Financial Literacy, Inclusion and Digital Financial Capability on Business Sustainability: Mediating Effects of Financial Personal and Behaviour with Financial Resilieance as a Moderator in Food and Beverage SMEs in Kupang City, East Nusa Tenggara

Abstract

Introduction: MSMEs in Indonesia, particularly in Kupang City, face various challenges such as weak financial management, low levels of financial literacy and inclusion, and limited adoption of digital financial technology. Many business actors are unable to separate personal and business finances, lack proper financial record-keeping, and often make emotional financial decisions. Additional barriers include limited access to formal financial services due to negative perceptions of high interest rates and complex banking procedures. Unproductive financial behavior also weakens financial resilience and threatens business sustainability.

Objectives:This study aims to analyze the influence of financial literacy, financial inclusion, and digital financial capability on personal finance and financial behavior, as well as their impact on the business sustainability of MSMEs. Additionally, the study evaluates the mediating role of personal finance and financial behavior and the moderating role of financial resilience.

Methods: A quantitative approach was employed using Structural Equation Modeling with Partial Least Squares (SEM-PLS) on a sample of 154 food and beverage MSMEs in Kupang City that have been operating for more than five years.

Results: The results indicate that financial literacy and financial inclusion significantly influence personal finance, while financial inclusion and digital financial capability affect financial behavior. However, only personal finance has a significant impact on business sustainability. No significant mediating or moderating effects were found.

Conclusions: Strengthening the personal financial capacity of MSME actors is crucial to supporting business sustainability. Interventions such as financial management training, improving literacy in formal financial services, and fostering healthy financial behavior are essential. These findings offer theoretical and practical contributions to empowering MSMEs through an integrated and sustainable financial approach