Unlocking Micro-Business Success in Sikka Regency

This study investigates the impact of financial literacy, financial inclusion, and financial behavior on the performance of micro-businesses in Sikka Regency, Indonesia, in light of the persistent challenges faced by micro-business operators, including limited financial knowledge, restricted access to financial services and poor financial management practices. The research objective is to examine the relationships among these financial factors and their influence on micro-business performance, introducing financial behavior as a moderating variable to provide deeper insights into its role. The study employs a quantitative research approach, utilizing a survey method with a structured questionnaire. The sample was determined using the Slovin formula with a 5% margin of error, resulting in a final sample size of 346 micro businesses drawn from a population of 2,536 micro businesses through five cooperatives. The results indicate that financial literacy has a significant positive effect on micro business performance, financial inclusion significantly enhances micro business performance, financial behavior plays a crucial role in improving micro business performance, financial literacy positively influences financial inclusion, financial inclusion mediates the relationship between financial literacy and micro business performance, and financial behavior moderates the relationship between financial literacy and micro business performance. This study contributes to the literature by confirming the necessity for integrated financial literacy and behavior training programs to enhance the sustainability of micro businesses.