The Effect Of Financial Literacy, Fintech
(Financial Technology) and Intellectual Capital
On The Performance Of MSMEs In
Depok City, West Java
Nur Hamidah, Rida Prihatni, IGKA Ulupui
State
University of Jakarta, Indonesia State
University of Jakarta, Indonesia State University of Jakarta, Indonesia
Email: [email protected]
ARTICLE INFO ABSTRACT
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Date received :
Revision date : 25 August 2020 Date
received :
Keywords:
Loans
Problematic
Loans Unit Pengelola Kegiata
Sharia
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MSMEs are growing and competing in a
business environment that is
constantly changing like today in the digital era, it is necessary to monitor and understand company performance to achieve
a greater level of business than before,
and to determine the extent to which business
is being carried out on target.
This study aims to analyze and examine the effect of financial literacy, fintech (financial technology), and
intellectual capital on the performance of MSMEs in Depok City.
Determination of the sample using probability sampling with a proportional random sampling technique
than simple random sampling. The number of samples used was 286 samples. The primary data source was taken by
using a survey method with a questionnaire.
The research design used descriptive and parametric statistical analysis methods with instrument tests and multiple linear regression
analysis. The results of this study
are financial literacy, fintech (financial technology) and intellectual capital have a positive and significant effect
on the
performance of MSMEs in Depok City .
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INTRODUCTION
As a driving
force for socio-economic development in all countries, micro, small and medium
enterprises (MSMEs) are newly developing productive
enterprises and the forerunners of large enterprises in the future that are owned by individuals and business entities.
Since the economic crisis in the 1990s, it has shown that micro, small and medium
enterprises continue to grow
and become saviors by contributing to GDP and employment. The development of SMEs is consistently
the government's top priority because it is considered to be able to provide
benefits for social welfare (Anas, Mangunsong, and
Panjaitan, 2017).
In addition to the advantages of MSMEs in Indonesia which can provide
a large GDP contribution to the
country and can absorb labor, MSMEs in Indonesia also have several
weaknesses including lack of financial
stability in access to capital,
lack of resources to use advanced technology, and have not evaluated management performance. relevant
for analysis and facing challenges (Zulkifli, Char, Rushdan
and Hassan, 2010).
Depok City is one of the cities in West Java which is quite
advanced with a population in 2017 of 2
million. The growth of Micro Small Enterprises and Large Medium Enterprises is the largest in Bandung City and then Bekasi (Dinas Koperasi dan Usaha
Kecil Jabar, 2017), this
shows that the growth of MSMEs in Depok City is still very far away so it needs
to be maximized because Depok is a a large and developing
city.
The growth of micro, small and medium enterprises can be measured
quantitatively and qualitatively. Qualitative growth can be achieved
through subjective company
attributes such as increasing the quality of output and describing a positive image of the product. A quantitative perspective is also considered which can be observed in measurable indicators such as an increase
in the number of employees, sales revenue and profitability (Anderson, 2017).
Data from the OJK (Otorisasi Jasa Keuangan) states that around 60% have bank accounts.
This number is far behind Malaysia,
which reached 81% and China 79% (Global
Findex, 2017). These obstacles
occur due to a lack of understanding of financial
literacy. For this reason, efforts are needed
to educate MSME owners or managers to provide knowledge, attitudes and awareness to overcome and direct their organization's finances
in a strong, transparent and professional way (Karen, 2010).
The advancement of information technology in the era of the industrial revolution 4.0
currently has many benefits
through the innovations produced. Among them are the benefits of digital fintech
technology (financial technology). Most of the information
technology in an organization aims to be able
to make a positive contribution to the individual performance of members of the organization and its institutions (Brynjolfsson and Hitt, 1996). Technology contributing to performance must be supported
by an understanding for managers
to understand the use of the system (Lucas and Spitler, 1999).
An MSMEs certainly
has optimism for its growing
business, so that MSMEs players
try to improve their future-oriented business through competitive advantages, entrepreneurs must have an understanding of financial literacy
and take advantage
of technology as the times and utilize
intellectual capital. Intellectual capital is a company resource
that can be developed including
land, technology, labor (ability and knowledge), capital,
and legacy of expertise (Leitner,
2011).
