Accounting and bussiness Journal
THE EFFECT OF FINANCIAL LITERACY AND INCLUSION FINANCE
ON MSME PERFORMANCE (CASE STUDY ON MSMEs
MEDAN DISTRICTSANDPAPER)
Warsani Purnama Sari .
Ahmad Prayudi .
Mawaddah Ramadani & Teddi Pribadi 1,2,3&.
Program Studi Akuntansi.
Fakultas Ekonomi dan Bisnis.
Universitas Medan Area.
Medan mawaddahrmd@gmail.
Abstract The study purpose to analyze the influence of financial literacy and financial inclusion on the performance of MSMEs in Medan Amplas District, both partially and simultaneously.
The type of research used in this research is quantitative research using an associative approach.
The population and sample in this research were 107 MSMEs in Medan Amplas District.
The type of data used in this research is quantitative data.
The data source used in this research is primary The data collection method used in this research is a questionnaire.
The data analysis method used is multiple linear regression analysis using the SPSS (Statistical Program For Social Scienc.
technique version 17.
The research results show that partially and simultaneously financial literacy and financial inclusion have a positive and significant effect on the performance of MSMEs in Medan Amplas District.
Keywords: Financial Literacy.
Financial Inclusion and micro small and Medium Enterprises Performance.
INTRODUCTION
Financial literacy and financial inclusion are two crucial concepts in the world of MSMEs (Micro.
Small, and Medium Enterprise.
Financial literacy refers to the knowledge, skills, and confidence that affect attitudes and behaviors to improve decision-making and financial management for achieving well-being.
It encompasses the understanding, skills, and beliefs that influence attitudes and behaviors to enhance the quality of decision-making and financial management with the aim of achieving well-being (Akhiar, 2.
Meanwhile, financial inclusion refers to the access that individuals have to financial services, such as banking, insurance, financing, pension programs, and investments.
The level of financial literacy in Indonesia remains low, although it has been steadily improving year by year.
Low financial literacy has the potential to cause costly losses in the future and reduce quality of life due to a series of financial issues (Akhiar, 2.
Financial literacy is an essential skill that individuals need to make and manage sound financial decisions, ranging from choices about saving, investing, applying for loans, and more.
The level of financial inclusion in Indonesia is also still far below the level of financial literacy (OJK, 2.
The government and the Financial Services Authority (OJK) are actively working to enhance both financial literacy and inclusion through various initiatives, such as the National Strategy for Financial Literacy Indonesia (SNLKI).
The gap between financial literacy and financial inclusion in Indonesia has decreased over the years, but continuous efforts are needed to further narrow this Accounting and bussiness Journal Table 1.
Number of MSMEs in Medan Amplas Subdistrict Business Type Year Retail Fashion Services Agribusiness Number of MSME Actors Craft Culinary Manufacturing TOTAL Source: Dinas Koperasi.
Usaha Kecil.
Menengah.
Perindustrian, dan perdagangan Kota Medan.
THEORETICAL FOUNDATION
Rational Choice Theory Rational Choice Theory is a framework for understanding the decision-making process, applicable at both micro and macro levels (Afriana and Riza, 2.
According to Putri and Widodo .
, at the micro level, decision-makers are individuals who make rational choices aimed at achieving goals that can be considered optimal based on various knowledge, information, and cognitive data.
This theory can be related to Keynes' consumption theory .
, which posits that individuals with higher incomes tend to save a larger proportion of their income compared to those with lower incomes.
Both Rational Choice Theory and Keynes' consumption theory suggest that an individual's decision to save is influenced by income, financial literacy, and information about saving products.
MSME Performance MSME performance refers to the output achieved by an individual through their tasks within a company during a specific period, which is related to the company's performance standards or Performance is essentially the attainment of goals by an individual or company within a given objective (Aribawa, 2.
Financial Literacy The National Strategy for Financial Literacy Indonesia (SNLKI) .
defines financial literacy as the knowledge and understanding of financial concepts and risks, including the skills, motivation, and confidence to apply this knowledge to make effective decisions, enhance individual and community financial well-being, and participate in economic activities.
Without Accounting and bussiness Journal adequate financial literacy, individuals may struggle to select appropriate savings or investment products and could be at risk of financial fraud.
Financial Inclusion Financial inclusion is a condition where all individuals can access quality financial services, at relatively affordable prices, and with convenient and satisfactory methods (Gradeva et al.
, 2.
RESEARCH METHODOLOGY
This study will use a quantitative research approach with an associative approach.
Quantitative research involves obtaining data in numerical form for statistical analysis.
Associative research aims to determine the influence or relationship between two or more variables (Sugiyono, 2.
This type of research is considered to have a higher level of sophistication compared to descriptive and comparative research, as it allows for the development of theories that can explain, predict, and control phenomena.
RESULTS AND DISCUSSION
Results of Classical Assumption Tests Normality Test Figure 1.
