The Influence of Financial Literacy and Financial Planning on the Financial Behavior of MSMEs in Candi District, Sidoarjo

Abstract

This study aims to analyze the influence of financial literacy and financial planning on the financial behavior of MSMEs (Micro, Small, and Medium Enterprises) in Candi District, Sidoarjo Regency. Given the significant contribution of MSMEs to the Indonesian economy, the ability of MSMEs to manage finances well is crucial for business sustainability. This study uses a quantitative method with an explanatory approach, involving a number of MSMEs. Data collection was carried out using questionnaires and observations, and analysis using multiple linear regression using IBM SPSS 24. The results of the study indicate that financial literacy and financial planning partially and significantly have a positive effect on financial behavior. This means that the higher the level of financial literacy and structured financial planning, the better the financial behavior of MSMEs, including in cash flow management and financial decision making. The results of this study indicate the importance of increasing MSME actors' understanding of financial management to improve business performance and sustainability.