FINANCIAL KNOWLEDGE AND LITERACY OF MSMEs FINANCIAL RESILIENCE DURING THE PANDEMIC COVID-19: EVIDENCE FROM INDONESIA
The pandemic that is still engulfing the world, including Indonesia, has created uncertainty in the business world, including micro, small and medium enterprises. During economic recovery efforts, financial resilience is an important thing that MSMEs need to survive. We added financial sophistication to the previous study as a set of financial skills required by MSME entrepreneurs, in addition to financial knowledge, literacy, and inclusion, For the purpose of maintaining and expanding their business. The purpose of this study is to investigate the impact of financial knowledge and literacy on the financial resilience of MSMEs in Indonesia. In addition, our paper aims to build a model of financial skills for MSMEs, by testing financial inclusion as a mediating and financial sophistication as a moderating variable, which is validated using a questionnaire. We used purposive sampling in determining the sample and 294 questionnaires were processed as research data using SmartPLS. The results of the study prove that financial resilience depends on financial knowledge, literacy, inclusion, and sophistication. The interaction of financial sophistication strengthens the relationship between inclusion and resilience. In addition, financial inclusion mediates financial knowledge and resilience. Based on these results, we suggest the need to expand financial inclusion and sophistication so that MSMEs can survive in times of crisis.
Financial knowledge, financial literacy, financial inclusion, financial sophistication, financial resilience, Indonesia.