Building Sustainable Performance of MSMEs through Financial Management Capabilities and Sustainable Business Model

The research explores the impact of financial knowledge and competences on the viability of small businesses in Central Java, Indonesia. Through a survey-based approach involving 350 small business proprietors, the study The acquired data was analyzed Using structural equation modeling (SEM). The results indicate that sustainability in the environment, monetary sustainability, and social responsibility greatly contribute to the sustainability of small businesses in Central Java. Moreover, the study reveals a positive impact of financial literacy and capabilities practices on firm sustainability. However, using savings products exhibits a notable adverse effect on firm sustainability. These findings underscore the importance of integrating sustainability models into small business operations and enhancing financial knowledge among proprietors to ensure sustainability. Additionally, the research suggests that small business owners should make informed decisions regarding investment products that align with their risk tolerance when considering savings allocation.