Strategic Approaches to Enhancing Financial Performance: Financial Literacy and Social Capital as Pillars of Business Resilience Amid Global Economic Challenges

Authors

  • Yuliusman Yuliusman Universitas Jambi, Jambi, Indonesia
  • Wirmie Eka Putra Universitas Jambi, Jambi, Indonesia
  • Fredy Olimsar Universitas Jambi, Jambi, Indonesia
  • Nyimas Dian Maisyarah Universitas Jambi, Jambi, Indonesia
  • Dahmiri Dahmiri Universitas Jambi, Jambi, Indonesia

DOI:

https://doi.org/10.38035/gijea.v4i2.857

Keywords:

Financial Literacy, Social Capital, Financial Performance, Business Resilience

Abstract

This study aims to analyze the effect of financial literacy on the financial performance of Micro, Small, and Medium Enterprises (MSMEs), with social capital serving as a mediating variable in Jambi City, Indonesia. This research employs a mixed-methods approach, combining quantitative analysis using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with qualitative insights from in-depth field interviews. The study sample comprises 395 MSME owners selected using Slovin's formula. The results reveal that financial literacy has a positive and significant effect on both financial performance and social capital. Furthermore, social capital significantly influences financial performance and mediates the relationship between financial literacy and MSME financial performance. These findings highlight that financial literacy is not merely a technical capability in managing finance but also a strategic competence in building trust, networks, and social collaboration that enhance business competitiveness. The novelty of this research lies in integrating cognitive and social dimensions into a single empirical model to explain MSME financial resilience. Practically, the findings provide strategic insights for policymakers and practitioners to design empowerment programs that enhance financial literacy and strengthen social capital, thereby improving MSME performance and sustainability amid global economic dynamics.

References

Adhikari, M., Ghimire, D. M., & Lama, A. D. (2024). FinTech and financial inclusion: Exploring the mediating role of digital financial literacy in enhancing access to financial services. Journal of Emerging Management Studies, 1(2), 117–136. https://doi.org/10.3126/jems.v1i2.71512

Aidoo, S. O., Agyapong, A., & Mensah, H. K. (2020). Social capital and performance of SMEs: The role of entrepreneurial orientation and managerial capability. Africa Journal of Management, 6(4), 377–406. https://doi.org/10.1080/23322373.2020.1830698

Akdere, M. (2005). Social capital theory and implications for human resource development. Singapore Management Review, 27(2), 1–25.

Akintimehin, O. O., Eniola, A. A., Alabi, O. J., Eluyela, D. F., Okere, W., & Ozordi, E. (2019). Social capital and its effect on business performance in the Nigeria informal sector. Heliyon, 5(7). https://doi.org/10.1016/j.heliyon.2019.e02024

Al-Shami, S. A., Damayanti, R., Adil, H., & Farhi, F. (2024). Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia. Heliyon, 10(15). https://doi.org/10.1016/j.heliyon.2024.e34902

AlSuwaidi, R. A., & Mertzanis, C. (2024). Financial literacy and FinTech market growth worldwide. International Review of Financial Analysis, 95, 103481. https://doi.org/10.1016/j.irfa.2024.103481

Baron, R. A., & Shane, S. (2007). Entrepreneurship: A process perspective. The Psychology of Entrepreneurship, 38, 19–40.

Bhinekawati, R. (2016). Corporate social responsibility and sustainable development: Social capital and corporate development in developing economies. Gower.

Buhari, F., Rismawati, R., & Pribadi, I. (2024). The influence of financial literacy and financial inclusion on small and medium enterprises (SMEs). Advanced International Journal of Business, Entrepreneurship and SMEs, 6(22), 80–91. https://doi.org/10.35631/AIJBES.622007

Cohen, J., Cohen, P., West, S. G., & Aiken, L. S. (2013). Applied multiple regression/correlation analysis for the behavioral sciences. Routledge.

