Improving Financial Performance With Social Capital as A Moderation in UMKM in Semarang

Muhammad Dwi Aristo

Abstract


Abstract. This paper shows that social capital is able to moderate the relationship between financial literacy and financial innovation on financial performance. By using quantitative research methods and collecting data by giving questionnaires to respondents. This study investigates the role of financial literacy and financial innovation on financial performance. As well as the role of social capital in moderating both. With the current conditions of the Covid-19 outbreak, MSMEs need to realize the importance of financial literacy and financial innovation in order to improve financial performance in order to continue to exist and survive. This study reveals that financial literacy has a positive influence on financial performance, but social capital weakens the relationship. This shows that individual awareness of social capital towards financial literacy is still low. On the other hand, in this study Financial innovation has no effect on financial performance, but social capital is able to strengthen the relationship between financial innovation and financial performance. This shows that social capital, apart from being a means of communicating, can be a means of sharing knowledge and skills so that it can affect the level of financial innovation.

Keywords: Financial Literacy; Financial Innovation; Financial Performance; Social Capital


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