from tax non-compliance. Moreover, commercial law, encompassing regulations on company formation and management, commercial contracts, and bankruptcy, serves as an essential legal tool for managing business relationships and activities. These components provide the necessary infrastructure to optimize financial and legal processes, mitigate risks, and ensure organizational compliance with legal requirements. Awareness and mastery of these topics lead to improved overall organizational performance and confidence in managerial decision-making.
 
Conclusion
High financial literacy directly correlates with intelligent financial behaviors, such as optimal resource utilization and cost reduction. Societies that have widely implemented financial literacy programs have experienced significant improvements in welfare indices and financial sustainability. Managers must familiarize themselves with the structure and conditions for participating in international markets. Understanding the required conditions and permits, including commercial cards, customs procedures, and regulations related to smuggling, constitutes essential knowledge for managers. Additionally, knowledge of the laws and regulations governing free trade zones and special economic zones is essential for informed managerial decision-making, underscoring the importance of awareness and understanding in this area.
Keywords
Financial sustainability
Financial literacy
Sustainable finance
MICMAC analysis
Financial decision-making
Subjects
 
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Financial Research Journal
Volume 28, Issue 2
2026
Pages 598-630