THE AWARENESS OF SOCIETY TO FINANCIAL LITERACY
IN THE REMOTE AREA
(Case Study: Tanjung Putri Village, Arut Selatan District, West
Kotawaringin Regency, Central Kalimantan)
KESADARAN MASYARAKAT TERHADAP MELEK
KEUANGAN DI DAERAH TERPENCIL
(Studi Kasus: Desa Tanjung Putri, Kecamatan Arut Selatan,
Kabupaten Kotawaringin Barat, Kalimantan Tengah)
Written by:
Alfina Rahmatia
20130430031
FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS MUHAMMADIYAH YOGYAKARTA
i
THE AWARENESS OF SOCIETY TO FINANCIAL LITERACY
IN THE REMOTE AREA
(Case Study: Tanjung Putri Village, District South Arut, West
Kotawaringin Regency, Central Kalimantan)
KESADARAN MASYARAKAT TERHADAP MELEK
KEUANGAN DI DAERAH TERPENCIL
(Studi Kasus: Desa Tanjung Putri, Kecamatan Arut Selatan,
Kabupaten Kotawaringin Barat, Kalimantan Tengah)
UNDEGRADUATE THESIS
In partial fulfillment for the requirement for the degree of Bachelor of
Economics (Sarjana Ekonomi) at International Program for Islamic
Economics and Finance (IPIEF), Economics and Business Department
Written by:
Alfina Rahmatia
20130430031
FACULTY OF ECONOMICS
ii
THE AWARENESS OF SOCIETY TO FINANCIAL LITERACY
IN THE REMOTE AREA
(Case Study: Tanjung Putri Village, District South Arut, West
Kotawaringin Regency, Central Kalimantan)
KESADARAN MASYARAKAT TERHADAP MELEK
KEUANGAN DI DAERAH TERPENCIL
(Studi Kasus: Desa Tanjung Putri, Kecamatan Arut Selatan,
Kabupaten Kotawaringin Barat, Kalimantan Tengah)
UNDEGRADUATE THESIS
In partial fulfillment for the requirement for the degree of Bachelor of
Economics (Sarjana Ekonomi) at International Program for Islamic
Economics and Finance (IPIEF), Economics and Business Department
Written by:
Alfina Rahmatia
20130430031
FACULTY OF ECONOMICS
iv
THE AWARENESS OF SOCIETY TO FINANCIAL LITERACY IN THE REMOTE AREA
(Case Study: Tanjung Putri Village, Arut Selatan District, West Kotawaringin Regency, Central Kalimantan)
KESADARAN MASYARAKAT TERHADAP MELEK KEUANGAN DI DAERAH TERPENCIL
(Studi Kasus: Desa Tanjung Putri, Kecamatan Arut Selatan, Kabupaten Kotawaringin Barat, Kalimantan Tengah)
Written by: Alfina Rahmatia
20130430031
This thesis has been reviewed and validated before the Examination comitte of International Program for Islamic Economic and Finance (IPIEF) Economic Faculty Muhammadiyah University of Yogyakarta
Date: April, 22nd 2017 The Examination Comittee
Agus Tri Basuki, S.E., M.Si. Chief Examiner
Ayif Fathurrahman, S.E., M.Si. Co-Examiner
Dyah Titis Kusuma Wardani, S.E., MIDEc. Co-Examiner
Approved by
Dean of Economics and Business Faculty Universitas Muhammadiyah Yogyakarta
v
DECLARATION
Name : Alfina Rahmatia
Student Number : 20130430031
I declare that this thesis entitled “THE AWARENESS OF SOCIETY TO
FINANCIAL LITERACY IN THE REMOTE AREA (Case Study: Tanjung
Putri Village, District South Arut, West Kotawaringin Regency, Central
Kalimantan)” is consideration of the award of a bachelor degree is my own
personal effort. Where any of content presented is the result of input input or data
from a related collaborative research program this is duly acknowledged in the
text such that it is possible to ascertain how much of the work is my own.
Furthermore, I took reasonable care to ensure that the work is original, and to the
best of my knowledge, does not breach copyright law, and has not been taken
from other sources except where such work has been cited and acknowledged
within the text.