Cuéllar, L. I. P. (2024). The Importance of Social Capital in Promo-ting Financial Inclusion: An International Perspective. Scientific Annals of Economics and Business, 71(2), 221–240. https://doi.org/10.47743/saeb-2024-0013

Devender, K., Kafila, Goli, G., & Shravan, M. (2025). Bibliometric trends in SMEs financial literacy research from 2021 to 2024. Future Business Journal, 11(1), 69. https://doi.org/10.1186/s43093-025-00495-w

Doan, H. Q., Masciarelli, F., Prencipe, A., & Vu, N. H. (2023). Social capital and firm performance in transition economies. Eurasian Business Review, 13(4), 751–780. https://doi.org/10.1007/s40821-022-00227-y

Egbunike, C. F., & Okerekeoti, C. U. (2018). Macroeconomic factors, firm characteristics, and financial performance: A study of selected quoted manufacturing firms in Nigeria. Asian Journal of Accounting Research, 3(2), 142–168. https://doi.org/10.1108/AJAR-09-2018-0029

Eniola, A. A., & Entebang, H. (2015). SME firm performance-financial innovation and challenges. Procedia-Social and Behavioral Sciences, 195, 334–342.

Eresia-Eke, C. E., & Raath, C. (2013). SMME owners’ financial literacy and business growth.

Frimpong, S. E., Agyapong, G., & Agyapong, D. (2022). Financial literacy, access to digital finance and performance of SMEs: Evidence From Central region of Ghana. Cogent Economics & Finance, 10(1), 2121356. https://doi.org/10.1080/23322039.2022.2121356

Gapembi. (2024). UMKM Indonesia. Gapembi.Id. https://gapembi.id/data-dan-statistik/umkm-indonesia/

Gibson, B., & Cassar, G. (2005). Longitudinal analysis of relationships between planning and performance in small firms. Small Business Economics, 25(3), 207–222. https://doi.org/10.1007/s11187-003-6458-4

Graña-Alvarez, R., Lopez-Valeiras, E., Gonzalez-Loureiro, M., & Coronado, F. (2024). Financial literacy in SMEs: A systematic literature review and a framework for further inquiry. Journal of Small Business Management, 62(1), 331–380. https://doi.org/10.1080/00472778.2022.2051176

Grootaert, C., & Van Bastelaer, T. (2002). Understanding and measuring social capital: A multidisciplinary tool for practitioners (Vol. 1). World Bank Publications.

Gusman, N., Soekarno, S., & Mirzanti, I. R. (2021). The Impact Of Founderâ€TM s Financial Behavior Traits And Literacy On Smes Performance: Empirical Evidence From Smes In Indonesia. Jurnal Keuangan Dan Perbankan, 25(3), 671–687. https://doi.org/10.26905/jkdp.v25i3.5799

Hair, J. F., Henseler, J., Dijkstra, T. K., & Sarstedt, M. (2014). Common beliefs and reality about partial least squares: comments on Rönkkö and Evermann.

Hj Talip, S. N. S., & Wasiuzzaman, S. (2024). Influence of human capital and social capital on MSME access to finance: assessing the mediating role of financial literacy. International Journal of Bank Marketing, 42(3), 458–485. https://doi.org/10.1108/IJBM-04-2023-0214

Huang, S., Cheng, M., & Shu, Z. (2024). Role of social capital and financial inclusion in sustainable economic growth. Research in International Business and Finance, 72, 102525. https://doi.org/10.1016/j.ribaf.2024.102525

Is, R., Kv, S., & Hungund, S. (2025). MSME/SME financial literacy: A systematic literature review and bibliometric analysis. Journal of the Knowledge Economy, 16(4), 14378–14405. https://doi.org/10.1007/s13132-024-02472-0

Kılıç, M., Gurler, H. E., Kaya, A., & Lee, C. W. (2022). The Impact of Sustainability Performance on Financial Performance: Does Firm Size Matter? Evidence from Turkey and South Korea. Sustainability, 14(24), 16695. https://doi.org/10.3390/su142416695

Lontchi, C. B., Yang, B., & Su, Y. (2022). The mediating effect of financial literacy and the moderating role of social capital in the relationship between financial inclusion and sustainable development in Cameroon. Sustainability, 14(22), 15093. https://doi.org/10.3390/su142215093

Meitriana, M. A., Yuliarmi, N. N., Utama, M. S., & Marhaeni, A. A. I. N. (2022). Social capital-based financial literacy to improve business performance: a narrative review. International Journal on Social Science, Economics and Art, 12(2), 83–90. https://doi.org/10.35335/ijosea.v12i2.97

Mutende, E. A., Mwangi, M., Njihia, J. M., & Ochieng, D. E. (2017). The moderating role of firm characteristics on the relationship between free cash flows and financial performance of firms listed at the Nairobi securities exchange. Journal of Finance and Investment Analysis, 6(4), 1–3.