THEORITICAL FRAMEWORK
AND HYPOTHESIS
The Financial Literacy And Performance
Tuffour, Amoako, and Amartey (2020) in measuring
financial literacy which consists of financial knowledge, awareness, and financial
attitudes among SME entrepreneurs in Ghana has an influence on financial and non-financial performance.
In the research of (Sanistasya, Rahardjo, and Iqbal, 2019) financial literacy is
considered capable of facilitating small businesses to expand and increase profitability, productivity, and competitive advantage. Financial literacy in its application is an important
component in the organization, with financial literacy
will increase understanding of management
practices and minimize losses so as to increase the sustainability of SMEs (Ye and Kulathunga, 2019). Research by Sabana, (2014) concluded that financial literacy
will increase the importance
of decision-making from SME financial management
including financial planning, cash flow management,
and reliable financial reports. Based on this description, the following research
hypothesis is formulated:
H1:
Financial literacy has a positive effect on
performance
The Fintech (Financial Technology) And Performance
The application of technology-based finance to company performance uses individual
perceptions, namely business
actors and managers. Research
(Onyango, Ongus, Awuor, and Nyamboga,
2014) shows that there is an
effect of technology adoption and use on the performance of MSMEs because
according to business actors or managers who use technology, in terms of costs and impacts in daily activities that increase efficiency.
Besides, in the research on technology adoption in MSMEs researched by (Infithor and
Kornitasari, 2019), it found that
information technology affected expectations of increased performance. Business owners find information technology helpful in completing their tasks. So that the application of technology
can be said to have an impact on the productivity of the process
will expand sales, improve customer
service, and provide
a competitive position
(Endraswari, 2006). Based on this
description, the following research hypothesis is formulated:
H2: Fintech has a positive
effect on performance
The Intellectual Capital and Performance
Broad recognition that intellectual capital is a critical force that drives economic growth (Dewi, Alhabsyi,
Arifin, and Abdillah,
2019). Intellectual capital
in micro, small, and medium enterprises (MSMEs) can help entrepreneurs better
understand the importance of
capitalizing on intangible assets to create competitiveness in the market (Khalique, Bontis, Shaari, Yaacob, and Ngah, 2018).
(Supeno, Sudharma, Aisjah, and Laksmana, 2015)
examine that intellectual capital creates a competitive advantage
between the competition between the same MSMEs business
industries in
organizational performance because it is considered a strategic resource that must be owned by MSMEs.
Intellectual capital research
indicates that intellectual capital developed in honing competent employees, innovating, and maintaining good relationships will result in successful businesses in the future and can excel in business competition between entrepreneurs in similar fields
(Absah,
Chairunisa Muchtar,
and Qamariah, 2018).
H3: Intellectual capital has a positive
effect on performance
Figure 1. Theoritical Framework
METODE
The type of research used in this study uses a quantitative approach. The method in this study uses primary data sources from direct
distribution of questionnaires and via google form which is distributed to social media WhatsApp, Depok UMKM Facebook
group, and email to owners of MSMEs. The research method used
descriptive and parametric statistical analysis with the analysis technique of instrument test, basic
assumption test, and hypothesis testing using SPSS version 22.
Population and Sample
The population of this research is the owners of micro, small and medium enterprises
(MSMEs) in Depok. The sample size was
taken using the slovin formula and
the number of samples used was 286 samples. Determination of the sample using probability sampling with a proportional random sampling technique
than simple random sampling.
The variables in this study consisted of independent
variables (independent) and dependent variables
(dependent). The independent variables in this
study are Financial Literacy (X1), Fintech (X2), Intellectual Capital (X3), and the dependent variable is Performance (Y).
