Financial Literacy Impact on Small-Medium Enterprises Development and Sustainability in Indonesia

Abstract

Small-medium enterprises (SMEs) in Indonesia are becoming the pillars for the future of Indonesia's economy. Hence SMEs need to thrive and survive in the business world. This research aims to examine the correlation between financial literacy and the sustainability of small-medium enterprises in Indonesia. Financial literacy in Indonesia is low, and it is not considered an essential factor for the sustainability of SMEs. Although the financial literacy percentage in Indonesia is still low, this does not mean that every SME owner in Indonesia is financially illiterate. A qualitative study will be used to process the data. Data are collected through in-depth interviews of 7 SME owners in Indonesia. which then are analyzed qualitatively using the Nvivo application. It is shown that there is a correlation between financial literacy and the development and sustainability of the SME. The findings in these papers are essential information for business people and SME owners in Indonesia that being financially literate significantly impacts their businesses.