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International Seminar Proceedings and Call for Paper STIE Widya Wiwaha Vol 3, Year 2024.
Octavia Natasha
Baiq Anggun Hilendri
Wulandari Agustiningsih
Page | 58
THE INFLUANCE OF FINANCIAL BEHAVIOR, FINANCIAL LITERACY, AND
FINANCIAL TECHNOLOGY ON THE PERFOMANCE OF MSMEs IN MATARAM
CITY
Octavia Natasha1
, Baiq Anggun Hilendri2
, Wulandari Agustiningsih3
1,2,3Mataram University
octavianatasha24@gmail.com1
Abstract
The research analyze influence of financial behavior, financial literacy, and financial
technology on the performance of Mataram City MSMEs. The method used is a quantitative
approach with surveys as a data collection technique. The population of this research is
MSME actors who own MSME businesses in Mataram City, with a sample taken randomly of
100 respondents. The collected data was analyzed using multiple linear regression to test
the relationship between variables. Temun shows that financial behavior has no significant
effect on the performance of MSMEs in Mataram City, financial literacy has no effect on the
performance of Mataram City, and financial technology has a positive influence on the
performance of MSMEs in Mataram City. The results of this research emphasize the
importance of strengthening financial behavior, financial literacy and financial technology to
support MSME performance and better economic growth.
Keywords: Financial behavior, financial literacy, financial technology, performance.
INRODUCTION
Unemployment has a significant impact in Indonesia. According to the Central Statistics
Agency, the open unemployment rate has been decreasing over the past three years. In 2021, the
unemployment rate was 6.49%, in 2022 it was 5.86%, and in 2023 it was 5.32%. In West Nusa
Tenggara Province, the open unemployment rate as of February 2024 is 3.30%, which is a decrease
from the previous year's rate of 3.73% in 2023. One of the efforts to address unemployment is to
create job opportunities or establish businesses through Micro, Small, and Medium Enterprises
(MSMEs) (Hartika et al., 2023). In addition to addressing unemployment, Micro, Small, and Medium
Enterprises can also assist the government in improving the economy of provinces or cities and even
the national economy. This is supported by the Ministry of Finance of the Republic of Indonesia,
which states that one of the appropriate sectors for boosting the national economy is Micro, Small,
and Medium Enterprises, as evidenced by the recruitment of labor in this sector (Ministry of Finance
of the Republic of Indonesia, 2017)
The government continues to strive to provide capital assistance, marketing support, and
training to enhance the performance of MSMEs. Several factors can influence the performance of
MSMEs, with the first being financial behavior. Financial behavior refers to an individual's response in
managing the finances of their business and their responsibility in handling the financial aspects of
their enterprise (Dan et al., 2023). According to www.cnnindonesia.com, based on the OCBC
Financial Index in 2021, the financial behavior of the younger generation in Indonesia remains low at
37.72 out of a range of 100
Efficient financial management, including decision-making regarding investments,
expenditures, and cash flow management, is a crucial factor for enhancing the stability and growth of
International Seminar Proceedings and Call for Paper STIE Widya Wiwaha
ISSN 2986-0490
Vol.3, No.1, Year 2024, Page. 58 – 71
Page 3 of 14
International Seminar Proceedings and Call for Paper STIE Widya Wiwaha Vol 3, Year 2024.
Octavia Natasha
Baiq Anggun Hilendri
Wulandari Agustiningsih
Page | 60
Medium Enterprises (MSMEs) in Mataram City. Good financial behavior enables MSME actors to
manage finances efficiently, positively affecting the stability and competitiveness of their businesses.
Financial literacy also plays a crucial role, as entrepreneurs who understand financial aspects are
more likely to identify opportunities and manage risks, as demonstrated by the research of
(Ilarrahmah & -, 2021) and (Yeni Putri Devi Lestari & Hwihanus Hwihanus, 2023)
Additionally, the adoption of financial technology provides easy access to financial services,
thereby assisting MSMEs in financial management and enhancing operational efficiency. Research by
(Mulyanti & Nurhayati, 2022) as well as (Fadilah et al., 2022) confirms that the use of fintech
contributes positively to MSME growth. Therefore, to support the performance of MSMEs in Mataram
City, it is essential for the government and other stakeholders to continue improving training programs
and support in financial behavior and literacy, as well as facilitate access to fintech services. These
efforts will not only help MSMEs address existing challenges but also contribute to the development of
a more sustainable local economy.
THEORETICAL FRAMEWORK AND HYPOTHESIS DEVELOPMENT
Theoretical Basis
Theory of Planned Behavior (TPB)
The Theory of Planned Behavior developed by Ajzen (1991) serves as the grand theory or
foundation for this research, stating that human behavior is influenced by intentions or goals, which
consist of three main components: attitudes, subjective norms, and perceived behavioral control. The
Theory of Planned Behavior (TPB) is an extension of the Theory of Reasoned Action (TRA), which
explains that individuals will rationally consider all possible implications of the actions they intend to
take before acting. In TPB, in addition to considering attitudes and social norms, emphasis is also
placed on individuals’ perceptions of their ability to control those actions. This factor makes TPB more
comprehensive than TRA, as it incorporates the element of perceived control, reflecting individuals'
beliefs about how capable they are of performing specific behaviors. With this approach, TPB helps
explain more complex behaviors, where even if someone has good intentions, their ability or external
barriers can influence whether those intentions are actually realized in action.
Financial Behavior
Financial behavior refers to the actions that business owners take regarding their finances.
Many entrepreneurs feel satisfied when their income increases, which can sometimes lead to poor
financial planning and overspending. This can harm the performance of micro, small, and medium
enterprises (MSMEs) and slow their growth. Making smart financial decisions can improve profitability,
while a lack of financial skills can have negative effects. Those who manage their finances well tend
to perform better, stay competitive, and adapt to market changes. Therefore, a solid understanding of
financial management is essential for the success and sustainability of businesses. Research shows
mixed results: while (Fitria et al., 2021) found that financial behavior does not affect MSME
performance, studies by (Rusnawati, Rusdi. R, 2022) and (Nopiyani & Indiani, 2023) indicate that it
does have a significant impact.
Financial Literacy
Financial literacy is the ability of individuals, including business owners, to use financial
information for decision-making. Those with good financial knowledge can plan their finances more
effectively. While financial literacy is important, it is not the only factor that affects the performance of
micro, small, and medium enterprises (MSMEs). Other aspects, such as management skills, work
discipline, leadership styles, and psychological factors like fear or lack of confidence, also play
significant roles. Therefore, while financial literacy lays a strong foundation for making good decisions,
MSME performance is influenced by many interconnected factors.