Financial literacy and green finance: catalysts for green economic recovery in smes
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Abstract
This study examined the interplay of financial literacy and access to green finance in driving green economic recovery among small and medium enterprises in East Kalimantan, Indonesia, where resource dependence exacerbates environmental vulnerabilities. The core problem addressed was the sluggish adoption of sustainable business practices by these enterprises, hampered by insufficient financial acumen and constrained funding for eco-friendly initiatives. A quantitative survey approach was employed, gathering data from 150 enterprises across agriculture, trade, and services sectors through structured questionnaires. Partial least squares structural equation modeling analyzed the relationships, revealing that financial literacy exerted a strong positive effect on green practice adoption, while green finance access provided both direct and mediated support. Adoption of green practices fully mediated financial literacy's impact on recovery and partially mediated green finance's influence, collectively accounting for over half of the variance in economic and environmental outcomes. These findings underscored the synergistic potential of education and funding in bolstering resilience. Policymakers should prioritize integrated training and streamlined financing to accelerate sustainable transitions, fostering long-term viability in similar contexts.
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How to Cite
Kesuma, M. R., Irianto, E. D. O., Widaryo, C. M., Henrika, M., Ariswati, L. D., & Aini, R. N. (2025). Financial literacy and green finance: catalysts for green economic recovery in smes. Enrichment : Journal of Management, 15(4), 424-434. https://doi.org/10.35335/enrichment.v15i4.2377
References
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Bhattacharyya, A., & Khan, M. (2021). Financial Inclusion, Corporate Social Responsibility and Firm Performance – Analysis of Interactive Relationship. Meditari Accountancy Research. https://doi.org/10.1108/medar-12-2020-1121
Caldera, S., Desha, C., & Dawes, L. (2019). Evaluating the Enablers and Barriers for Successful Implementation of Sustainable Business Practice in ‘Lean’ SMEs. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.01.239
Deventer, M. van. (2020). African Generation Y Students’ Personal Finance Behavior and Knowledge. Investment Management and Financial Innovations. https://doi.org/10.21511/imfi.17(4).2020.13
Dewi, Y. (2025). The role of accounting in addressing climate change and promoting sustainable development of smes in indonesia. Eastasouth Journal of Effective Community Services, 3(03), 155-164. https://doi.org/10.58812/ejecs.v3i03.336
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Huong, D. T., & Anh, N. T. (2024). Factors Affecting Access to Finance for Small and Medium-Sized Agricultural Enterprises in Vietnam. Asian Economic and Financial Review. https://doi.org/10.55493/5002.v14i6.5079
Illmeyer, M., Grosch, D., Kittler, M., & Priess, P. (2017). The Impact of Financial Management on Innovation. Journal of Entrepreneurship and Sustainability Issues. https://doi.org/10.9770/jesi.2017.5.1(5)
Indrawati, H., Caska, C., Hermita, N., Sumarno, S., & Syahza, A. (2023). Green innovation adoption of smes in indonesia: what factors determine it?. International Journal of Innovation Science, 17(1), 19-37. https://doi.org/10.1108/ijis-02-2023-0047
Iswanti, I., Machmud, A., Ahman, E., & Suwardi, D. M. (2020). The Determinant of Green Entrepreneurial Knowledge on SMEs in Indonesia. JPBM (Jurnal Pendidikan Bisnis Dan Manajemen). https://doi.org/10.17977/um003v6i22020p099
Iwu, C. G., Opute, A. P., Aliyu, O. A., Eresia-Eke, C., Musikavanhu, T. B., & Jaiyeola, A. O. (2021). A Structural Equation Modelling Evaluation of Antecedents and Interconnections of Call Centre Agents’ Intention to Quit. Journal of Risk and Financial Management. https://doi.org/10.3390/jrfm14040179
Juana, D., Suryanto, R. K., & Haris, A. (2024). Financial literacy and financial management on access to financing for small and medium enterprises: moderation of securities crowdfunding. Indonesian Journal of Business Analytics, 4(3), 743-760. https://doi.org/10.55927/ijba.v4i3.9125
Kesuma, M. R., Henrika, M., & Ariswati, L. D. (2025). The Impact Of Capital Intensity On Financial Stability Of Energy Sector Companies In Indonesia. Journal of Financial Economics & Investment, 5(2), 115–127.