RESULTS AND DISCUSSION ANALYSIS
Validity Test of Items
Financial Literacy
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Item-Total Statistics
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Scale Mean if Item
Deleted
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Scale Variance if Item
Deleted
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Corrected
Item-Total Correlation
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Cronbach's Alpha if Item
Deleted
|
|
q1
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47,43
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69,840
|
,650
|
,888
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q2
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47,37
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71,895
|
,541
|
,893
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|
q3
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47,33
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73,402
|
,550
|
,892
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|
q4
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47,37
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69,344
|
,628
|
,889
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|
q5
|
47,23
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69,978
|
,607
|
,890
|
|
q6
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47,37
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71,895
|
,541
|
,893
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|
q7
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47,23
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69,978
|
,607
|
,890
|
|
q8
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47,13
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74,326
|
,462
|
,896
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|
q9
|
47,23
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69,978
|
,607
|
,890
|
|
q10
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47,33
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70,161
|
,610
|
,889
|
|
q11
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47,37
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70,723
|
,636
|
,888
|
|
q12
|
47,27
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71,444
|
,623
|
,889
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|
q13
|
47,13
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69,016
|
,729
|
,884
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Based on the table above to determine whether the item is valid or not by comparing r
count (value on Corrected Item total
correlation) with r table. r table
looking for a significance of 0.05 with a 2-sided test and N = 30 / df = 28, then the r table is obtained is 0.3610. From the
output of the corrected item correlation
value ≥ 0.3610, it can be concluded that 13 items of financial
literacy are said to be valid.
Validity Test of Items Fintech
Item-Total Statistics
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|
Scale Mean if Item
Deleted
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Scale Variance if Item
Deleted
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Corrected Item-Total
Correlation
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Cronbach' s Alpha
if Item
Deleted
|
|
q1
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7,80
|
2,234
|
,691
|
,741
|
|
q2
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7,60
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2,317
|
,604
|
,821
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q3
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7,80
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1,821
|
,744
|
,682
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Based on the table above to determine whether the item is valid or not by comparing r
count (value on Corrected Item total
correlation) with r table. r table
looking for a significance of 0.05 with a 2-sided test and N = 30 / df = 28, then the r table is obtained is 0.3610. From the
output of the corrected item correlation value ≥ 0.3610, it can be concluded
that 3 fintech
items are said to be valid.
Validity Test of Items Intellectual Capital
Item-Total Statistics
|
|
Scale
Mean if Item
Deleted
|
Scale
Variance if Item
Deleted
|
Corrected Item-Total Correlation
|
Cronbach'
s Alpha if Item
Deleted
|
|
q1
|
37,47
|
20,947
|
,601
|
,844
|
|
q2
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37,47
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21,361
|
,578
|
,846
|
|
q3
|
37,07
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23,168
|
,621
|
,842
|
|
q4
|
37,43
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21,151
|
,618
|
,842
|
|
q5
|
37,43
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22,806
|
,571
|
,845
|
|
q6
|
37,07
|
24,340
|
,387
|
,859
|
|
q7
|
37,27
|
22,409
|
,619
|
,841
|
|
q8
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37,13
|
23,844
|
,592
|
,846
|
|
q9
|
37,23
|
23,426
|
,592
|
,845
|
|
q10
|
37,03
|
23,275
|
,595
|
,844
|
|
|
The results of the validity and
reliability testing that have been
described, it can be concluded that all statements used in this study have been tested
for validity and reliability so that all statements are feasible
to be used as research
measurements.
Based on the table above to determine whether the item is valid or not by comparing r
count (value on Corrected Item total
correlation) with r table. r table
looking for a significance of 0.05 with a 2-sided test and N = 30 / df = 28, then the r table is obtained is 0.3610. From the output value of the
corrected item correlation ≥ 0.3610, it can be concluded that
10 items of intellectual capital are said to
be valid
Validity Test Of Items Performance
Item-Total Statistics
|
|
Scale Mean if Item
Deleted
|
Scale Variance if Item
Deleted
|
Corrected Item-Total
Correlation
|
Cronba ch's Alpha if Item
Deleted
|
|
q1
|
26,07
|
20,892
|
,763
|
,869
|
|
q2
|
26,13
|
21,292
|
,707
|
,875
|
|
q3
|
26,00
|
20,828
|
,702
|
,876
|
|
q4
|
25,67
|
22,161
|
,619
|
,884
|
|
q5
|
26,03
|
21,344
|
,666
|
,879
|
|
q6
|
25,60
|
24,938
|
,459
|
,896
|
|
q7
|
26,07
|
20,892
|
,763
|
,869
|
|
q8
|
25,63
|
21,620
|
,672
|
,879
|
Based on the table above to determine whether the item is valid or not by comparing r count (value
Multiple Linier Regression Analysis
ANOVAa
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Model
|
Sum of
Squares
|
df
|
Mean
Square
|
F
|
Sig.
