THE EFFECT OF FINANCIAL LITERACY, BUSINESS DURATION AND EDUCATION LEVEL ON FINANCIAL SUSTAINABILITY OF MSMES
Keywords:
Financial Literacy; Financial Sustainability; MSMEs Business; Business Duration; Educational Background.
Abstract
This study aims to analyze how financial literacy business duration and background education affects the financial sustainability of msmes in Batam. Researcher used a quantitative approach with a survey method through questionnaires distributed to 384 msmes owners as a sample, which were selected using purposive sampling technique. The analysis employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the validity, reliability and relationships among the variables. Based on survey data from 384 MSME owners in Batam, results show that financial literacy has a significant positive impact indicating that owners with strong understanding of financial principles are better equipped to maintain and enhance the financial health of the business. Moreover, business duration also contributes positively suggesting that experience over time contributes to financial resilience, while education levels are surprisingly associated with slightly lower financial sustainability, implying that formal education may not directly translate into practical skills needed for msmes sustainability. This study concludes that financial literacy is the most dominant factor influencing financial sustainability, while business duration and education contribute to a lesser extent.
References
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Togun, O. R., Ogunrinade, R., Olalekan, O. T., & Jooda, T. D. (2022). Financial Inclusion and SMEs’ Performance: Mediating Effect of Financial Literacy under the Creative Common Attribution Non-Commercial 4.0. Journal of Business and Environmental Management (JBEM), 1(1), 23–33. Retrieved from https://journals.airsd.org/index.php/jbem
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Urefe, O., Odonkor, T. N., Chiekezie, N. R., & Agu, E. E. (2024). Corresponding author: Oghenekome Urefe Enhancing small business success through financial literacy and education. Magna Scientia Advanced Research and Reviews, 2024(02), 297–315. Retrieved from https://doi.org/10.30574/msarr.2024.11.2.0123
Yuwono, W., Susanna, Ramadhani, D. S., Sasmita, E. W., & Sihotang, W. H. (2023). Analysis of the Influence of the Role of Financial Literacy on Personal Financial Management. European Journal of Business and Management Research, 8(3), 57–61. https://doi.org/10.24018/ejbmr.2023.8.3.1891
Žalėnienė, I., & Pereira, P. (2021). Higher Education For Sustainability: A Global Perspective. Geography and Sustainability, 2(2), 99–106. https://doi.org/10.1016/j.geosus.2021.05.001
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243.
Ansir, V. R., Isyana, Y., Pongoliu, D., & Hamin, D. I. (2022). Analisis Tingkat Literasi Keuangan pada Pemilik UMKM di Kabupaten Gorontalo Utara Provinsi Gorontalo Tahun 2021. SEIKO : Journal of Management & Business, 5(2), 2022–2152. Retrieved from https://doi.org/10.37531/sejaman.v5i2.2084
Ariyati, I., Agustina, F., & Miliani T, G. (2021). Sistematic Literature Review: Pengaruh Literasi Keuangan Terhadap Kinerja Umkm Di Indonesia. Jurnal Ekonomika : Manajemen, Akuntansi, Dan Perbankan Syari’ah, 10(1), 104–118. https://doi.org/10.24903/je.v10i1.1337
Aulia, M. R. (2023). Digital Competencies and Experience In Partnership Program on SMEs Performance. Journal Research of Social Science, Economics, and Management, 2(7), 1416–1425. https://doi.org/10.59141/jrssem.v2i07.385
Azikin, N., Goso, G., Sahrir, S., & Hamid, R. S. (2023). Analisis Dampak Pendapatan, Lama Usaha, Usia Terhadap Literasi Keuangan Pelaku UMKM. Owner, 7(3), 2486–2493. https://doi.org/10.33395/owner.v7i3.1405
Batam, U. I. (2024). Financial Behavior as Key Factors Affecting Indonesian Gen-Z Entrepreneurial Intention. 6(2), 152–172. https://doi.org/10.35313/ijabr.v6i02.363
Brimble, M., Weaven, S., Wildman, K. L., Blue, L., Bodle, K., & Frazer, L. (2024). Examining the financial and commercial literacy of Australian Indigenous small business owners. Accounting and Finance, 1–24. https://doi.org/10.1111/acfi.13343
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.