Khalegi, F., Kadyraliev, A., Tursunalieva, D., Orozbekov, A., & Bigali, A. (2024). Blockchain and Sustainable Finance: Enhancing Transparency and Efficiency in Green Investments. Scientific Bulletin of Mukachevo State University Series “Economics.” https://doi.org/10.52566/msu-econ3.2024.125
Kucharov, A., Sozinova, A. A., Popkova, E. G., Fomenко, N. М., Vorontsova, G. V, & Ostrovskaya, V. N. (2024). Integration of CSR Into the Marketing Mix for the Sustainable Development of Companies: A View From the Position of Financial Risk Management. Risks. https://doi.org/10.3390/risks12080121
Kurniasari, F., Lestari, E. D., & Tannady, H. (2023). Pursuing Long-Term Business Performance: Investigating the Effects of Financial and Technological Factors on Digital Adoption to Leverage SME Performance and Business Sustainability—Evidence From Indonesian SMEs in the Traditional Market. Sustainability. https://doi.org/10.3390/su151612668
Kusumawardhani, R., Ningrum, N. K., & Rinofah, R. (2023). Investigating Digital Financial Literacy and Its Impact on SMEs’ Performance: Evidence From Indonesia. International Journal of Professional Business Review. https://doi.org/10.26668/businessreview/2023.v8i12.4097
Metzker, Z., Hlawiczka, R., Tabaku, I., & Tung, H. T. (2023). The Influence of Selected Financial Factors on the Survival of SMES in V4 Countries. Investment Management and Financial Innovations. https://doi.org/10.21511/imfi.20(4).2023.36
Nkwinika, E., & Akinola, S. (2023). The Importance of Financial Management in Small and Medium-Sized Enterprises (SMEs): An Analysis of Challenges and Best Practices. Technology Audit and Production Reserves. https://doi.org/10.15587/2706-5448.2023.285749
Noja, G. G., Thalassinos, E., Cristea, M., & Grecu, I. M. (2021). The Interplay Between Board Characteristics, Financial Performance, and Risk Management Disclosure in the Financial Services Sector: New Empirical Evidence From Europe. Journal of Risk and Financial Management. https://doi.org/10.3390/jrfm14020079
Omowole, B. M., Olufemi-Phillips, A. Q., Ofodile, O. C., Eyo-Udo, N. L., & Ewim, S. E. (2024). Conceptualizing Green Business Practices in SMEs for Sustainable Development. International Journal of Management & Entrepreneurship Research. https://doi.org/10.51594/ijmer.v6i11.1719
Pizzi, S., Corbo, L., & Caputo, A. (2021). Fintech and smes sustainable business models: reflections and considerations for a circular economy. Journal of Cleaner Production, 281, 125217. https://doi.org/10.1016/j.jclepro.2020.125217
Poliaková, A., Hamarneh, I., Jibril, A. B., & Kicová, E. (2024). The Interconnections Between CSR, Financial Management, and Sustainability in Service Sector SMEs. Journal of Tourism and Services. https://doi.org/10.29036/jots.v15i29.873
Purwandani, J. A., & Michaud, G. (2021). What Are the Drivers and Barriers for Green Business Practice Adoption for SMEs? Environment Systems & Decisions. https://doi.org/10.1007/s10669-021-09821-3
Rožman, M., Tominc, P., & Milfelner, B. (2020). A comparative study using two sem techniques on different samples sizes for determining factors of older employee’s motivation and satisfaction. Sustainability, 12(6), 2189. https://doi.org/10.3390/su12062189
Siddik, A. B., Li, Y., & Rahman, M. N. (2023). The Role of Fintech in Circular Economy Practices to Improve Sustainability Performance: A Two-Staged SEM-ANN Approach. Environmental Science and Pollution Research. https://doi.org/10.1007/s11356-023-25576-7
Stucki, T. (2019). Which Firms Benefit From Investments in Green Energy Technologies? – The Effect of Energy Costs. Research Policy. https://doi.org/10.1016/j.respol.2018.09.010
Tillema, S., Trapp, R., & Veen-Dirks, P. M. G. Van. (2022). Business Partnering in Risk Management: A Resilience Perspective on Management Accountants’ Responses to a Role Change*. Contemporary Accounting Research. https://doi.org/10.1111/1911-3846.12774
Tóth, R., Kása, R., & Lentner, C. (2023). Validating the Financial Literacy Index of Hungarian SMEs During the COVID-19 Pandemic and the Russian–Ukrainian War. Risks. https://doi.org/10.3390/risks11040069
Ullah, R., Ahmad, H., Rehman, F. U., & Fawad, A. (2021). Green Innovation and Sustainable Development Goals in SMEs: The Moderating Role of Government Incentives. Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-07-2021-0122
Waruwu, D., Utama, I. G. B. R., Suryaningsi, S., Junaedi, I. W. R., & Asrianti, A. (2024). Empowering local communities in the development of the ibu kota nusantara (ikn) to increase economy in east kalimantan. Proceedings of Forum Manajemen Indonesia's International Conferences, (1), 1109-1125. https://doi.org/10.47747/fmiic.v1i1.2127
Wu, S., Chan, F. T. S., & Chung, S. H. (2021). A Study on Green Supply Chain Under Capital Constraint Considering Time-Varying Salvage Value. International Journal of Production Research. https://doi.org/10.1080/00207543.2021.1982153
Zheng, G.-W., Siddik, A. B., Masukujjaman, M., & Fatema, N. (2021). Factors Affecting the Sustainability Performance of Financial Institutions in Bangladesh: The Role of Green Finance. Sustainability. https://doi.org/10.3390/su131810165
Aini, R. N., Kesuma, M. R., Irianto, E. D. O., Henrika, M., & Ariswati, L. D. (2025). Exploring Academic Burnout: The Interplay of Time Pressure, Poor Sleep Habits, and Jam Koma Among Undergraduate Students in East Kalimantan. SOSMANIORA: Jurnal Ilmu Sosial Dan Humaniora, 4(3), 695–704.