|
|
|
Regression
|
2190,205
|
3
|
730,068
|
97,999
|
,000b
|
|
|
Residual
|
2100,829
|
282
|
7,450
|
|
|
Total
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4291,035
|
285
|
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a. Dependent Variable: Performance (Y)
b.
Predictors: (Constant),
Intellectual Capital (X3), Fintech
(Financial Technology) (X2), Finnacial Literacy
(X1)
Coefficientsa
|
Model
|
Unstandardiz ed Coefficients
|
Standardi zed Coefficien
ts
|
t
|
Sig.
|
|
B
|
Std. Error
|
Beta
|
|
(Constant)
|
4,129
|
1,703
|
|
2,424
|
,016
|
|
Financial Literacy (X1)
|
,146
|
,024
|
,285
|
6,020
|
,000
|
|
Fintech (Financial Literacy) (X2)
|
,649
|
,095
|
,318
|
6,829
|
,000
|
|
Intellectual Capital
(X3)
|
,295
|
,044
|
,322
|
6,714
|
,000
|
|
Model
|
R
|
R Square
|
Adjusted R
Square
|
Std. Error of
the Estimate
|
|
1
|
,714a
|
,510
|
,505
|
2,729
|
|
|
a. Dependent Variable: Performance (Y) Model
Summaryb
on Corrected Item total correlation) with r table. r table looking for a significance of 0.05
with a 2-sided test and N = 30 / df
= 28, then the r table is obtained is 0.3610.
From the output of the corrected
item correlation value ≥ 0.3610, it can be concluded
that 8 performance items are said to be valid.
Reliability Test
|
Variabel
|
Alpha Cronbach
|
CR
Tabl e
|
Conclus ions
|
|
Financial Literacy
|
0,89
|
0,60
|
Reliable
|
|
Fintech
|
0,82
|
0,60
|
Reliable
|
|
Intellectual Capital
|
0,86
|
0,60
|
Reliable
|
|
Performance
|
0,89
|
0,60
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Reliable
|
Source : Process data (2020)
Based on the table above, it can be concluded that all variables
have a Cronbach Alpha that is greater
than 0.60 so that these variables are declared
worthy of being used as a data collection instrument.
a.
Predictors: (Constant),
Intellectual Capital (X3), Fintech (Financial Technology) (X2), Finnacial Literacy
(X1)
b. Dependent Variable: Performance (Y)
It is found the Multiple
Regression Analysis Model is :
Y = 4,129
+0.146LK+0,649FT+0,295MI+e.
From the table above shows 3 predictive variables, LK (Sig. = 0,000),
FT (sig. = 0,000) and MI
(Sig. = 0,000) significantly affect the performance of MSMEs. The coefficient of determination (R2) in this study is the amount of the coefficient of determination
in this study is 0.510, so it can be concluded that financial literacy,
fintech, and intellectual capital contribute 51% of MSMEs performance.
While the remaining 49% is explained by other variables outside the model.
Analysis of Research
Hypotheses
1.
Effect Financial Literacy on Performances of MSME
In table multiple
regression analysis the coefficient value of the financial literacy,
a variable is 0.146 and sig.0,000 and H1 is
acceptable, it can be concluded that financial literacy has a positive and significant
effect on the performance of MSMEs.
This research
is in line with the research
conducted (Tuffour et al., 2020), (Sanistasya et al., 2019), (Ye and Kulathunga, 2019) and (Sabana, 2014) stated that financial
literacy has a positive influence on
MSMEs performance. So that
financial literacy plays the role of MSMEs in
performance to control the future by adapting to rapid economic changes
in the business environment in making more protective decisions.
