Does Capital Assistance and Financial Literacy Have an Impact on the Business Sustainability of MSMEs in Kediri City?
Abstract
Introduction/Main Objectives: Economic development in Kediri cannot be separated from the country's micro, small, and medium enterprises (MSMEs). Kediri MSMEs are promising businesses to develop because they can support economic development at the micro and macro levels. Background Problems: The problem MSME actors face in Kediri city is the lack of capital in their businesses. There is a gap in several studies because no one has directly examined the impact of capital assistance on three groups that receive capital assistance in Kediri City, namely the first is cigarette factory workers who have a business, the second is cigarette factory workers who have a business, and the third is entrepreneurs in the industrial and trade sectors. Novelty: Theoretical model of research on capital assistance and financial literacy on the sustainability of SMEs in the city of Kediri. Research Methods: The research approach used is a quantitative approach. The sampling technique used was a combination of stratified random sampling from Mojoroto sub-district, Kota sub-district, and Pesantren sub-district. Primary data collection was carried out on 100 respondents who received capital assistance in the city of Kediri. Finding/Results: Capital assistance has a significant effect on business sustainability. Financial literacy has a positive and significant effect on business sustainability. Capital assistance and financial literacy together have a positive and significant effect on business sustainability. Research limitation/implications: This study provides an overview that Kediri City MSME business actors who receive capital assistance , namely first, cigarette factory workers who have businesses, second, cigarette factory workers who have businesses, and third, entrepreneurs in the industrial and trade sectors can use capital assistance wisely supported by financial literacy obtained from financial management training provided by the government or the existing MSME community.
References
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Meressa, H. A. (2023). Entrepreneurial financial literacy-small business sustainability nexus in Ethiopia. Cogent Business & Management, 10(2), 2218193.
Muraga, K. P., & John, N. (2015). Effects of financial literacy on performance of youth led entreprises: a case of equity group foundation training program in Kiambu county. International Journal of Social Sciences Management and Entrepreneurship, 2(1), 218–231.
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Arum, R. A. (2021). The role of financial literacy for Business Sustainability at PT Olam Makassar. International Journal of Educational Research & Social Sciences, 2(3), 604–609. https://doi.org/https://doi.org/10.51601/ijersc.v2i3.89
Aryani, S., Wiryono, S. K., Koesrindartoto, D. P., & Anggahegari, P. (2020). Global competition strategies for Indonesian SMEs. International Journal of Entrepreneurial Venturing, 12(4), 395–419. https://doi.org/10.1504/IJEV.2020.109592
Babajide, A., Osabuohien, E., Tunji-Olayeni, P., Falola, H., Amodu, L., Olokoyo, F., Adegboye, F., & Ehikioya, B. (2023). Financial literacy, financial capabilities, and sustainable business model practice among small business owners in Nigeria. Journal of Sustainable Finance & Investment, 13(4), 1670–1692.
Beccacece, F. (2024). Multivariate risk attitude: a comparison of alternative approaches in sustainability policies. Decisions in Economics and Finance. https://doi.org/10.1007/s10203-024-00441-5
Cariola, A., Fasano, F., La Rocca, M., & Skatova, E. (2020). Environmental sustainability policies and the value of debt in EU SMEs: Empirical evidence from the energy sector. Journal of Cleaner Production, 275, 1–11. https://doi.org/10.1016/j.jclepro.2020.123133
Dahlima, D., Hariyanto, D., & Safitri, H. (2024). The Influence of Financial Literacy, Locus of Control, Government Support and Access to Capital on Financial Behavior in Business Sustainability in MSMEs in Sambas Regency. Journal of Asian Multicultural Research for Economy and Management Study, 5(2), 68–78.
Garbie, I. H. (2014). An analytical technique to model and assess sustainable development index in manufacturing enterprises. International Journal of Production Research, 52(16), 4876–4915. https://doi.org/10.1080/00207543.2014.893066
GarcÃa-Pérez-de-Lema, D., Ruiz-Palomo, D., & Diéguez-Soto, J. (2021). Analysing the roles of CEO’s financial literacy and financial constraints on Spanish SMEs technological innovation. Technology in Society, 64(July 2020), 1–12. https://doi.org/10.1016/j.techsoc.2020.101519
Hamida, R. N., Diana, N., & Junaidi, J. (2023). Pengaruh Literasi Keuangan, Akses Permodalan, dan Minat Menggunakan E-Commerce Terhadap Kinerja UMKM (Studi Kasus pada Pelaku UMKM di Kota Kediri). E_Jurnal Ilmiah Riset Akuntansi, 12(02), 181–188.