Budiman, J., & Marvina, J. (2021). Analisa Pengaruh Financial Attitude, Financial Behavior, Financial Knowledge, Financial Anxiety dan Self-Efficacy terhadap Financial Literacy di Kota Batam. ComBInES-Conference on Management, Usiness, Innovation, Education and Social Science, 1(1), 2099–2109.
Cirprandy Riopaldo Tambunan. (2023). Kontribusi UMKM dalam Perekonomian Indonesia.
Dewi, V. I., Febrian, E., Effendi, N., Anwar, M., & Nidar, S. R. (2020). Financial literacy and its variables: The evidence from indonesia. Economics and Sociology, 13(3), 133–154. https://doi.org/10.14254/2071-789X.2020/13-3/9
Dhliwayo, S. (2021). The relationship between period operating and growth aspects in small businesses. International Journal of Entrepreneurship, 25(3), 1–19.
Fatchu Ukhriyawat, C., Mulyati, S., Opiani, R., Hasanah, U., Bisnis Digital, P., Ekonomi dan Bisnis, F., … Pascasarjana, P. (2024). Pengaruh Financial Technology, Literasi Keuangan, Lama Usaha Dan Likuiditas Terhadap Kinerja Keuangan Usaha Mikro. Measurement: Jurnal Akuntansi, 18(1), 142–150.
Hair, Joe F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research. European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128
Hair, Joseph F, Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). The Results of PLS-SEM Article information. European Business Review, 31(1), 2–24.
Harti, U., & Prayogo, Y. (2024). Pengaruh Skala Usaha,Umur Usaha Dan Omset Usaha Terhadap Penerapan Sistem Informasi Akuntansi Pada Umkm Di Kecamatan Paal Merah Kota Jambi. 9(1), 364–373. Retrieved from https://www.doi.org/10.30651/jms.v9i1.21741
Hossain, M. M., Ibrahim, Y., & Uddin, M. M. (2020). Finance, financial literacy and small firm financial growth in Bangladesh: the effectiveness of government support. Journal of Small Business and Entrepreneurship, 0(0), 1–26. https://doi.org/10.1080/08276331.2020.1793097
Hutapea, H. D., Lumbangaol, V. M., Hasugian, C., & Siahaan, S. M. (2024). PENGARUH LAMA USAHA , UKURAN USAHA SERTA MODAL USAHA TERHADAP KINERJA UMKM DENGAN LITERASI. 13(September), 1933–1952. https://doi.org/10.34127/jrlab.v13i3.1248
Iman Harymawan, Andini Tri Indahsari, & Fajar Kristanto Gautama Putra. (2022). Penguatan Keberlanjutan Umkm Indonesia Melalui Sustainable Finance Lab. Jurnal Layanan Masyarakat (Journal of Public Services), 6(2), 421–438. https://doi.org/10.20473/jlm.v6i2.2022.421-438
Khawar, S., & Sarwar, A. (2021). Financial literacy and financial behavior with the mediating effect of family financial socialization in the financial institutions of Lahore, Pakistan. Future Business Journal, 7(1), 1–11. https://doi.org/10.1186/s43093-021-00064-x
Klapper, L., & Lusardi, A. (2019). Financial literacy and financial resilience: Evidence from around the world. Financial Management, 49(3), 1–26. https://doi.org/10.1111/fima.12283
Machin, Muhammad Reza Aulia, Joni Hendra, Elvina Safitri, & Bawono, A. (2023). Keberlanjutan UMKM di Jawa Barat di Tinjau Dari New-era Business : Transformasi Digital, Dividen Digital, dan Kewirausahaan. Jurnal Bisnisman : Riset Bisnis Dan Manajemen, 5(1), 01–15. https://doi.org/10.52005/bisnisman.v5i1.130
Martono, S., & Febriyanti, R. (2023). Pengaruh Inklusi Keuangan, Literasi Keuangan Dan Pengelolaan Keuangan Terhadap Kinerja Umkm Di Kota Salatiga. Jurnal Ekonomi Pendidikan Dan Kewirausahaan, 11(2), 153–168. https://doi.org/10.26740/jepk.v11n2.p153-168
Maushufi, N. N., & Wilasittha, A. A. (2024). Peran Literasi dan Pengelolaan Keuangan dalam Meningkatkan Pendapatan UMKM. 4, 9865–9879.
