Management Behavior: The Role of Financial Literacy and Financial Knowledge of MSME Actors

Selvi Selvi, Abd. Rahman Pakaya, Faiza Husnayeni Nahar

Abstract


The significance of Micro, Small, and Medium Enterprises (MSMEs) is pronounced globally and plays a crucial part in a nation's economic development. The advancement of MSMEs in Gorontalo Province has consistently progressed, with significant growth observed between 2016 and 2020 in quantity, employment absorption, investment value, and output value. The advancement of MSMEs in Gorontalo City indicates the emergence of effective financial management practices, warranting an examination of the elements that affect the financial management behavior of MSME operators. This study seeks to utilize Planned Behaviour Theory to clarify the impact of financial literacy and financial knowledge on improving financial management behavior. A quantitative approach was utilized with a sample size of 100 proprietors in Gorontalo City. Multiple regression analysis revealed that financial literacy and knowledge significantly affect the financial management behavior of MSME operators in Gorontalo City. In Gorontalo City, the financial management practices of MSME entrepreneurs are influenced by their financial literacy and awareness. Utilizing the Theory of Planned Behaviour framework, this study examines attitudes toward behavior, evaluates subjective norms, and assesses behavioral control in the financial management of MSMEs, highlighting the influence of literacy and knowledge among MSME owners in Gorontalo City, all encapsulated within a singular model. The results of this investigation suggest that the evolution of Planned Behavior Theory is influenced by various internal and external factors that determine individual behavior. MSME members with financial acumen strengthen financial management practices, while those skilled in bookkeeping, budgeting, risk assessment, and savings further improve financial management behavior.


Keywords


Financial Literacy; Financial Knowledge; Financial Management Behavior

Full Text:

PDF

References


Agyapong, D. and Attram, AB 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.

Andrew, V. and Nanik, L. 2014. The Relationship between Demographic Factors and Financial Knowledge with the Financial Behavior of Private Employees in Surabaya. Finesta, 02(02), pp. 35-39.

Anisa, S., Hartono, and Armin, R. 2023. The Influence of Financial Knowledge, Financial Attitude, Locus of Control and Income on Financial Management Behavior in Culinary Sub-Sector MSMEs in Trawas District. International Journal of Management and Business Economics (IJMEBE), 1(3), pp. 202-207.

Ajzen, I. 1991. The Theory of Planned Behavior. Organizational Behavior and Human Decision Processes, 50, 179-211.

Ajzen, I. 2020. The theory of planned behavior: Frequently asked questions. Human Behavior and Emerging Technologies, 2(4), 314–324.

Asmin, E. A., Ali, M., Nohong, M., and Mardiana, R. 2021. The Effect of Financial Self-Efficacy and Financial Knowledge on Financial Management Behavior. Golden Ratio of Finance Management, 1(1), 15–26.

Bahry, F. M. 2018. Pengaruh Pengetahuan Keuangan, Sikap Terhadap Uang Dan Tingkat Pendapatan Pada Pengelolaan Keuangan Keluarga Di Sidoarjo. Journal of Materials Processing Technology, 1(1), 1–8.

Bari, A. F., Yunanto, A., and Shaferi, I. 2020. The Role of Financial Self-Efficacy in Moderating Relationships Financial Literacy and Financial Management Behavior. International Sustainable Competitiveness Advantage, 2018, 51–60.

Briliani, T. R. 2019. The Influence of Income, Financial Experience and Financial Knowledge on Family Financial Behavior in Madiun City. Perbanas College of Economics Surabaya.

Caroline, N., Harriet, K., and Anne, N. 2016. Top management commitment for successful small and medium-enterprises (SMEs): A hoax or a reality?. European Scientific Journal, ESJ, 12(4), 259.

Chen, H. and Volpe, R. P. 2002. Gender Differences in Personal Financial Literacy among college students. Financial services review, 11(2002), 289-307.

Coordinating Ministry for Economic Affairs of the Republic of Indonesia. 2021. Dukungan Akuntabilitas dan Analisa Laporan Keuangan Perusahaan Dalam Mengatasi Permasalahan BUMN. Ekon.Go.Id.

Delić, D., Contaldo, N., Lolić, B., Moravčević, and Bertaccini, A. 2016. Isease ote first report of 'Candidatus phytoplasma solani' in pepper and celery in Bosnia and Herzegovina. Journal of Plant Pathology, 98(1), 184.

Fishbein, M. and Ajzen, I. 1975. Belief, Attitude, Intention, and Behavior: An Introduction to Theory and Research. Reading, MA: Addison-Wesley.

Gahagho, Y. D., Rotinsulu, T. O., and Mandeij, D. 2021. Pengaruh Literasi Keuangan Sikap Keuangan Dan Sumber Pendapatan Terhadap Perilaku Pengelolaan Keuangan Mahasiswa Fakultas Ekonomi Dan Bisnis Unsrat Dengan Niat Sebagai Variabel Intervening. EMBA Journal, 9(1), 543–555. DOI: https://doi.org/10.35794/emba.v9i1.32337.

Garman, E. T. and Forgue, R. E. 2010. Personal Finance International Edition. Canada: South Western Cengage Learning.

Herawati, N. T., Dewi, L. G. K., Wahyuni, M. A., and Savitri, N. L. A. 2020. L'auto-efficacité financière: un médiateur pour faire progresser le comportement financier des étudiants en comptabilité. Journal of Academic Finance, 11(2), 226–241. DOI : https://doi.org/10.59051/joaf.v11i2.392.

Hermansson, C. and Jonsson, S. 2021. The impact of financial literacy and financial interest on risk tolerance. Journal of Behavioral and Experimental Finance, 29, 100450.

Horne, J. C. V. and Wachowicz, Jr. 2012. Principles of Financial Management. 13th Edition. Jakarta: Salemba Empat.