Graphical Method: P-P Plot The test results show that the points in the regression model are evenly distributed and closely aligned along the diagonal line of the y-axis.
Therefore, it can be concluded that the regression model exhibits a normal distribution.
Dependent Variable: TOTAL_Y Frequency Mean =-1.
27E-15
Std.
Dev.
=0.
N =107
Regression Standardized Residual Figure 2.
Histogram Graphical Method A histogram is considered normal if the data distribution forms a bell shape, without skewing to the left or right (Santoso, 2015: .
The histogram in the image Accounting and bussiness Journal above forms a bell shape and does not skew to either side, thus it is considered to be normally distributed.
Metode Kolmogorov Smirnov Test Tabel 2.
Hasil Uji Kolmogorov-Smirnov Test Unstandardiz ed Residual Normal Parameters Most Extreme Differences Mean Std.
Deviation Absolute Positive Negative ,0000000 2,89549469 ,079 ,079 -,057 ,821 ,510 Kolmogorov-Smirnov Z Asymp.
Sig.
-taile.
Test distribution is Normal.
Calculated from data.
The test results show that the Kolmogorov-Smirnov test has a significance value (Asymp.
Sig.
2-taile.
Since the significance value of 0.
510 is greater than the threshold of 0.
05, it can be concluded that the residuals are normally distributed and meet the normality assumption.
Multicollinearity Test Table 3.
Model Collinearity Statistics Model Collinearity Statistics Tolerance VIF (Constan.
Total_X1 ,744 1,344 Total_X2 ,744 1,344 The results indicate that for the variables financial literacy and financial inclusion, the tolerance value is 0.
744 (> 0.
and the VIF value is 1.
344 (< .
Therefore, it can be concluded that there is no multicollinearity in the regression model, meaning that there is no correlation between the independent variables.
Heteroscedasticity Test Accounting and bussiness Journal Figure 3.
Scatterplot Graph Method The scatterplot graph for heteroscedasticity testing, as shown in the image above, indicates that the points in the regression model are unevenly distributed and do not form a regular pattern.
Thus, it can be concluded that the regression model does not exhibit signs of heteroscedasticity.
Glejzer Method Coefficientsa Model Unstandardized Coefficients Standardized Coefficients (Constan.
-2,771 Std.
Error
1,531
Total_X1 ,114 ,037 Sig.
Beta
,328
-1,810
,073
3,067
,592
Total_X2 ,011 ,044 ,028 ,260 ,795 Dependent Variable: Abs_Res Variables financial literacy .
ignificance value = 0.
and financial inclusion .
ignificance value = 0.
, both values are greater than 0.
Therefore, it can be concluded that the regression model does not exhibit signs of heteroscedasticity, meaning that there are no disruptive variables in this study.
Table 5.
Reliability Test Variable Financial Literacy (X.
Financial Inclusion (X.
SME Performance (Y) CroncbachAos Alpha N of Items 0,929 0,912 0,929 Standard Coefficient Keterangan Reliable 0,60 Reliable Reliable For the variables of Financial Literacy.
Financial Inclusion, and SME Performance, the CronbachAos Alpha values are all greater than 0.
Therefore, the regression model can be Accounting and bussiness Journal concluded to be reliable .
This means that most respondents in this study provided relatively stable and consistent answers across different questionnaires.
Table 6.
Financial Literacy Validity Test Variable Item Kuesioner Financial Literacy (X.
X1.
X1.
X1.
X1.
X1.
X1.
X1.
X1.
X1.
X1.
Pearson Correlation .
0,737 0,701 0,719 0,712 0,820 0,830 0,849 0,860 0,823 0,761
r tabel Keterangan 0,190 Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid The sample size in this study is n = 107, so r table = 0.
190 for a one-tailed test at 0.
significance level.
Table 4.
9 shows that all questionnaire items for the Financial Literacy variable (X.
with 10 statements have a coefficient of r calculated > r table .
This means that most respondents, namely SMEs, strongly agree that a good understanding of financial literacy leads to better SME performance.
Table 7.
Financial Inclusion Validity Test Variable Item Kuesioner Financial Inclusion (X.
X2.
X2.
X2.
X2.
X2.
X2.
X2.
X2.
X2.
Pearson Correlation .
0,707 0,782 0,838 0,722 0,735 0,773 0,773 0,791 0,805 Keterangan 0,190 Valid Valid Valid Valid Valid Valid Valid Valid Valid The sample size in this study is n = 107, so r table = 0.
190 for a one-tailed test at 0.
significance level.
Table 4.
10 shows that all questionnaire items for the Financial Inclusion variable (X.
with 9 statements have a coefficient of r calculated > r table Accounting and bussiness Journal .
This means that most respondents, namely SMEs, strongly agree that a good understanding of financial inclusion leads to better SME performance.
Table 8.
