Financial Literacy among SMEs Owners in Sumatera, Indonesia: The Role of Parents’ Motivation and Experience

Rika Desiyanti and Aza Azlina Md Kassim

Journal of Accounting and Finance in Emerging Economies, 2020, vol. 6, issue 3, 821-829

Abstract: Financial literacy is the ability of an individual to obtain financial information and take effective actions or decisions to manage any financial matters. The owners of SMEs should &manage their financial business effectively to avoid financial problems. In 2013, the financial services authority (OJK) has conducted a financial survey and the result indicated that only 21.8% of people understand finance and in 2016, the percentage has increased from about 8% to 29.66%. &Low level of financial literacy gives bad effect on financial decisions, including less saving, &opting for more leverage, and involved in unprofitable investments. This paper aims to analyze the influence of parents’ motivation and parents’ experience on financial literacy. A questionnaire survey has been distributed among SME owners in Sumatera, Indonesia. &Based on a sample of 60 respondents, the result shows that parents’ motivation does affect financial literacy. Nevertheless, financial experience by the parents does not affect financial literacy.

Keywords: parents’ motivation; parents’ experience; financial literacy (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:src:jafeec:v:6:y:2020:i:3:p:821-829

DOI: 10.26710/jafee.v6i3.1205

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