Financial inclusion as mediator in the relationship of social capital and financial literacy towards business performance of the trade sector SMEs in Pekanbaru, Indonesia

Economic Annals-ХХI: Volume 194, Issue (11-12), Pages: 21-28

Citation information:
Irman, M., Budiyanto, & Suwitho (2021). Financial inclusion as mediator in the relationship of social capital and financial literacy towards business performance of the trade sector SMEs in Pekanbaru, Indonesia. Economic Annals-XXI, 194(11-12), 21-28. doi: https://doi.org/10.21003/ea.V194-03

Mimelientesa Irman
PhD Student (Economics),
Doctoral Program Management Sekolah Tinggi Ilmu Ekonomi Indonesia,
Lecturer,
Management Study Program,
Institute of Business and Technology Pelita Indonesia
Jl. Kayu Jati Raya No.11A, RW.3, Rawamangun, Kec. Pulo Gadung, Kota Jakarta Timur,
Daerah Khusus Ibukota Jakarta, 13220, Indonesia
mimelientesa.irman@lecturer.pelitaindonesia.ac.id
ORCID ID: https://orcid.org/0000-0001-5451-8399

Budiyanto
PhD (Economics),
Professor,
Supervisor in Writing a Dissertation,
Sekolah Tinggi Ilmu Ekonomi Indonesia
Jl. Kayu Jati Raya No.11A, RW.3, Rawamangun, Kec. Pulo Gadung, Kota Jakarta Timur,
Daerah Khusus Ibukota Jakarta, 13220, Indonesia
budiyanto@stiesia.ac.id
ORCID ID: https://orcid.org/0000-0001-7007-9066

Suwitho
PhD (Economics),
Professor,
Supervisor in Writing a Dissertation,
Sekolah Tinggi Ilmu Ekonomi Indonesia
Jl. Kayu Jati Raya No.11A, RW.3, Rawamangun, Kec. Pulo Gadung, Kota Jakarta Timur,
Daerah Khusus Ibukota Jakarta, 13220, Indonesia
suwitho@stiesia.ac.id
ORCID ID: https://orcid.org/0000-0002-3869-2319

Financial inclusion as mediator in the relationship of social capital and financial literacy towards business performance of the trade sector SMEs in Pekanbaru, Indonesia

Abstract. This study analyzes SMEs’ performance problems in the trade sector in Pekanbaru by using several internal company factors to build a competitive strategy till the year 2021. The variables used in this study consisted of social capital, financial literacy, financial inclusion, and business performance. The study used 300 SMEs consisting of 26 wholesalers and 274 retailers in Pekanbaru, Riau. We used a structural equation model (SEM) approach with AMOS for hypothesis testing.
The results show that social capital and financial literacy have a significant direct effect on the SME businesses’ performance in the trade sector in Pekanbaru. This shows that social capital and financial literacy are two determining factors for the success of SME businesses. However, social capital does not affect business performance indirectly through the role of financial inclusion.

Keywords: Social Capital; Financial Literacy; Financial Inclusion; SMEs’ Business Performance

JEL Classifications: B26; P43; P43

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V194-03

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Received 26.08.2021
Received in revised form 29.09.2021
Accepted 3.10.2021
Available online 27.12.2021