SME Performance Validity Test Variable Item Kuesioner SME Performance (Y) Pearson Correlation .
0,826 0,796 0,810 0,832 0,854 0,815 0,820 0,796 r tabel Keterangan 0,1900 Valid Valid Valid Valid Valid Valid Valid Valid All questionnaire items for the SME Performance variable (Y) with 8 items have a coefficient of r calculated > r table .
, thus all items are considered valid.
This indicates that to achieve good SME performance, a solid understanding of financial literacy and financial inclusion is needed, enabling SMEs to make informed financial Table 9.
Multiple Linear Regression Analysis Model Unstandardized Coefficients Standardized Coefficients Std.
Error (Constan.
4,252 2,531 Total_X1 Total_X2 ,544 ,329 ,061 ,072 Sig.
Beta
,669
,335
1,680
,096
8,853
3,785
,000
,007
he multiple linear regression equation can be presented as:
Y = 4,252 0,544 X1 0,329 e The interpretation of the multiple linear regression equation is as follows:
The constant value of 4.
252 is positive, indicating that it can increase SME performance by 4.
252 units assuming the coefficients of financial literacy and financial inclusion remain constant .
The financial literacy variable has a regression coefficient of 0.
544, indicating that a one-point increase in financial literacy can improve SME performance by 0.
544 units.
The financial inclusion variable has a regression coefficient of 0.
329, indicating that a one-point increase in financial inclusion can increase business income by 0.
Accounting and bussiness Journal Partial Test .
-tes.
The results of the partial test between independent variables .
inancial literacy and financial inclusio.
and the dependent variable (SME Performanc.
are presented in the table below:
Table 10.
T-Test Model (Constan.
Total_X1 Total_X2 Unstandardized Standardized Coefficients Coefficients Std.
Error
Beta
4,252
2,531
,544
,061
,669
,329
,072
,335
Sig.
1,680
8,853
3,785
,096
,000
,007
In this study, the sample size is n = 107.
The t-table value can be found in the statistical table at a significance level of 0.
05/2 .
wo-tailed tes.
with df = n-k-1 or 107-2-1 = 104 .
is the number of independent variable.
The obtained t-table coefficient value is 1.
at a significance level of 0.
The results of the partial tests are as follows:
Financial literacy has a positive and significant effect on SME performance in Medan Amplas District .
calculated > t table, 8.
853 > 1.
984 at sig.
000 < 0.
, so the null hypothesis H0 is rejected and H1 is accepted.
Financial inclusion has a positive and significant effect on SME performance in Medan Amplas District .
calculated > t table, 3.
785 > 1.
984 at sig.
007 < 0.
, so the null hypothesis H0 is rejected and H2 is accepted.
Based on the above results, both independent variables have a partial effect on SME performance in Medan Amplas District.
Simultaneous Test (F-tes.
Table 11.
F-Test
Model
Sum of Squares Regression Residual 1120,504 888,692 Total
2009,196
Mean Square 560,252 8,545 Sig.
65,564
,000b Dependent Variable: Total_Y Predictors: (Constan.
Total_X2.
Total_X1 The sample size for this study is n = 107, where the f-table value for .
= .
= .
is Ftabel = 3.
08 at a significance level of 0.
The calculated F value is 564 at a significance level of 0.
Therefore, it can be concluded that financial literacy and financial inclusion simultaneously have a significant effect on SME Accounting and bussiness Journal performance in Medan Amplas District (F calculated > F table, 65.
564 > 3.
08 at sig.
< 0.
, so the null hypothesis H0 is rejected and H3 is accepted.
Coefficient of Determination (RA) Table 12.
Coefficient of Determination Test Mode ,747a R Square Adjusted R Square Std.
Error of the Estimate ,558 ,549 2,923 Predictors: (Constan.
Total_X2.
Total_X1 Dependent Variable: Total_Y The coefficient of determination (RA) value is R Square = 0.
558 or 55.
8%, which means there is a strong correlation between financial literacy and financial inclusion on SME performance in Medan Amplas District.
This indicates that financial literacy and financial inclusion account for 55.
8% of the variation in SME performance in Medan Amplas District.
In other words.
SME performance can be influenced by financial literacy and financial inclusion by 55.
8%, while the remaining 44.
2% is affected by other variables not studied.
CONCLUSION AND RECOMMENDATIONS
This study aims to provide an analysis of the effects of independent variables, namely financial literacy and financial inclusion, on SME performance as the dependent variable in Medan Amplas District.
After collecting and processing the data, the conclusions are as follows:
Financial literacy has a positive and significant effect on SME performance in Medan Amplas District.
This means that the better the understanding of financial literacy by SME actors, the better the performance of the SMEs.
Financial inclusion has a positive and significant effect on SME performance in Medan Amplas District.
This means that improved financial inclusion by SME actors in Medan Amplas District, such as through innovative practices, enhances the performance of SMEs.
REFERENCE