Strengthening Formal Credit Access and Performance through Financial Literacy and Credit Terms in Micro, Small and Medium Businesses

Widyastuti, Maria and Ferdinand, Deograsias Yoseph Yustinianus and Hermanto, Yustinus Budi (2023) Strengthening Formal Credit Access and Performance through Financial Literacy and Credit Terms in Micro, Small and Medium Businesses. Journal of Risk and Financial Management, 16 ((1)52). pp. 1-14. ISSN 1911-8074

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Official URL: https://www.mdpi.com/1911-8074/16/1/52

Abstract

This study aims to test financial literacy and credit conditions in determining formal credit access to determine the performance of MSMEs. This research includes the type of associative research that is accompanied by hypothesis testing. This research was conducted on MSMEs of as many as 324 creative industry players in four cities in East Java (Mojokerto, Pasuruan, Gresik, and Sidoarjo) with a sample size of 100 actors who had accessed formal credit using the stratified random sampling method for data collection. The results of Smart PLS analysis show that financial literacy and credit terms directly and significantly affect access to formal credit and MSME performance; formal credit access directly and significantly affects MSME performance. Likewise, financial literacy and credit terms indirectly affect the performance of MSMEs. These results mean that financial literacy and credit terms have a strategic role in explaining why access to formal credit is growing and is attracting MSMEs to strengthen capital to improve performance.

Item Type: Article
Uncontrolled Keywords: formal credit access; performance; financial literacy; credit terms
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: Fakultas Ekonomi > Prodi Manajemen
Depositing User: Yustinus Budi Hermanto
Date Deposited: 17 Jan 2023 09:48
Last Modified: 17 Jan 2023 09:48
URI: http://repositori.ukdc.ac.id/id/eprint/1277

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