Transforming Financial Behavior of MSMEs in Medan through Adaptive Financial Planning

Transformasi Perilaku Keuangan UMKM Kota Medan melalui Perencanaan Keuangan yang Adaptif

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a strategic role in Indonesia’s economy but continue to face various challenges in financial management, particularly in developing sound financial behavior. This study aims to examine the effects of financial literacy and financial attitude on financial behavior among MSMEs, with financial planning as a mediating variable. This study employed a quantitative approach using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with the Embedded Two-Stage Approach to examine the multidimensional constructs. The results indicate that financial literacy and financial attitude have positive and significant effects on both financial planning and financial behavior. Financial planning also has a positive and significant effect on financial behavior. Furthermore, financial planning significantly mediates the effects of financial literacy and financial attitude on financial behavior. These findings indicate that financial knowledge and attitudes not only directly influence financial behavior but also need to be translated into systematic financial planning. Therefore, improving MSMEs’ financial behavior requires an integrated approach that strengthens financial literacy, financial attitudes, and financial planning capabilities to support more disciplined, rational, adaptive, and sustainable business financial management.