Authors
- Priyo PriyantoroUnivesity of Brawijayahttps://orcid.org/0009-0006-4561-215X
- Kusuma RatnawatiUniversity of Brawijayahttps://orcid.org/0000-0002-8308-2034
- Siti AisjahUniversity of Brawijaya
DOI:
https://doi.org/10.20525/ijrbs.v12i9.3024Keywords:
Financial Literacy, Financial Access, Financial Risk Attitudes, Business Performance, MSMEsAbstract
MSMEs play a vital role in global economic development, as well as being the key to most businesses and important contributors to job creation and economic development. However, amidst the uncertain business and economic situation, most MSMEs have to struggle to maintain their business performance. So efforts are needed from various parties to improve business performance in MSMEs. This research aims to test and analyze the influence of financial literacy levels on business performance, with financial access and financial risk attitudes as mediating variables. Sampling in this research used a purposive sampling technique among tofu processing industry players in Kediri City. The sample was determined using the Slovin method and a sample of 400 respondents was obtained. The method used in this research uses Structural Equation Model (SEM) Partial Least Square (PLS) analysis through the SmartPLS data processing program version 3. The results of this research show that all hypotheses are accepted. Financial literacy, access to finance and financial risk attitudes have a positive and significant effect on business performance. Financial access is able to mediate the relationship between financial literacy and financial risk attitudes, and financial risk attitudes are also able to mediate the relationship between financial literacy and business performance in the Kediri City tofu processing industry.
Downloads
Download data is not yet available.
Author Biographies
Priyo Priyantoro, Univesity of Brawijaya
Masters, Management Department, Faculty of Economics and Business, University of Brawijaya, Blitaran, 64481, Nganjuk, Indonesia.
Kusuma Ratnawati, University of Brawijaya
Doctor, Faculty of Economics and Business, University of Brawijaya, MT Haryono, 65145, Malang, Indonesia.
Siti Aisjah, University of Brawijaya
Doctor, Faculty of Economics and Business, University of Brawijaya, Joyo Grand Housing, 65144, Malang, Indonesia.
References
Adomako, S., Danso, A., & Ofori Damoah, J. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43–61. https://doi.org/10.1080/13691066.2015.1079952 DOI: https://doi.org/10.1080/13691066.2015.1079952
Agyapong, D., & Attram, A. B. (2019). Effect of owner-manager’s financial literacy on the performance of SMEs in the Cape Coast Metropolis in Ghana. Journal of Global Entrepreneurship Research, 9(1), 1–13. https://doi.org/10.1186/s40497-019-0191-1 DOI: https://doi.org/10.1186/s40497-019-0191-1
Agyei, S. K. (2018). Culture, financial literacy, and SME performance in Ghana. Cogent Economics and Finance, 6(1). https://doi.org/10.1080/23322039.2018.1463813 DOI: https://doi.org/10.1080/23322039.2018.1463813
Aisjah, S., Arsawan, I. W. E., & Suhartanto, D. (2023). Predicting SME’s business performance: Integrating stakeholder theory and performance based innovation model. Journal of Open Innovation: Technology, Market, and Complexity, 9(3), 100122. https://doi.org/10.1016/j.joitmc.2023.100122 DOI: https://doi.org/10.1016/j.joitmc.2023.100122
Barney, J. (1991a). Firm Reources ad Sustained Competitive Advantege. In Journal of Management (Vol. 17, Issue 1, pp. 99–120).
