The Influence of Financial Literacy and Financial Management on the Financial Performance of MSMEs
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Abstract
This study aims to analyze the influence of financial literacy and financial management on the financial performance of Micro, Small, and Medium Enterprises (MSMEs). MSMEs play a strategic role in the national economy, but still face various financial management challenges that affect their low business performance. The research method used is a quantitative approach with survey techniques. Data was collected through questionnaires distributed to MSME actors and analyzed using multiple linear regression. The study finds that financial literacy has a positive and significant effect on the financial performance of MSMEs. In addition, financial management has been shown to have a positive, significant effect on financial performance. Simultaneously, financial literacy and financial management have a significant effect on the financial performance of MSMEs. These findings indicate that improving understanding and adopting good financial management practices are essential to enhancing MSME performance in a sustainable manner
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How to Cite
Nabas, M. J., Aminah, A., Fausiah, F., Cinta, A. H., & Paramitha, A. N. (2026). The Influence of Financial Literacy and Financial Management on the Financial Performance of MSMEs . ProBisnis : Jurnal Manajemen, 17(1), 359–367. Retrieved from https://ejournal.joninstitute.org/index.php/ProBisnis/article/view/1408
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Battiston, S., Monasterolo, I., Riahi, K., & van Ruijven, B. J. (2021). Accounting for finance is key to climate mitigation pathways. Science, 372(6545), 918–920. https://doi.org/10.1126/science.abf3877
Boubaker, S., Le, T. D. Q., Ngo, T., & Manita, R. (2025). Predicting the performance of MSMEs: a hybrid DEA-machine learning approach. Annals of Operations Research, 350(2), 555–577. https://doi.org/10.1007/s10479-023-05230-8
Burchi, A., Włodarczyk, B., Szturo, M., & Martelli, D. (2021). The Effects of Financial Literacy on Sustainable Entrepreneurship. Sustainability, 13(9), 5070. https://doi.org/10.3390/su13095070
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Muñoz-Céspedes, E., Ibar-Alonso, R., & Cuerdo-Mir, M. (2024). Individual entrepreneurial behavior and financial literacy. International Entrepreneurship and Management Journal, 20(3), 2263–2285. https://doi.org/10.1007/s11365-023-00936-4
Okoro, C., & Ayaba, M. M. (2023). Research Trends and Directions on Real Estate Investment Trusts' Performance Risks. Sustainability, 15(6), 5436. https://doi.org/10.3390/su15065436
Riwanto, A., Suryaningsih, S., & Putri, D. K. (2023). Reform and Breakthrough in Business Regulations for Empowering MSMEs in Indonesia and the Netherlands. Journal of Human Rights, Culture and Legal System, 3(3), 513–540. https://doi.org/10.53955/jhcls.v3i3.109
Srisusilawati, P., Malik, Z. A., Silviany, I. Y., & Eprianti, N. (2022). The roles of self-efficacy and Sharia financial literacy to SMES performance: business model as intermediate variable. F1000Research, 10, 1310. https://doi.org/10.12688/f1000research.76001.2
Sun, J., & Zhang, J. (2024). Digital Financial Inclusion and Innovation of MSMEs. Sustainability, 16(4), 1404. https://doi.org/10.3390/su16041404
Valle, L., Costan, E., Costan, F., General, E., Alcantara, G., Kilat, R. V., Batican, I., Olivar, G. M., & Avila, D. (2022). Community extension of MSMEs' entrepreneurial activities in relation to poverty reduction. Frontiers in Sociology, 7. https://doi.org/10.3389/fsoc.2022.1038006
Vásquez, J., Aguirre, S., Puertas, E., Bruno, G., Priarone, P. C., & Settineri, L. (2021). A sustainability maturity model for micro, small, and medium-sized enterprises (MSMEs) based on a data analytics evaluation approach. Journal of Cleaner Production, 311, 127692. https://doi.org/10.1016/j.jclepro.2021.127692
Wube, M. C., & Atwal, H. (2024). Supply chain management of micro, small, and medium enterprises (MSMEs) in Africa: a bibliometric analysis. Journal of Innovation and Entrepreneurship, 13(1), 39. https://doi.org/10.1186/s13731-024-00388-2
Ayalu, G., Abbay, A. G., & Azadi, H. (2023). The role of micro- and small-scale enterprises in enhancing sustainable community livelihood: Tigray, Ethiopia. Environment, Development and Sustainability, 25(8), 7561–7584. https://doi.org/10.1007/s10668-022-02359-7
Bahasoan, A. N., Qamariah, N., Wahdaniah, & B I. (2025). Buy Now, Pay Later Culture: Economic Analysis of the PayLater Phenomenon Among Gen Z. International Journal of Finance and Business Management, 3(3), 207–220. https://doi.org/10.59890/ijfbm.v3i3.55
