Title:
THE ROLE OF CULTURE, ACCESS TO FINANCING, AND FINANCIAL LITERACY ON MSME PERFORMANCE IN BANDA ACEH CITY AND ACEH BESAR REGENCY

Authors:
Aznita Zahara, Muhammad Adam and A. Sakir, Indonesia

Abstract:
The Micro, Small, and Medium Enterprises (MSME) sector makes a vital contribution to sustaining the regional economy, although it frequently runs into problems of internal governance as well as limited capital and assets. In certain areas, such as Banda Aceh City and Aceh Besar Regency, the optimization of MSME performance is not determined solely by technical, operational, and capital-related aspects, but is also shaped by the internalization of entrepreneurs' work ethic and culture. This study was designed to examine the effect of ease of access to financing and the level of financial literacy on business performance, while also investigating the position of the culture variable as a mediator within the research model. A quantitative approach was applied through the distribution of a questionnaire to 181 MSME actors as the research sample in both regions. Data processing was carried out using SEM-AMOS to evaluate the causal relationships among variables, complemented by an instrument reliability test and a one-sample t-test. The empirical findings confirm that the availability of financing and financial understanding each make a direct, significant, positive contribution to improving business performance. In addition, both factors are shown to strengthen the role of work culture within entrepreneurs themselves. Mediation testing confirms that culture acts as a partial mediator that amplifies the effect of financial access and literacy on MSME performance. This indicates that financial assistance and financial understanding will produce a maximum impact only when accompanied by the adoption of a resilient, professional, and highly disciplined entrepreneurial culture.