Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304129 
Year of Publication: 
2023
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 11 [Issue:] 2 [Article No.:] 2230725 [Year:] 2023 [Pages:] 1-29
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This research aims to examine the mediating role of microfinance governance in the relationship between financial literacy and microfinance sustainability. The research used the purposive sampling method to collect data from the Women Farmers Group (WFG) "Tapa Walla Badi" in Mbatakapidu village, East Sumba, Indonesia. The survey was conducted from November through December 2021 with the valid sample for analysis was 200 questionnaires. The Partial Least Squares-Structural Equation Model (PLS-SEM) was used for analysis. The bootstrapping and the Sobel test were required for a better understanding of the findings. Robust test and focus group discussion (FGD) made our methodology more reliable. The findings show that financial literacy plays an important role in the transformation of rural microfinance institutions (MFIs). Financial literacy works positively on the sustainability of rural microfinance via governance. Age, gender, education, and employment situation were taken into account in financial literacy. This research provides a comprehensive view to policymakers in developing rural MFIs, thus implies the urgency to promote financial literacy and improve governance structures within MFIs. The local government may create pro-financial inclusion policies that support sustainable MFIs by implementing financial literacy curriculum in formal and non-formal education.
Subjects: 
financial literacy
financial literacy index
governance
microfinance sustainability
rural microfinance institutions
JEL: 
G21
G30
G53
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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