The Effect of Financial Literacy and Financial Access to the Performance of SMEs (Small and Medium Enterprises) in the Trade Sector of Padang City

Abstract

This study aims to empirically examine the effect of financial literacy on the performance of SMEs by using financial access as a mediating variable. The object of this study was the small and medium-sized enterprises of the trade sector in Padang City. The sample in this study amounted to 120 respondents selected based on purposive sampling method. Hypothesis testing was done using Structural Equation Modeling (SEM) analysis with the STATA version 12.0 program. The results of this study indicate that Financial Literacy has a significant effect on the performance of SMEs and Financial Access has a significant effect and mediates partially the relationship between Financial Literacy on SMEs Performance.