Meressa, H. A. (2023). Entrepreneurial financial literacy - small business sustainability nexus in Ethiopia. Cogent Business and Management, 10(2), 1–14. https://doi.org/10.1080/23311975.2023.2218193
OJK. (2022). Siaran Pers: Indeks Literasi dan Inklusi Keuangan Masyarakat Meningkat.
Rukhmana, T. (2021). Jurnal Edu Research Indonesian Institute For Corporate Learning And Studies (IICLS) Page 25. Jurnal Edu Research : Indonesian Institute For Corporate Learning And Studies (IICLS), 2(2), 28–33.
Seraj, A. H. A., Fazal, S. A., & Alshebami, A. S. (2022). Entrepreneurial Competency, Financial Literacy, and Sustainable Performance—Examining the Mediating Role of Entrepreneurial Resilience among Saudi Entrepreneurs. Sustainability (Switzerland), 14(17). https://doi.org/10.3390/su141710689
Tjahja, R. D. (2022). Smart Dashboard: Akselerasi Bagi Pengembangan UMKM Syariah.
Togun, O. R., Ogunrinade, R., Olalekan, O. T., & Jooda, T. D. (2022). Financial Inclusion and SMEs’ Performance: Mediating Effect of Financial Literacy under the Creative Common Attribution Non-Commercial 4.0. Journal of Business and Environmental Management (JBEM), 1(1), 23–33. Retrieved from https://journals.airsd.org/index.php/jbem
Tubastuvi, N., Ramadani, A. G., Rachmawati, E., & Rahmawati, I. Y. (2022). Pengaruh Financial Literacy, Financial Behavior dan Financial Experience Terhadap Keputusan Investasi Generasi Milenial di Batam. Jurnal Manajemen Dan Bisnis Indonesia, 8(1), 57–64. https://doi.org/10.32528/jmbi.v8i1.6464
Tumba, N. J., Onodugo, V. A., Akpan, E. E., & Babarinde, G. F. (2022). Financial literacy and business performance among female micro-entrepreneurs. Investment Management and Financial Innovations, 19(1), 156–167. https://doi.org/10.21511/imfi.19(1).2022.12
Urefe, O., Odonkor, T. N., Chiekezie, N. R., & Agu, E. E. (2024). Corresponding author: Oghenekome Urefe Enhancing small business success through financial literacy and education. Magna Scientia Advanced Research and Reviews, 2024(02), 297–315. Retrieved from https://doi.org/10.30574/msarr.2024.11.2.0123
Yuwono, W., Susanna, Ramadhani, D. S., Sasmita, E. W., & Sihotang, W. H. (2023). Analysis of the Influence of the Role of Financial Literacy on Personal Financial Management. European Journal of Business and Management Research, 8(3), 57–61. https://doi.org/10.24018/ejbmr.2023.8.3.1891
Žalėnienė, I., & Pereira, P. (2021). Higher Education For Sustainability: A Global Perspective. Geography and Sustainability, 2(2), 99–106. https://doi.org/10.1016/j.geosus.2021.05.001
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243.
Published
2026-01-30
How to Cite
Kennedy, K., Heryanto, H., & Ramadani, A. G. (2026). THE EFFECT OF FINANCIAL LITERACY, BUSINESS DURATION AND EDUCATION LEVEL ON FINANCIAL SUSTAINABILITY OF MSMES. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 10(1), 257-272. https://doi.org/10.31955/mea.v10i1.6810
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