Barney, J. (1991b). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108 DOI: https://doi.org/10.1177/014920639101700108
Beck, T., & Demirguc-Kunt, A. (2006). Small and medium-size enterprises: Access to finance as a growth constraint. Journal of Banking and Finance, 30(11), 2931–2943. https://doi.org/10.1016/j.jbankfin.2006.05.009 DOI: https://doi.org/10.1016/j.jbankfin.2006.05.009
Betz, N. E., Weber, E. U., & Blais, A.-R. (2002). A Domain-specific Risk-attitude Scale: Measuring Risk Perceptions and Risk Behaviors. Journal of Behavioral Decision Making, 290(August), 263–290. DOI: https://doi.org/10.1002/bdm.414
Bongomin, G. O. C., Ntayi, J. M., Munene, J. C., & Malinga, C. . (2017). The relationship between access to ?nance and growth of SMEs in developing economies: Financial literacy as a moderator. Review of International Business and Strategy, 27(4). file:///F:/ARTICULOS/wang2018 (2).pdf DOI: https://doi.org/10.1108/RIBS-04-2017-0037
Buchdadi, A. D., Sholeha, A., Ahmad, G. N., & Mukson. (2020). the Influence of Financial Literacy on Smes Performance Through Access To Finance and Financial Risk Attitude As Mediation Variables. Academy of Accounting and Financial Studies Journal, 24(5), 1–16.
Cacciotti, G., & Hayton, J. C. (2015). Fear and entrepreneurship: A review and research agenda. International Journal of Management Reviews, 17(2), 165–190. https://doi.org/10.1111/ijmr.12052 DOI: https://doi.org/10.1111/ijmr.12052
Chen, H., & Volpe, R. P. (1998). An Analysis of Personal Financial Literacy Among College Students. Financial Service Review, 7(2), 107–128. https://doi.org/10.1108/JCM-01-2018-2514 DOI: https://doi.org/10.1016/S1057-0810(99)80006-7
Chimwa, L., & Munyanyi, W. (2019). Risk Attitude, Risk Perception and Risk Management Strategies Adoption in Zimbabwean Small and Medium Enterprises. Journal of Management and Economic Studies, 1(2). https://doi.org/10.26677/TR1010.2019 DOI: https://doi.org/10.26677/TR1010.2019.73
Claessens, S. (2006). Access to financial services: A review of the issues and public policy objectives. World Bank Research Observer, 21(2), 207–240. https://doi.org/10.1093/wbro/lkl004 DOI: https://doi.org/10.1093/wbro/lkl004
Dahmen, P., & Rodríguez, E. (2014). Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center. International Journal Of Numeracy, 7(1). DOI: https://doi.org/10.5038/1936-4660.7.1.3
Davidsson, P., Delmar, F., & Wiklund, J. (2006). Entrepreneurship and the growth of firms. In Entrepreneurship and the Growth of Firms (Issue January). https://doi.org/10.4337/9781781009949 DOI: https://doi.org/10.4337/9781781009949.00009
Dewi, W. K., Yurniwati, & Rahman, A. (2018). The Effect of Financial Literacy and Financial Access to the Performance of SMEs (Small and Medium Enterprises) in the Trade Sector of Padang City. International Journal of Progressive Sciences and Technologies (IJPSAT), 10(2), 371–381.
Eniola, A. A., & Entebang, H. (2015a). Financial literacy and SME firm performance. International Journal of Research Studies in Management, 5(1), 31–43. https://doi.org/10.5861/ijrsm.2015.1304 DOI: https://doi.org/10.5861/ijrsm.2015.1304
Eniola, A. A., & Entebang, H. (2015b). Government Policy and Performance of Small and Medium Business Management. International Journal of Academic Research in Business and Social Sciences, 5(2), 237–248. https://doi.org/10.6007/ijarbss/v5-i2/1481 DOI: https://doi.org/10.6007/IJARBSS/v5-i2/1481
Eniola, A. A., & Entebang, H. (2017). SME Managers and Financial Literacy. Global Business Review, 18(3), 559–576. https://doi.org/10.1177/0972150917692063 DOI: https://doi.org/10.1177/0972150917692063