Njoroge, S. W., Kwasira, J., Wambui Njoroge, S., & Kwasira, J. (2015). Influence of compensation and reward on performance of employees at Nakuru County Government. IOSR Journal of Business and Management, 17(11), 87–93.

Olimsar, F., & Tialonawarmi, F. (2021). Pengaruh Intellectual Capital Dan Corporate Governance Terhadap Kinerja Keuangan. Jurnal Manajemen Terapan Dan Keuangan, 10(02), 368–376. https://doi.org/10.22437/jmk.v10i02.17690

Ozanne, L. K., Chowdhury, M., Prayag, G., & Mollenkopf, D. A. (2022). SMEs navigating COVID-19: The influence of social capital and dynamic capabilities on organizational resilience. Industrial Marketing Management, 104, 116–135. https://doi.org/10.1016/j.indmarman.2022.04.009

Parmitasari, R. D. A., Indriyani, E., Rusnawati, R., Farild, M., Efendi, W., & Adawiah, A. (2023). Financial bootstrapping and financial literacy: The moderating role of government support on sme performance. Jurnal Minds: Manajemen Ide Dan Inspirasi, 10(2), 341–356. https://doi.org/10.24252/minds.v10i2.41131

Pongtanalert, K., & Assarut, N. (2022). Entrepreneur mindset, social capital and adaptive capacity for tourism SME resilience and transformation during the COVID-19 pandemic. Sustainability, 14(19), 12675. https://doi.org/10.3390/su141912675

Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based SEM. International Journal of Research in Marketing, 26(4), 332–344. https://doi.org/10.1016/j.ijresmar.2009.08.001

Riyadi, M. P., & Hadyarti, V. (2024). The effect of financial knowledge, financial literacy, and financial capability on MSME performance. Jurnal Ilmiah Manajemen Kesatuan, 12(6), 2637–2648.

Sarstedt, M., Ringle, C. M., & Hair, J. F. (2017). Treating unobserved heterogeneity in PLS-SEM: A multi-method approach. In Partial least squares path modeling: Basic concepts, methodological issues and applications (pp. 197–217). Springer.

Sarwar, Z., Khan, M. A., Yang, Z., Khan, A., Haseeb, M., & Sarwar, A. (2021). An investigation of entrepreneurial SMEs’ network capability and social capital to accomplish innovativeness: a dynamic capability perspective. Sage Open, 11(3), 21582440211036090. https://doi.org/10.1177/21582440211036089

Setiadi, M. B. B., Murhadi, W. R., & Marciano, D. (2024). The effect of financial literacy on financial inclusion, social capital, and cognition on beginner and experienced investor. Journal of Business and Banking, 13(2), 269–286. https://doi.org/10.14414/jbb.v13i2.4431

Shan, T., & Tian, X. (2022). The effects of social capital on entrepreneurial resilience of SME from China: A moderated mediation model of entrepreneurial passion and Confucian traditional golden-mean thinking. Frontiers in Psychology, 13, 961824. https://doi.org/10.3389/fpsyg.2022.961824

Subriadi, A. P., & Kusuma Wardhani, S. A. (2022). Survivability scenario of SMEs in facing COVID-19 crisis based on the social commerce framework. Sustainability, 14(6), 3531. https://doi.org/10.3390/su14063531

Sumastuti, E., Harahap, S., & Sianipar, G. (2024). Exploring The Impact Of Green Finance, Financial Literacy, And Social Capital On The Performance And Financial Sustainability Of Indonesian MSMEs. Journal of Economic, Bussines and Accounting (COSTING), 7(4), 10869–10886. https://doi.org/10.31539/costing.v7i4.9719

Thomas, G. N., Nur, S. M. R., & Indriaty, L. (2024). The impact of financial literacy, social capital, and financial technology on financial inclusion of Indonesian students. International Research Journal of Economics and Management Studies, 3(4), 308–315. https://doi.org/10.56472/25835238/IRJEMS-V3I4P140

