Financial Literacy and Business Sustainability Among Msmes in Denpasar City: the Mediating Role of Access to Financial Services

Abstract

This study examines the impact of financial literacy on business sustainability, with access to financial services serving as a mediating variable, among MSMEs in Denpasar City. An exploratory quantitative approach was employed. Primary data were collected via questionnaires distributed to 300 MSME business owners—using a 5-point Likert scale—and analyzed by the Partial Least Squares-Structural Equation Modelling (PLS-SEM) method with SmartPLS 4.0 software. The results indicate that financial literacy has a positive and significant influence on both business sustainability and access to financial services. Access to financial services was also found to have a positive and significant impact on business sustainability. Furthermore, the analysis of indirect effects demonstrates that access to financial services mediates the relationship between financial literacy and business sustainability. These findings suggest that enhancing financial literacy among business owners, supported by easy access to financial services, can improve and strengthen the long-term viability of MSMEs. From a practical perspective, this study provides MSME owners and stakeholders with insight into how financial literacy education and expanded access to financial services are fundamental factors in fostering MSME growth in Denpasar City.