Gustafsson, C., & Omark, L. (2015). Financial literacy’s effect on financial risk tolerance: A quantitative study on whether financial literacy has an increasing or decreasing impact on financial risk tolerance. University of Umea School of Business & Economics Dissertation, 1–76. http://www.diva-portal.org/smash/get/diva2:826787/FULLTEXT01.pdf
Hamdana, H., Pratikto, H., & Sopiah, S. (2021). A Conceptual Framework Of Entrepreneurial Orientation, Financial Literacy, And MSMEs Performance: The Role Of Access To Finance. Devotion?: Journal of Community Service, 3(2), 67–82. https://doi.org/10.36418/dev.v3i2.96 DOI: https://doi.org/10.36418/dev.v3i2.96
Kaban, R. F., & Safitry, M. (2020). Does financial literacy effect to perfomance and sustainability of culinary MSMEs in greater jakarta? Ekonomi Bisnis, 25(1), 1. https://doi.org/10.17977/um042v25i1p1-13 DOI: https://doi.org/10.17977/um042v25i1p1-13
Khajar, I., & Ghoniyah, N. (2022). Smes’ Performance Improvement In Non- Agricultural Production Through Financial Literacy Mediation By External Funding Access In Jepara, Indonesia. Journal of Applied Management (JAM), 20(2). DOI: https://doi.org/10.21776/ub.jam.2022.020.02.13
KMMCB, K., Jianmu, Y., & Weerathunga, P. R. (2019). Financial Literacy and SMEs Performances; Mediating Role of Risk Attitude. Proceedings of the 16th Internationl Conference on Innovation & Management, 1273–1283.
Kumar, A., Beck, T., Campos, C., & Chattopadhyay, S. (2005). Assessing financial access in Brazil. In World Bank Working Paper (Issue 50). DOI: https://doi.org/10.1596/978-0-8213-6131-3
Lawal, F., Adegbuyi, O. A., Iyiola, O. O., Ayoade, O. E., & Taiwo, A. A. (2018). Nexus Between Informal Networks And Risk-Taking: Implications For Improving The Performance Of Small And Medium Enterprises (SMES) in Nigeria The impact of Microfinance Banks’ Activities in Promoting Financial Inclusion in Nigeria View project. Academy of Strategic Management Journal, 17(2). https://www.researchgate.net/publication/326044406
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5 DOI: https://doi.org/10.1257/jel.52.1.5
Mabula, J. B., & Ping, H. D. (2018a). Financial literacy of SME managers’ on access to finance and performance: The mediating role of financial service utilization. In International Journal of Advanced Computer Science and Applications (Vol. 9, Issue 9, pp. 32–41). https://doi.org/10.14569/ijacsa.2018.090905 DOI: https://doi.org/10.14569/IJACSA.2018.090905
Mabula, J. B., & Ping, H. D. (2018b). Use of technology and SME managers’ financial literacy in developing economies. ACM International Conference Proceeding Series, 9(6), 145–152. https://doi.org/10.1145/3241748.3241765
Maria, E., Lalaine, C., & Ph, D. (2023). Financial Dimension?: A Tool for Teachers Financial Literacy. 06(03), 1062–1072. https://doi.org/10.47191/ijmra/v6-i3-26 DOI: https://doi.org/10.47191/ijmra/v6-i3-26
Nkundabanyanga, S. K., Kasozi, D., Nalukenge, I., & Tauringana, V. (2014). Lending terms, financial literacy and formal credit accessibility. International Journal of Social Economics, 41(5), 342–361. https://doi.org/10.1108/IJSE-03-2013-0075 DOI: https://doi.org/10.1108/IJSE-03-2013-0075
Nunoo, J., & Andoh, F. K. (2012). Sustaining Small and Medium Enterprises through Financial Service Utilization: Does Financial Literacy Matter? Jacob. (Unpublished Paper) Presented at the Agricultural & Applied Economics Association’s 2012 AAEA Annual Meeting, Seattle, Washington.
OECD. (2016). International Survey of Adult Financial Literacy Competencies. Oecd, 1–100. www.oecd.org/finance/OECD-INFE-International-Survey-of-Adult-Financial-Literacy-Competencies.pdf%0A
OJK. (2017). Salinan Surat Edaran Otoritas Jasa Keuangan Nomor 30 /Seojk.07/2017.
