The impacts of social capital and financial literacy on business performance with financial access SMEs Batik Pamekasan Regency as mediation

Abstract

Apart from many studies related to Social Capital, Financial Literacy, Financial Access, and Financial Performance, there are still few studies that are associated between social capital and financial literacy with business performance that uses financial access as a mediation. This research was guided by the Theory of Behavioral Finance (TBF) and Dual-Process Theory (DPT). This study aimed to examine and analyze the effect of social capital and financial literacy on business performance through financial access for Batik SMEs in Pamekasan Regency. This study uses the Pamekasan Regency Batik SMEs as the object of research. This study uses a quantitative approach. The population in this study is Batik SMEs in Pameksan Regency. The sampling technique used is proportional sampling. The sample in this study is calculated using the Slovin formula to produce 135 respondents of SMEs Batik Pamekasan Regency. The data collection technique in this study was carried out by distributing questionnaires. The data analysis technique was carried out by SEM-PLS using 3.0 software. The results show an influence of social capital, financial literacy, and financial access on the business performance of Batik SMEs in Pamekasan Regency. Access to finance can mediate the influence between social capital and financial literacy on the business performance of Pamekasan Batik SMEs.

The Impact of Fintech and Financial Literacy on MSME Development through Access to Finance

“…Financial literacy is a term that refers to the knowledge and skills needed to make informed and effective financial decisions, such as budgeting, saving, investing, debt management and retirement planning. Financial literacy is important for people of all ages and income levels because it can help them make better decisions and improve their financial well-being (Junico et al, 2022;Lusardi& Mitchell, 2011;Xu, 2012;Zaniarti et al, 2022), several previous studies have shown that financial literacy has a positive effect on financial access (Shofi, 2022;Ye &Kulathunga, 2019;Zaniarti et al, 2022). Based on the results of previous research, it can be concluded that the financial literacy of MSME actors has an impact on the ability to access finance.…”

The effect of financial literacy on business performance through mediation of financial access and financial risk attitude

“…Business performance is the result of work completed by individuals or groups in a company over a specific time period in relation to the organizational goals that have been established (Ratnawati, 2020). Performance has several meanings, including growth, survival, success, and competitiveness, which are evaluated from both financial and non-financial perspectives (Shofi et al, 2022). Performance measurement can be used to determine the extent of the company's performance in achieving predetermined goals, improving ineffective business processes, and increasing operational efficiency and effectiveness.…”

“…Eniola and Entebang (2017) found that the total effect of a business manager's financial knowledge, financial awareness, and financial attitudes in changing financial literacy to improve MSME performance in three Nigerian states. Other studies that support the impact of financial literacy on MSME performance include (Agyei, 2018;Mabula & Ping, 2018;Dewi et al, 2018;KMMCB et al, 2019;Ye & Kulathunga, 2019;Buchdadi et al, 2020;Hamdana et al, 2021;and Shofi et al, 2022). Improving financial literacy is regarded as a life skill and a necessary foundation for MSME management, economic stability, and community finance (Mabula & Ping, 2018a).…”