Bhattacharyya, A., & Khan, M. (2021). Financial Inclusion, Corporate Social Responsibility and Firm Performance – Analysis of Interactive Relationship. Meditari Accountancy Research. https://doi.org/10.1108/medar-12-2020-1121
Caldera, S., Desha, C., & Dawes, L. (2019). Evaluating the Enablers and Barriers for Successful Implementation of Sustainable Business Practice in ‘Lean’ SMEs. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.01.239
Deventer, M. van. (2020). African Generation Y Students’ Personal Finance Behavior and Knowledge. Investment Management and Financial Innovations. https://doi.org/10.21511/imfi.17(4).2020.13
Dewi, Y. (2025). The role of accounting in addressing climate change and promoting sustainable development of smes in indonesia. Eastasouth Journal of Effective Community Services, 3(03), 155-164. https://doi.org/10.58812/ejecs.v3i03.336
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Huong, D. T., & Anh, N. T. (2024). Factors Affecting Access to Finance for Small and Medium-Sized Agricultural Enterprises in Vietnam. Asian Economic and Financial Review. https://doi.org/10.55493/5002.v14i6.5079
Illmeyer, M., Grosch, D., Kittler, M., & Priess, P. (2017). The Impact of Financial Management on Innovation. Journal of Entrepreneurship and Sustainability Issues. https://doi.org/10.9770/jesi.2017.5.1(5)
Indrawati, H., Caska, C., Hermita, N., Sumarno, S., & Syahza, A. (2023). Green innovation adoption of smes in indonesia: what factors determine it?. International Journal of Innovation Science, 17(1), 19-37. https://doi.org/10.1108/ijis-02-2023-0047
Iswanti, I., Machmud, A., Ahman, E., & Suwardi, D. M. (2020). The Determinant of Green Entrepreneurial Knowledge on SMEs in Indonesia. JPBM (Jurnal Pendidikan Bisnis Dan Manajemen). https://doi.org/10.17977/um003v6i22020p099
Iwu, C. G., Opute, A. P., Aliyu, O. A., Eresia-Eke, C., Musikavanhu, T. B., & Jaiyeola, A. O. (2021). A Structural Equation Modelling Evaluation of Antecedents and Interconnections of Call Centre Agents’ Intention to Quit. Journal of Risk and Financial Management. https://doi.org/10.3390/jrfm14040179
Juana, D., Suryanto, R. K., & Haris, A. (2024). Financial literacy and financial management on access to financing for small and medium enterprises: moderation of securities crowdfunding. Indonesian Journal of Business Analytics, 4(3), 743-760. https://doi.org/10.55927/ijba.v4i3.9125
Kesuma, M. R., Henrika, M., & Ariswati, L. D. (2025). The Impact Of Capital Intensity On Financial Stability Of Energy Sector Companies In Indonesia. Journal of Financial Economics & Investment, 5(2), 115–127.