Hossain, M. M. (2020). Financial resources, financial literacy and small firm growth: Does private organizations support matter? Journal of Small Business Strategy, 30(2), 35–58. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85085887099&partnerID=40&md5=82a148dd8dacad53a725a6dec2a3874d
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, 1–26. https://doi.org/10.1080/08276331.2020.1793097
Hudson, M., Smart, A., & Bourne, M. (2001). Theory and practice in SME performance measurement systems. International Journal of Operations and Production Management, 21(8), 1096–1115. https://doi.org/10.1108/EUM0000000005587
Idris, A., Hanafi, M. M., Rahmawati, A., & Surwanti, A. (2023). Impact of Intellectual Capital and Risk Attitude Through Financial Literacy on Business Sustainability in Indonesia Batik Smes. ECONOMICS - Innovative and Economics Research Journal, 11(2), 113–136. https://doi.org/10.2478/eoik-2023-0052
Jati, H., De Rosary, P. E., Fanggidae, A. H. J., & Makatita, R. F. (2021). The importance of financial literacy and technological literacy for the sustainability of the culinary business in Kota Kupang during the COVID-19 pandemic. International Journal of Economics, Business and Management Research, 5(01), 15–41.
Kandpal, V., Chandra, D., Dalei, N. N., & Handoo, J. (2023). Financial Literacy for Promoting Sustainability. In Financial Inclusion in Circular Economy: A Bumpy Road Towards Sustainable Development (pp. 79–89). Springer.
Krechovská, M. (2015). Financial literacy as a path to sustainability.
Kulathunga, K. M. M. C. B., Ye, J., Sharma, S., & Weerathunga, P. R. (2020). How does technological and financial literacy influence SME performance: Mediating role of ERM practices. Information (Switzerland), 11(6), 1–20. https://doi.org/10.3390/INFO11060297
Liani, H. H. A., & Prawihatmi, C. Y. (2017). Dampak Pinjaman Dan Bantuan Modal Kerja Terhadap Kinerja Usaha Studi Kasus UMKM Binaan KADIN Jawa Tengah. Jurnal Riset Ekonomi Dan Bisnis, 10(3), 189. https://doi.org/10.26623/jreb.v10i3.789
Lontchi, C. B., Yang, B., & Su, Y. (2022). The mediating effect of financial literacy and the moderating role of social capital in the relationship between financial inclusion and sustainable development in Cameroon. Sustainability, 14(22), 15093.
Luo, W., & Cheng, J. (2023). Transition to sustainable business models for green economic recovery: role of financial literacy, innovation and environmental sustainability. Economic Change and Restructuring, 56(6), 3787–3810.
Meressa, H. A. (2023). Entrepreneurial financial literacy-small business sustainability nexus in Ethiopia. Cogent Business & Management, 10(2), 2218193.
Muraga, K. P., & John, N. (2015). Effects of financial literacy on performance of youth led entreprises: a case of equity group foundation training program in Kiambu county. International Journal of Social Sciences Management and Entrepreneurship, 2(1), 218–231.
Muslimat, A., Wahid, H. A., Erlangga, H., Sarwani, S., Purwanto, A., & Sunarsi, D. (2020). The Effect of Organizational Commitment on Organizational Performance of Indonesian Industries. PalArch’s Journal of Archaeology of Egypt/ Egyptology, 17(6), 8330–8347. https://doi.org/10.12816/0006508
Natasya, V., & Hardiningsih, P. (2021). Kebijakan Pemerintah Sebagai Solusi Meningkatkan Pengembangan UMKM di Masa Pandemi. Ekonomis: Journal of Economics and Business, 5(1), 141–148. https://doi.org/10.33087/ekonomis.v5i1.317
Paraboni, A. L., Soares, F. M., Potrich, A. C. G., & Vieira, K. M. (2020). Does formal and business education expand the levels of financial education? International Journal of Social Economics, 47(6), 769–785. https://doi.org/10.1108/IJSE-09-2019-0596
Prakoso, M. A., & Arum, K. (2023). Pengaruh Bantuan Modal dan Pendampingan terhadap Peningkatan Pendapatan Usaha Mikro Kecil dan Menengah (UMKM) di Kecamatan Kasihan , Kabupaten Bantul The Effect of Capital Assistance and Mentoring on Increasing the Income of Micro , Small and Medium Enter. Ebbank, 13(2), 111–122.
