IDEAS home Printed from https://ideas.repec.org/h/spr/advbcp/978-94-6463-008-4_46.html

The Effect of Financial Literacy and Financial Inclusion on MSMEs Performance

In: Proceedings of the 19th International Symposium on Management (INSYMA 2022)

Author

Listed:
  • Mangihut Parlindungan Aritonang

    (University of North Sumatra)

  • Isfenti Sadalia

    (University of North Sumatra)

  • Chairul Muluk

    (University of North Sumatra)

Abstract

The performance of Micro, Small, and Medium Enterprises (MSMEs) has a vital role in the economy in Indonesia. Reaching 99.9% of the total businesses in Indonesia, MSMEs contribute significantly to job creation and employment. However, they still face many problems, especially capital problems, which are indicated by the low level of financial literacy and financial inclusion of MSME actors in Indonesia. This study aims to examine the effect and relationship of financial literacy and financial inclusion either partially or simultaneously on the performance of MSMEs in Indonesia. The population in this study was 517 MSMEs that were assisted by SME & IKM DPW of North Sumatra Province spread over 33 Regencies & Cities in North Sumatra. This study type is quantitative research using an associative approach and using PLS (Partial Least Square) analysis tools. The impact show that financial literacy and financial inclusion partially and simultaneously significantly affect the performance of MSMEs. Furthermore, skills and knowledge are the two most significant financial literacy indicators. Meanwhile, connection and quality are financial inclusion indicators with the most significant effect. Thus, it can be concluded that MSMEs performance in Indonesia can continuously be improved by increasing financial literacy and financial inclusion efforts. The government and relevant stakeholders need to continue developing, adjusting, and ensuring that the current and future programs and policies can be implemented well to address various problems most MSMEs face.

Suggested Citation

  • Mangihut Parlindungan Aritonang & Isfenti Sadalia & Chairul Muluk, 2023. "The Effect of Financial Literacy and Financial Inclusion on MSMEs Performance," Advances in Economics, Business and Management Research, in: Werner Ria Murhadi & Dudi Anandya & Noviaty Kresna Darmasetiawan & Juliani Dyah Trisnawati & Putu An (ed.), Proceedings of the 19th International Symposium on Management (INSYMA 2022), pages 356-368, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-008-4_46
    DOI: 10.2991/978-94-6463-008-4_46
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:advbcp:978-94-6463-008-4_46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.