Khalegi, F., Kadyraliev, A., Tursunalieva, D., Orozbekov, A., & Bigali, A. (2024). Blockchain and Sustainable Finance: Enhancing Transparency and Efficiency in Green Investments. Scientific Bulletin of Mukachevo State University Series “Economics.” https://doi.org/10.52566/msu-econ3.2024.125
Kucharov, A., Sozinova, A. A., Popkova, E. G., Fomenко, N. М., Vorontsova, G. V, & Ostrovskaya, V. N. (2024). Integration of CSR Into the Marketing Mix for the Sustainable Development of Companies: A View From the Position of Financial Risk Management. Risks. https://doi.org/10.3390/risks12080121
Kurniasari, F., Lestari, E. D., & Tannady, H. (2023). Pursuing Long-Term Business Performance: Investigating the Effects of Financial and Technological Factors on Digital Adoption to Leverage SME Performance and Business Sustainability—Evidence From Indonesian SMEs in the Traditional Market. Sustainability. https://doi.org/10.3390/su151612668
Kusumawardhani, R., Ningrum, N. K., & Rinofah, R. (2023). Investigating Digital Financial Literacy and Its Impact on SMEs’ Performance: Evidence From Indonesia. International Journal of Professional Business Review. https://doi.org/10.26668/businessreview/2023.v8i12.4097
Metzker, Z., Hlawiczka, R., Tabaku, I., & Tung, H. T. (2023). The Influence of Selected Financial Factors on the Survival of SMES in V4 Countries. Investment Management and Financial Innovations. https://doi.org/10.21511/imfi.20(4).2023.36
Nkwinika, E., & Akinola, S. (2023). The Importance of Financial Management in Small and Medium-Sized Enterprises (SMEs): An Analysis of Challenges and Best Practices. Technology Audit and Production Reserves. https://doi.org/10.15587/2706-5448.2023.285749
Noja, G. G., Thalassinos, E., Cristea, M., & Grecu, I. M. (2021). The Interplay Between Board Characteristics, Financial Performance, and Risk Management Disclosure in the Financial Services Sector: New Empirical Evidence From Europe. Journal of Risk and Financial Management. https://doi.org/10.3390/jrfm14020079
Omowole, B. M., Olufemi-Phillips, A. Q., Ofodile, O. C., Eyo-Udo, N. L., & Ewim, S. E. (2024). Conceptualizing Green Business Practices in SMEs for Sustainable Development. International Journal of Management & Entrepreneurship Research. https://doi.org/10.51594/ijmer.v6i11.1719
Pizzi, S., Corbo, L., & Caputo, A. (2021). Fintech and smes sustainable business models: reflections and considerations for a circular economy. Journal of Cleaner Production, 281, 125217. https://doi.org/10.1016/j.jclepro.2020.125217
Poliaková, A., Hamarneh, I., Jibril, A. B., & Kicová, E. (2024). The Interconnections Between CSR, Financial Management, and Sustainability in Service Sector SMEs. Journal of Tourism and Services. https://doi.org/10.29036/jots.v15i29.873
Purwandani, J. A., & Michaud, G. (2021). What Are the Drivers and Barriers for Green Business Practice Adoption for SMEs? Environment Systems & Decisions. https://doi.org/10.1007/s10669-021-09821-3
Rožman, M., Tominc, P., & Milfelner, B. (2020). A comparative study using two sem techniques on different samples sizes for determining factors of older employee’s motivation and satisfaction. Sustainability, 12(6), 2189. https://doi.org/10.3390/su12062189
Siddik, A. B., Li, Y., & Rahman, M. N. (2023). The Role of Fintech in Circular Economy Practices to Improve Sustainability Performance: A Two-Staged SEM-ANN Approach. Environmental Science and Pollution Research. https://doi.org/10.1007/s11356-023-25576-7
Stucki, T. (2019). Which Firms Benefit From Investments in Green Energy Technologies? – The Effect of Energy Costs. Research Policy. https://doi.org/10.1016/j.respol.2018.09.010
Tillema, S., Trapp, R., & Veen-Dirks, P. M. G. Van. (2022). Business Partnering in Risk Management: A Resilience Perspective on Management Accountants’ Responses to a Role Change*. Contemporary Accounting Research. https://doi.org/10.1111/1911-3846.12774
Tóth, R., Kása, R., & Lentner, C. (2023). Validating the Financial Literacy Index of Hungarian SMEs During the COVID-19 Pandemic and the Russian–Ukrainian War. Risks. https://doi.org/10.3390/risks11040069
Ullah, R., Ahmad, H., Rehman, F. U., & Fawad, A. (2021). Green Innovation and Sustainable Development Goals in SMEs: The Moderating Role of Government Incentives. Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-07-2021-0122
Waruwu, D., Utama, I. G. B. R., Suryaningsi, S., Junaedi, I. W. R., & Asrianti, A. (2024). Empowering local communities in the development of the ibu kota nusantara (ikn) to increase economy in east kalimantan. Proceedings of Forum Manajemen Indonesia's International Conferences, (1), 1109-1125. https://doi.org/10.47747/fmiic.v1i1.2127
Wu, S., Chan, F. T. S., & Chung, S. H. (2021). A Study on Green Supply Chain Under Capital Constraint Considering Time-Varying Salvage Value. International Journal of Production Research. https://doi.org/10.1080/00207543.2021.1982153
Zheng, G.-W., Siddik, A. B., Masukujjaman, M., & Fatema, N. (2021). Factors Affecting the Sustainability Performance of Financial Institutions in Bangladesh: The Role of Green Finance. Sustainability. https://doi.org/10.3390/su131810165