Thottoli, M. M., Islam, M. A., Ahsan, A., Yusof, M. F., Hassan, M. S., & Chowdhury, R. S. (2024). Exploring mediating and moderating factors of FinTech adoption for innovations in SMEs. Cogent Economics & Finance, 12(1), 2387443. https://doi.org/10.1080/23322039.2024.2387443

Tiwasing, P., Kim, Y. R., & Sawang, S. (2023). The interplay between digital social capital and family-owned SME performance: a study of social media business networks. Journal of Family Business Management, 13(4), 1026–1048. https://doi.org/10.1108/JFBM-07-2022-0103

Tran, N. G., Trung, N. T., Long, N. T., & Dat, N. H. A. (2024). Social capital and entrepreneurial performance of SMEs: the mediating role of access to entrepreneurial resources. Management Systems in Production Engineering, 32(1), 45–53. https://doi.org/10.2478/mspe-2024-0005

Van Tran, D., Van Nguyen, P., Dinh, N. T. T., Huynh, T. N., & Van Ma, K. (2024). Exploring the impact of social capital on business performance: The role of dynamic capabilities, open innovation and government support. Journal of Open Innovation: Technology, Market, and Complexity, 10(4), 100416. https://doi.org/10.1016/j.joitmc.2024.100416

Vu, P. M., Van Binh, T., & Duong, L. N. K. (2023). How social capital affects innovation, marketing and entrepreneurial orientation: the case of SMEs in Ho Chi Minh (Vietnam). Journal of Innovation and Entrepreneurship, 12(1), 81. https://doi.org/10.1186/s13731-023-00350-8

Yuhertiana, I., Zakaria, M., Suhartini, D., & Sukiswo, H. W. (2022). Cooperative resilience during the pandemic: Indonesia and Malaysia evidence. Sustainability, 14(10), 5839. https://doi.org/10.3390/su14105839

Yuliusman, Putra, W. E., Gowon, M., Dahmiri, & Isnaeni, N. (2020). Determinant Factors Audit Delay : Evidence from Indonesia. International Journal of Recent Technology and Engineering (IJRTE), 8(6), 1088–1095. https://doi.org/10.35940/ijrte.F7560.038620

Yuliusman, Y., Fazri, A., Roza, S., & Dahmiri, D. (2024). Analysis Of Business Success Influenced By Entrepreneurial Competence With Innovation As A Mediating Variable. Seybold Report, 19(12), 5–21.

Yuliusman, Y., Zulma, G. W. M., & Azis, A. D. (2023). Contingency perspective: company characteristics, risk management voluntary disclosure, and company performance. JPPI (Jurnal Penelitian Pendidikan Indonesia), 9(3), 1696–1704. https://doi.org/10.29210/020232924

Downloads

Published

2026-06-24

How to Cite

Yuliusman, Y., Putra, W. E., Olimsar, F., Maisyarah, N. D., & Dahmiri, D. (2026). Strategic Approaches to Enhancing Financial Performance: Financial Literacy and Social Capital as Pillars of Business Resilience Amid Global Economic Challenges. Greenation International Journal of Economics and Accounting, 4(2), 314–328. https://doi.org/10.38035/gijea.v4i2.857

Issue

Vol. 4 No. 2 (2026): Greenation International Journal of Economics and Accounting (May - June 2026)

Section

Articles

License

Copyright (c) 2026 Yuliusman Yuliusman, Wirmie Eka Putra, Fredy Olimsar, Nyimas Dian Maisyarah, Dahmiri Dahmiri

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright :

Authors who publish their manuscripts in this journal agree to the following conditions:

  1. Copyright in each article belongs to the author.
  2. The author acknowledges that the GIJEA has the right to be the first to publish under a Creative Commons Attribution 4.0 International license (Attribution 4.0 International CC BY 4.0).
  3. Authors can submit articles separately, arrange the non-exclusive distribution of manuscripts that have been published in this journal to other versions (for example, sent to the author's institutional repository, publication in a book, etc.), by acknowledging that the manuscript has been published for the first time at GIJEA.

Most read articles by the same author(s)