Volume 18, No. 6, 2021

The Impact Of Financial Literacy On Financial WellBeing Of Coffee Farmers In Central Java Indonesia

Intan Shaferi , Alisa Tri Nawarini , Rio Dhani Laksana


Indonesia has a majority of the population working in the informal sector, one of them is a farmers. This study aims to analyze the knowledge of farmers about finance or financial literacy that allows individuals to make effective decisions in finance. The variables used are financial literacy, income, financial behavior and financial wellbeing. The respondents are coffee farmers in Central Java area. The theory of planned behavior and the theory of life-span development are related to financial well-being, which is relatively rarely studied due to the use of individual coffee farmers. This literacy research can also be used as a benchmark in considering financial behavior, income, financial literacy, and financial attitudes to achieve family financial well-being in Indonesia, especially for coffee farmers. The research was conducted using Structural Equation Modeling (SEM). The results showed that financialoliteracy and income has positive effect on the well-being of coffee farmers in Central Java and financial behavior has negative effect on the well-being of coffee farmers in Central Java. In managing finances, only a small number of Central Java coffee farmers use financial institutions for both savings and loans. For loan funds in a certain and convincing amount, coffee farmers rely more on credit from friends or family. No more than 10% of farmers plan household expenditures and implement them consistently. This study also found a significant positive relationship between coffee farmers' knowledge of financial institutions and the level of use of financial institution products.

Pages: 3102-3109

Keywords: financial literacy, financial capital, financial behavior, well-being, coffee farmers.

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