2.
Effect Fintech (Financial Literacy)
on Performances of MSME
In table multiple
regression analysis the value
of the regression coefficient of the fintech variable (financial technology) is 0.649 and Sig. 0,000, it can be concluded that fintech (technology-based finance) has a positive and significant
effect on the performance of MSMEs. Fintech is considered to provide convenience for business support
because it is more effective
and efficient and the application is easy to obtain. Besides,
the adoption of fintech
can consumers with various promotions
and delivery services
that have an increasing impact
on their business. Another consideration is the transparency of the history
of incoming money,
and it does not rule out the possibility of fintech being used for payment of transactions
for their business
activities.
This research is in line with research
(Infithor and Kornitasari, 2019) (Infithor and Kornitasari,
2019), (Onyango et al., 2014) and (Endraswari,
2006) that technology can improve the performance of an organization. The application of this new culture opens opportunities for comfort between
business owners and consumers
because it is faster and can reach a wider market.
3. Effect Intellectual Capital on Performances of MSME
In table multiple
regression analysis the coefficient value of the intellectual capital,
a variable is 0.295 and Sig. 0.000, it can be concluded
that intellectual capital
has a positive and significant effect on the performance of MSMEs.
This is in line with research on intellectual capital in MSMEs conducted by (Dewi et
al., 2019), (Absah et al., 2018),
(Khalique et al., 2018) and (Supeno et al., 2015) that intellectual capital includes human capital, structural capital and customer capital
to create a competitive advantage among the competition between the same MSME business
industry in organizational
performance because it is considered a strategic resource
that must be owned.
Discussions
From the results
of research and variable testing, suggestions that can be given
as input to the goverment
can grow and increase levels include:
1.
There is a need for gradual scale
training for understanding financial
literacy in addition
to financial knowledge, knowledge of good bookkeeping
can also be provided, assessing financial performance, sharpening attitudes in making decisions
regarding financial products
and services. It is hoped that from financial literacy, the owners of MSMEs can prepare
a funding strategy for their business with good and mature decisions. Besides, financial
literacy will increase financial
inclusion in the stability of the
country because MSMEs owners will have an
economic mindset on how to view profit and money.
2.
Basic introduction to various types
of fintech or financial technology applications so that business
actors are technology literate so that they can provide benefits,
even though later there
will be positive or negative values
from patterns or thoughts that have
not received well. The application
of fintech will be a challenge for MSME owners to be able to make these
services their partners. Besides, it is hoped that with technological literacy, business
actors will not fall into illegal or harmful applications.
3. Providing innovative and creative MSME development by opening collaborations or partnerships with large local and
international companies.
Furthermore, from the results of research and variable testing,
suggestions that can be given
as input to business owners or MSME managers include
1. Whereas activities related to finance
and technology are needed by MSMEs in the current
situation.
2. Sharpening special
skills to produce
products and services that are unique and difficult to imitate,
by providing motivation and means at work, besides
maintaining good relationships with relationships (consumers and vendors) need to be maximized
properly because they can affect performance.
Based on the limitations of the researcher, it is suggested for further researchers:
1. Conduct research
on a more specific business
industry to see its influence on that particular
business industry.
2. Adding other statements besides
this research to measure more deeply the variables of financial literacy,
fintech and intellectual capital.
3. Measuring the questionnaire items on a nominal scale ("yes" or "no") to confirm answers.
CONCLUSION
Based on the analysis and discussion that has been stated previously, the following conclusions can be drawn:
1.
The hypothesis of the effect of
financial literacy on performance,
the results are positive and significant.
This concludes that when financial literacy
can be improved, the performance of MSMEs will also increase.
2.
The hypothesis of the effect of
fintech (financial technology) on performance, positive
and significant results are
obtained. This concludes that the use of various types of fintech
applications (technology-based finance) when they can be properly improved, it can help the performance of MSMEs to get better.
3.
The hypothesis of the effect of intellectual capital on performance, positive and
significant results are obtained.
This concludes that when intellectual
capital is maximized properly, the performance of MSMEs will be good too.
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