Olawale, F., & Garwe, D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African Journal of Business Management, 4(5), 729–738. http://www.academicjournals.org/AJBM
Ratnawati, K. (2020). The Influence of Financial Inclusion on MSMEs’ Performance Through Financial Intermediation and Access to Capital. Journal of Asian Finance, Economics and Business, 7(11), 205–218. https://doi.org/10.13106/jafeb.2020.vol7.no11.205 DOI: https://doi.org/10.13106/jafeb.2020.vol7.no11.205
Republika. (2019). Tingkat Kematian UKM di Indonesia Masih Tinggi. Republika.Com. https://ekonomi.republika.co.id/berita/pmuxj1291/tingkat-kematian-ukm-di-indonesia-masih-tinggi
Robert M. Grant. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(Special Issue), 109–122. http://proquest.umi.com/pqdweb?RQT=562&MRR=R&TS=1297501326&clientId=27625%5Cnhttp://proquest.umi.com/pqdweb?did=11194159&Fmt=7&clientId=27625&RQT=309&VName=PQD DOI: https://doi.org/10.1002/smj.4250171110
Sabana, B. (2014). Entrepreneur Financial Literacy, Financial Access, Transaction Costs and Performance of Micro Enterprises in Nairobi City County, Kenya. International Journal of Research in Management, Economics and Commerce, 231.
Salome, N. K., & Memba, F. (2014). Financial Literacy & Financial Performance of Art and Craft Business in Kenya Abstract?: THE International Journal of Business & Management, 2(10), 133–140.
Satiti, N. R. (2020). Financial literacy: an essential in small medium entreprises (SMEs) performance. Manajemen Bisnis, 10(2), 51–61. https://doi.org/10.22219/jmb.v10i2.14825 DOI: https://doi.org/10.22219/jmb.v10i2.14825
Sekaran, U., & Bougie, R. (2016). Research Methods For Business A Skill Building Approach. In Wiley. -Wiley. https://doi.org/10.1007/978-94-007-0753-5_102084
Shofi, F., Siti Aisjah, & Nanang Suryadi. (2022). The impacts of social capital and financial literacy on business performance with financial access SMEs Batik Pamekasan Regency as mediation. International Journal of Research in Business and Social Science (2147- 4478), 11(8), 213–220. https://doi.org/10.20525/ijrbs.v11i8.2146 DOI: https://doi.org/10.20525/ijrbs.v11i8.2146
Sibanda, K., Hove-Sibanda, P., & Shava, H. (2018). The impact of SME access to finance and performance on exporting behaviour at firm level: A case of furniture manufacturing SMEs in Zimbabwe. Acta Commercii, 18(1). https://doi.org/10.4102/ac.v18i1.554 DOI: https://doi.org/10.4102/ac.v18i1.554
Umogbaimonica, E., Agwa, T. R., & Asenge, L. E. (2018). Financial Literacy and Performance of Small and Medium Scale Enterprises in Benue State , Nigeria. International Journal of Economics, Business and Management Research, 2(04), 65–79. https://ijebmr.com/uploads/pdf/archivepdf/2020/IJEBMR_02_230.pdf
van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449–472. https://doi.org/10.1016/j.jfineco.2011.03.006 DOI: https://doi.org/10.1016/j.jfineco.2011.03.006
Wati, R. C., Sumiati, & Andarwati. (2021). The effect of financial knowledge on firm performance?: The role of financial risk attitude as moderation. Research in Business & Social Science, 10(8), 236–249. DOI: https://doi.org/10.20525/ijrbs.v10i8.1450
Yakob, S., Yakob, R., B.A.M, H.-S., & Ahmad Rusli, R. Z. (2021). Financial Literacy and Financial Performance of Small and Medium-sized Enterprises. The South East Asian Journal of Management, 15(1). https://doi.org/10.21002/seam.v15i1.13117 DOI: https://doi.org/10.21002/seam.v15i1.13117
Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in SMEs? A developing country perspective. Sustainability (Switzerland), 11(10). https://doi.org/10.3390/su11102990 DOI: https://doi.org/10.3390/su11102990
