THE INFLUENCE OF FINANCIAL LITERACY ON THE FINANCIAL PERFORMANCE OF MSMEs

Abstract

This study aims to analyze the influence of financial literacy on the financial performance of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia using a Systematic Literature Review (SLR) approach. The study was conducted through the search and analysis of various relevant scientific literature indexed by SINTA. The results show that financial literacy has a positive and significant influence on improving the financial performance of MSMEs. Business actors with a good level of financial literacy are able to plan and control cash flow, manage capital use, and make appropriate financial decisions. Understanding financial concepts also helps business actors separate personal and business finances, prepare simple financial reports, and improve operational efficiency. In addition, financial literacy encourages MSMEs to be more adaptive to economic changes and able to optimally utilize business opportunities. Thus, improving financial literacy is a strategic step in strengthening the competitiveness and sustainability of MSMEs, as well as making a positive contribution to sustainable national economic growth.