FINANCIAL management in micro and small businesses – Challenges and Solutions.

Abstract

Financial management is a critical factor for the sustainability of micro and small enterprises (MSEs), which constitute the majority of businesses in Brazil and account for over 70% of formal employment. Despite their socioeconomic relevance, MSEs face significant constraints, such as deficient financial planning, weak cash flow control, and limited access to credit. The lack of structured management practices hinders working capital forecasting and leads to short-term financial decisions, often involving costly credit lines. Credit restrictions are exacerbated by informality, lack of collateral, and low financial maturity. In this context, financial education emerges as a strategic tool for the professionalization of management, fostering the adoption of analytical and technological tools, such as financial control software. Furthermore, public policies aimed at tax simplification and expanded credit access are essential to strengthen the MSE ecosystem. This study analyzes the main financial challenges faced by MSEs and proposes accessible and effective strategies to improve their financial management, highlighting their essential role in economic development and employment generation in Brazil.