Financial Literacy, Risk Tolerance, and Financial Management of Micro-enterprise Actors

Abstract

Micro-enterprises have a significant role in the country’s economy. However, business owners must face various problems to develop their business. One of the problems is the limited funding for micro-enterprises due to the low financial literacy of business owners. In addition, the business owner’s tolerance for risk is also expected to affect the financial management of micro-enterprises. This study aims to determine the level of financial literacy andtolerance of business owners and the financial management of micro-enterprises. This research method uses a questionnaire distributed to micro-enterprise owners in Central Java Province and Yogyakarta Special Region. The results showed that the level of financial literacy of micro-enterprise owners was in the medium category. Micro-enterprise owners have a neutral attitude towards risk and are not individuals who dare to take risks but do not avoid risk. Financial management carried out by business owners is still in the poor category. Improvement of financial literacy, understanding of risks, and financial management of micro-enterprises still need to be done.

Digital Financial Literacy and its Impact on the Financial Well-Being of Small and Medium-Sized Industries

“…Perpetrator business already knows institution service finance nor products and services service finance need to know to characteristics of products and services service finance (1,3,9,(15)(16)(17). That thing is necessary for the perpetrator business to choose and use products and services that appropriately finance with needs and abilities.…”

Financial Literacy and Performance of Micro, Small and Medium Enterprises: A Literature Review

“…The level of the company's gross profit ratio was found to be the determinant that most influences financial literacy. Additionally, self-control moderates the relationship between financial literacy and saving behavior, with individuals with low self-control needing more financial literacy to have a positive effect on their savings behavior (Hirawati et al, 2021). The factors that influence the financial literacy of MSMEs are age, level of formal education and business income (Suryanto & Rasmini, 2018).…”

“…The low level of financial literacy among business actors is an obstacle for MSMEs to develop (Fatoki, 2021); (Aritonang et al, 2023). MSME players face various problems related to low financial literacy, including: financial difficulties and making wise financial decisions ( (Harianti et al, 2021); (Meitriana et al, 2022)), financial management (Susan, 2020), capital problems (Aritonang et al, 2023, long-term planning (Bancoro, 2023), business sustainability (Ferli, 2023), funding limitations ( (Ferli, 2023); (Suwarsi et al, 2022); (Meitriana et al, 2022);(Astari & Candraningrat, 2022); (Sisharini et al, 2019); (Hirawati et al, 2021)) thus hampering the development of MSMEs (Sisharini et al, 2019).…”

Pelatihan Analisis Kelayakan Bisnis di Desa Wisata Gunungpring

“…Pengelolaan keuangan usaha mikro menurut (Hirawati et al, 2021) masih termasuk dalam kategori kurang baik. Permasalahan yang paling mendasar adalah tidak adanya pencatatan keuangan yang baik, sehingga pelaku usaha sendiri tidak mengetahui jumlah kekayaan yang mereka miliki, apakah mereka mendapatkan keuntungan atau kerugian juga tidak diketahui oleh pelaku usaha.…”