The Important Role of Financial Literacy in Starting a Business

JAKARTA, 25 September 2020 – Recently, many millennials have decided to open their own businesses after graduating from college. Moreover, in today’s digital era, with the massive amount of information circulating on the internet, it makes it easier for the millennial generation to do various things, including starting their own business.

However, often these new businesses that are built then fail within a short time because the level of financial literacy is still minimal. A minimal level of financial literacy, besides being able to cause poor business calculations, often also has a negative impact on personal financial conditions. This is due to a lack of information and insight that can improve the quality of decision making related to financial aspects.

One of the things that can be seen in the results of the 2019 National Survey of Financial Literacy and Inclusion (SNLIK) conducted by the Financial Services Authority (OJK) is that Indonesian people in general do not fully understand how to improve the quality of decision making and financial management in order to achieve prosperity. This can be seen from the financial literacy level index at OJK which reached 38.03%.

Financial literacy is a basic need for everyone, especially for those who want to start their own business and also avoid financial problems. This was emphasized by Ali Harahap, who is the young entrepreneur who founded Masalalu Cafe.

“To run your own business, whether small or large, you definitely need good financial management in order to create a sustainable business,” said Ali at the Financial Literacy & Entrepreneurship Webinar ‘Starting a Business in the Pandemic Period’, Friday (25/09/2020) which is the result of collaboration between Akulaku Finance Indonesia and Tarumanagara University.

Sharing a little about his experience when Ali started his coffee shop business from scratch, according to him, being an entrepreneur who starts a business from scratch is not very easy. Ups and downs in developing a business will definitely be felt at the beginning of starting a business. That’s where Ali emphasized that to increase business success, entrepreneurs must develop mental and personal abilities, apart from that, this must also be accompanied by thorough financial planning.

“At the start of building a business, we already form a team. There we have to think about being able to pay employee salaries. That’s where financial planning is important to maintain cash flow. “For two years I pushed myself to work harder to make a profit so I could pay my employees’ salaries,” he added.

According to Ali, it will be very dangerous for business owners if they are not good at managing finances. Even more so if you combine personal and business income.

In line with what Ali said, Akulaku Finance Indonesia Corporate Secretary Wildan Kesuma said that by having a good understanding of financial literacy, we can avoid detrimental things.

“The definition of financial literacy is knowledge, skills and beliefs that influence individual attitudes and behavior to improve the quality of decision making and financial management in order to achieve prosperity. “We must improve this aspect before starting to make decisions that could affect financial conditions,” said Wildan.

“As a digital-based financing company registered and supervised by the OJK, Akulaku Finance sees financial literacy as a very important understanding that the public must have. Maybe someone has read an investment case that offers a risk-free investment opportunity that promises very large profits? but in the end, many people suffered losses because it turned out that the institutions offering the investment products were not credible, the investment products being sold turned out to be fictitious. “If we have good financial literacy, we should be able to know how to avoid various investment offers that are not fictitious,” said Wildan.

Wildan added that understanding of financial literacy can be improved by reading articles about financial literacy in trusted news sources or articles. One of the most complete sources of information regarding financial literacy is the OJK’s educational site, namely