Huston, S. J. 2010. Measuring Financial Literacy. Journal of Consumer Affairs, 44(2), 296–316.

Ishtiaq, M., Imtiaz, A., Hussain, S., and Anum, R. 2020. Financial Self-Efficacy and Women's Personal Finance Behaviour: A Case study of Public Sector Banks in Pakistan. Pacific Business Review International, 11(8), 96–117.

Ismail, S., Faique, F. A., Bakri, M. H., Zain, Z. M., Idris, N. H., Yazid, Z. A., Daud, S., and Taib, N. M. 2017. The Role of Financial Self-Efficacy Scale in Predicting Financial Behavior. Advanced Science Letters, 23(5), 4635–4639.

Kempson, E., Finney, A., and Poppe, C. 2017. Financial well-being: a conceptual model and preliminary analysis. Norwey: Oslo and Akershus University College of Applied Sciences.

Khan, M. S. R., Rabbani, N., and Kadoya, Y. 2020. Is Financial Literacy Associated With Investment In Financial Markets in the United States?. Sustainability, 12(18), pp. 1-14.

Kholilah, N. A. l. and Iramani, R. 2013. Study of Financial Management Behavior in Surabaya Society. Journal of Business and Banking, 3(1), 69–80.

Kiyosaki, T. R. 2003. Increase Your IQ Keuangan. Jakarta. PT. Gramedia Pustaka Utama.

Lusardi, A. and Mitchell, O. S. 2014. The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5–44.

Mandell, L. and Klein, L. S. 2009. The Impact of Financial Literacy Education on Subquent Financial Behaviour. Journal of Financial Counseling and Planning, 20(1), 15-24.

Morina, D. and Gashi, P. 2016. The role of smes on the economic development: kosova’s case. CRC-Journal, 3(5), pp. 167-180.

Mustika, Yusuf, N., and Taruh, V. 2022. The Influence of Financial Literacy, Financial Attitude and Academic Ability on the Financial Management Behavior of Accounting Students, Faculty of Economics, State University of Gorontalo. Accounting Student Journal, 1(1), pp. 82-96.

Mutegi, H. K., Njeru, P. W., and Ongesa, N. T. 2015. Financial Literacy and Its Impact on Loan Repayment By Small and Medium Entrepreneurs. International Journal of Economics, Commerce and Management, III(3), pp. 1–28.

Perry, G. V. and Morris, D. M. 2005. Who is in control? The role of self perception, knowledge, and income in explaining consumer financial behavior. The Journal of Consumer Affairs, 39(2), pp. 299-313.

Pramestiningrum, D. R. and Iramani, I. 2020. Pengaruh literasi keuangan, financial capital, kebijakan pemerintah terhadap kinerja usaha pada usaha kecil dan menengah di Jawa Timur. Journal of Business and Banking, 9(2), 279.

Rahim, S. and Balan, V. R. 2020. Financial literacy: The impact on the Profitability of the SMEs in Kuching. International Journal of Business and Society, 21(3), 1172–1191.

Ramalho, T. B., and Forte, D. 2019. Financial literacy in Brazil – Do Knowledge and Self-Confidence Relate to Behavior?. RAUSP Management Journal, 54(1), 77–95.

Renaldo, N., Sudarno, S., and Hutahuruk, M. B. 2020. Well-Being in Pekanbaru. Journal of Management and Entrepreneurship, 22(2), 142–151.

Renstra Dinas Kumperindag Provinsi Gorontalo 2023-2026. https://e-ppid.gorontaloprov.go.id/front/dokumen/download/500316831

Ricciardi, V. and Simon, K. H. 2000. What is Behavioral Finance?. Business, Education and Technology Journal. 2(2), pp. 1-9.

Sabri, M. F., Othman, M. A., Masud, J., Paim, L., MacDonald, M., and Hira, T. K. 2008. Financial behavior and problems among college students in Malaysia: Research and educational implications. Consumer Interest Annual, 54, 166–170

Shefrin, H. 2009. Behavioralizing finance. In Foundations and Trends in Finance, 4(1–2).

Singh, D., Barreda, A. A., and Singh, N. 2019. The Mediating Effect of Financial Self-Efficacy on The Financial Literacy-Behavior: Generation Y. The Economics and Finance Letters, 6(2), 120–133.

Sudarmawanti, E., Mar’ati, F. S. and Ningrum, D. K. 2024. Financial Management Behavior with Locus of Control as an Intervening Variable: Impact of of Financial Knowledge and Income Level. Ekonomis: Journal of Economics and Business, 8(2), pp. 1509-1517.

Tang, N. and Baker, A. 2016. Self-esteem, Financial Knowledge and Financial Behavior. Journal of Economic Psychology, 54, pp. 164-176..

Widyakto, A., Lina, Z., Wahyu, and Rinawati, T. 2022. The Influence of Financial Literacy, Financial Attitudes, and Lifestyle on Financial Behavior. Diponegoro International Journal of Business, 5(1), pp. 33-46.

Wiranti, Y., Goso, G., and Halim, M. 2023. The Influence of Financial Literacy, Lifestyle, and Social Environment on Student Financial Behavior. Economic, Accounting, Management and Business, 6(4).

Yap, R. J. C., Komalasari, F., and Hadiansah, I. 2016. The Effect of Financial Literacy and Attitude on Financial Management Behavior and Satisfaction. International Journal of Administrative Science & Organization, 23(3), 140–146.

Yulianti, N. and Silvy, M. 2013. Financial Management Attitudes and Family Investment Planning Behavior in Surabaya. Journal of Business and Banking, 3(1).




DOI: http://dx.doi.org/10.21776/ub.jam.2024.022.03.20

Refbacks

  • There are currently no refbacks.