Battiston, S., Monasterolo, I., Riahi, K., & van Ruijven, B. J. (2021). Accounting for finance is key to climate mitigation pathways. Science, 372(6545), 918–920. https://doi.org/10.1126/science.abf3877
Boubaker, S., Le, T. D. Q., Ngo, T., & Manita, R. (2025). Predicting the performance of MSMEs: a hybrid DEA-machine learning approach. Annals of Operations Research, 350(2), 555–577. https://doi.org/10.1007/s10479-023-05230-8
Burchi, A., Włodarczyk, B., Szturo, M., & Martelli, D. (2021). The Effects of Financial Literacy on Sustainable Entrepreneurship. Sustainability, 13(9), 5070. https://doi.org/10.3390/su13095070
Charfeddine, L., Umlai, M. I., & El-Masri, M. (2024). Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: evidence from Qatari MSME importers. Financial Innovation, 10(1), 15. https://doi.org/10.1186/s40854-023-00557-4
Dela Cruz, N. A., Villanueva, A. C. B., Tolin, L. A., Disse, S., Lensink, R., & White, H. (2023). PROTOCOL: Effects of interventions to improve access to financial services for micro‐, small‐ and medium‐sized enterprises in low‐ and middle‐income countries: An evidence and gap map. Campbell Systematic Reviews, 19(3). https://doi.org/10.1002/cl2.1341
Dewi, N. G., Ridhasyah, R., & Wibawa, T. A. (2023). Financial Access and MSMEs Performance during the COVID-19 Pandemic: The Moderating Role of Digitization. Journal of Developing Economies, 8(1), 144–152. https://doi.org/10.20473/jde.v8i1.36843
Endris, E., & Kassegn, A. (2022). The role of micro, small, and medium enterprises (MSMEs) in the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship, 11(1), 20. https://doi.org/10.1186/s13731-022-00221-8
Khattak, B. H. A., Shafi, I., Khan, A. S., Flores, E. S., Lara, R. G., Samad, M. A., & Ashraf, I. (2023). A Systematic Survey of AI Models in Financial Market Forecasting for Profitability Analysis. IEEE Access, 11, 125359–125380. https://doi.org/10.1109/ACCESS.2023.3330156
LAHIRI, I., & BANERJEE, M. (2019). DEVELOPMENT OF SUSTAINABLE BRANDS IN THE MICRO, SMALL, AND MEDIUM ENTERPRISE (MSME) SECTOR IN INDIA. JOURNAL OF MANAGEMENT, 6(2). https://doi.org/10.34218/JOM.6.2.2019.026
Li, L.-Y., Syah, A. M., Syukur, M., Limkanchanapa, R., & Srisurat, C. (2023). Sustainable Micro, Small, and Medium Enterprises: A Developed Model of Entrepreneurial Marketing Behaviors for Thailand's MSMEs. Sustainability, 15(17), 13135. https://doi.org/10.3390/su151713135
Muhammad, D., Ahmed, I., Naveed, K., & Bendechache, M. (2024). An explainable deep learning approach for stock market trend prediction. Heliyon, 10(21), e40095. https://doi.org/10.1016/j.heliyon.2024.e40095
Mujiatun, S., Trianto, B., Cahyono, E. F., & Rahmayati. (2023). The Impact of Marketing Communication and Islamic Financial Literacy on Islamic Financial Inclusion and MSMEs Performance: Evidence from Halal Tourism in Indonesia. Sustainability, 15(13), 9868. https://doi.org/10.3390/su15139868
Muñoz-Céspedes, E., Ibar-Alonso, R., & Cuerdo-Mir, M. (2024). Individual entrepreneurial behavior and financial literacy. International Entrepreneurship and Management Journal, 20(3), 2263–2285. https://doi.org/10.1007/s11365-023-00936-4
Okoro, C., & Ayaba, M. M. (2023). Research Trends and Directions on Real Estate Investment Trusts' Performance Risks. Sustainability, 15(6), 5436. https://doi.org/10.3390/su15065436
Riwanto, A., Suryaningsih, S., & Putri, D. K. (2023). Reform and Breakthrough in Business Regulations for Empowering MSMEs in Indonesia and the Netherlands. Journal of Human Rights, Culture and Legal System, 3(3), 513–540. https://doi.org/10.53955/jhcls.v3i3.109
Srisusilawati, P., Malik, Z. A., Silviany, I. Y., & Eprianti, N. (2022). The roles of self-efficacy and Sharia financial literacy to SMES performance: business model as intermediate variable. F1000Research, 10, 1310. https://doi.org/10.12688/f1000research.76001.2
Sun, J., & Zhang, J. (2024). Digital Financial Inclusion and Innovation of MSMEs. Sustainability, 16(4), 1404. https://doi.org/10.3390/su16041404
Valle, L., Costan, E., Costan, F., General, E., Alcantara, G., Kilat, R. V., Batican, I., Olivar, G. M., & Avila, D. (2022). Community extension of MSMEs' entrepreneurial activities in relation to poverty reduction. Frontiers in Sociology, 7. https://doi.org/10.3389/fsoc.2022.1038006
Vásquez, J., Aguirre, S., Puertas, E., Bruno, G., Priarone, P. C., & Settineri, L. (2021). A sustainability maturity model for micro, small, and medium-sized enterprises (MSMEs) based on a data analytics evaluation approach. Journal of Cleaner Production, 311, 127692. https://doi.org/10.1016/j.jclepro.2021.127692
Wube, M. C., & Atwal, H. (2024). Supply chain management of micro, small, and medium enterprises (MSMEs) in Africa: a bibliometric analysis. Journal of Innovation and Entrepreneurship, 13(1), 39. https://doi.org/10.1186/s13731-024-00388-2