Analysis of Financial Literacy's Impact on MSME Independence

Abstract

The goal of this study is to comprehend how financial literacy is interpreted by MSME (Trenggalek Typical Food) players in relation to achieving business independence. As we all know, financial literacy is the capacity to comprehend and apply financial skills in an efficient manner with reference to knowledge of financial services, products, features, benefits, risks, expenses, and financial management, particularly with regard to MSMEs in Trenggalek specialty food managing their business. A prevalent phenomena in the field is the close relationship between the degree of financial literacy and numerous MSME development issues, which can be broadly related. The research focuses on how independent their enterprises are—that is, how they comprehend and apply financial literacy in their activities and behavior—so that they are not dependent on others to meet the goals that MSMEs aspire to. In order to examine the meaning of financial literacy towards the independence of their MSMEs, the author of this research adopts a qualitative, phenomenological approach to capture the reality found in typical Trenggalek food MSMEs. Methods of observation, interviews, and documentation were used in the data collection process. The findings of the study indicate that the level of financial literacy utilised is restricted to a basic comprehension of bookkeeping; however, they are also knowledgeable about savings, banking products, insurance, and deposits. In essence, they comprehend because other parties are involved in the realization of their company independence.