Prasetyo, C., Firdaus, M. A., & Karman, A. (2023). Pengaruh Pinjaman Modal Usaha Dan Pendampingan Usaha Terhadap Pendapatan Umkm. SOSEBI Jurnal Penelitian Mahasiswa Ilmu Sosial Ekonomi Dan Bisnis Islam, 3(2), 151–165. https://doi.org/10.21274/sosebi.v3i2.8537
Rahim, S., & 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. https://doi.org/https://doi.org/10.33736/ijbs.3333.2020
Resmi, S., Pahlevi, R. W., & Sayekti, F. (2020). The growth of creative micro, small, and medium enterprises (Msmes) business in special region of yogyakarta before and after covid-19 pandemic. International Journal of Entrepreneurship, 24(4), 1–8.
Rosyadah, K., Mus, A. R., Semmaila, B., & Chalid, L. (2022). The Relevance of Working Capital, Financial Literacy and Financial Inclusion on Financial Performance and Sustainability of Micro, Small and Medium-Sized Enterprises (MSMEs). American Journal of Humanities and Social Sciences Research (AJHSSR), 4, 203–216.
Sohilauw, M. ., & Nohong, M. (2020). The relationship between financial literacy, rational financing decision, and financial performance: An empirical study of small and medium enterprises in makassar. Jurnal Pengurusan, 59, 89–102. https://doi.org/10.17576/pengurusan-2020-59-09
Sumastuti, E., Harahap, S., & Sianipar, G. (2024). Exploring The Impact Of Green Finance, Financial Literacy, And Social Capital On The Performance And Financial Sustainability Of Indonesian MSMEs. Journal of Economic, Bussines and Accounting (COSTING), 7(4), 10869–10886.
Susilawati, E., & Puryandani, S. (2020). Pengaruh literasi keuangan terhadap keputusan struktur modal UMKM dengan inklusi keuangan sebagai variabel pemoderasi. Majalah Ilmiah Solusi, 18(2), 41–70.
Ulfah, M., Anwar, A. M. A. W. K., & Widiya, W. (2022). Pengaruh Bantuan Dana UMKM Terhadap Peningkatan Pendapatan UMKM. Hawalah: Kajian Ilmu Ekonomi Syariah, 1(2), 74–82.
Ullah, F., Degong, M., Anwar, M., Hussain, S., & Ullah, R. (2021). Supportive tactics for innovative and sustainability performance in emerging SMEs. Financial Innovation, 7, 1–31. https://doi.org/10.1186/s40854-021-00284-8
Utomo, S. B., Pujowati, Y., & Utami, E. Y. (2024). Analisis Kebijakan Pemerintah, Bantuan Modal, dan Pelatihan Kewirausahaan Terhadap Pertumbuhan Bisnis pada Komunitas UMKM di Jawa Timur. Jurnal Ekonomi Dan Kewirausahaan West Science, 2(02), 146–156. https://doi.org/10.58812/jekws.v2i02.1110
Widoyoko, E. P. (2020). Teknik penyusunan instrumen penelitian. Yogyakarta: Pustaka Pelajar.
Yang, S. J., & Jang, S. (2020). How does corporate sustainability increase financial performance for small-and medium-sized fashion companies: Roles of organizational values and business model innovation. Sustainability (Switzerland), 12(24), 1–21. https://doi.org/10.3390/su122410322
You, T., & You, Y. (2020). The Effect of Entrepreneurship on the Sustainability of Social Small and Medium Enterprises ( SMEs ) - Between the Mediating Effects of Government Support Policy in Korea. Research in World Economy, 11(2), 112–121. https://doi.org/10.5430/rwe.v11n2p112
Zvarikova, K., Dvorsky, J., Belas, J., & Metzker, Z. (2024). MODEL OF SUSTAINABILITY OF SMEs IN V4 COUNTRIES. Journal of Business Economics and Management, 25(2), 226–245. https://doi.org/10.3846/jbem.2024.20729
Published
2025-04-01
How to Cite
SRIKALIMAH, Srikalimah; MUNIR, Miftahul.
Does Capital Assistance and Financial Literacy Have an Impact on the Business Sustainability of MSMEs in Kediri City?.
Jurnal Cendekia Keuangan, [S.l.], v. 4, n. 1, p. 11-24, apr. 2025.
ISSN 2810-0964.
Available at: <https://ejournal.uniska-kediri.ac.id/index.php/JCK/article/view/6136>. Date accessed: 21 dec. 2024.
doi: https://doi.org/10.32503/jck.v4i1.6136.
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