Yogyakarta, 28 February 2017
vi
MOTTO
“Don’
t cry because of what you lost, smile
because of what you learned
.”
“Every soul is held in pledge for what it earns.”
vii
ABSTRAK
Tujuan dari penelitian ini adalah untuk mengetahui tingkat kesadaran masyarakat
terhadap melek keuangan di daerah terpencil, dengan studi kasus di Desa Tanjung
Putri. Data yang digunakan adalah data primer. Data diperoleh dari penyebaran
kuesioner dan wawancara. Analisis data yang digunakan adalah Regresi Logistik
Biner dengan menggunakan aplikasi SPSS, sedangkan pada analisis data
wawancara adalah menggunakan analisis deskripsi. Hasil penelitian menunjukkan
bahwa jenis kelamin, pendapatan perbulan, dan latar belakang pendidikan tidak
berpengaruh positif secara signifikan terhadap tingkat kesadaran masyarakat
terhadap melek keuangan di Desa Tanjung Putri. Hal tersebut terjadi karena faktor
pengalaman penduduk pada masa lalu tentang melek keuangan.
viii ABSTRACT
The main objective of this study is to identify and analyze the awareness level to
financial literacy in the remote area, with a case study in Tanjung Putri Village.
Primary datas used in this study are collected from questionare and interview. The
study uses binary logistic regression using SPSS aplication, whereas the interview
datas use descriptive analysis. The result shows that gender, income per-month
and education backgroud has no positive significant effect to the awareness level
of financial literacy in Tanjung Putri Village society. These are happens because
of the past experience about financial literacy.
.
ix PREFACE
Bismillahirrahmanirrahim
Assalamu’alaikum wa rahmatullahi wa barakatuh.
Alhamdulillah, praise and thanks to Allah Subhanahu wa ta’ala for
blessing the writer with health and joy for finally finishing this minor thesis.
Shalawat and Salam to Muhammad Rasulullah Shallallahu Alaihi wa Salam,
hopefully His syafa’at will be abundant in days later. This minor thesis entitled
“The Awareness Of Society To Financial Literacy In The Remote Area (Case
Study: Tanjung Putri Village, District South Arut, West Kotawaringin Regency,
Central Kalimantan)” has made to submitted as partial fulfillment to achieve
bachelor degree of economics, focusing on Islamic economics and finance. The
writing process of this undergraduate thesis has involved directly and indirectly
many people and parties that the author would like to express gratitude to all
people and parties below:
1. My family, especially for my parents; Arliansyah and Muslimah, and
my beloved little brother who have educated me and give motivation,
pray for me and love me.
2. Bapak Agus Tri Basuki and Ibu Yuli Utami as my undergraduate
thesis advisor who has provided guidance and suggestions to author
since the beginning of the study until the completion of this thesis
x
3. Bapak Masyhudi Muqorobin (Alm) as a lecture as well as father while
I am become an econimics student and Head of International Program
for Islamic Economics and Finance who has give me many
motivations and suggestions to be a great student.
4. The entire Lecturer and Staff in International Program for Islamic
Economics and Finance for all of knowledge given to the author in
which these knowledge really help the author in doing the research.
Hopefully this knowledge may be beneficial for human being.
5. My friends in college, especially entire friend in IPIEF. Thank you for
the togetherness we have been through. Especially by beloved best
friends: Fuzna Raisa Maharani and Sindi Siti Fatimah Z.
6. My Proyek Ekspedisi Nusantara friends, in particulary Biting girls;
Anisa Putri Nabila, Woro Endah Palupi and Amira Daneswari. Thank
you for all the lol. Thank you for all the laughter we shared. And thank
you for everythings.
In addition to people above, there are other people and parties, which gave
much supports and helps during the making of this undergraduate thesis, but the
author could not mention one by one. However, the author, by this chance would
like to say thank you and send best regards to all unstated parties for the hopes
that God will bless all the mentioned and unmentioned parties of their kindness.
Finally, the author believes that this undergraduate thesis is not perfect yet, hence,
xi
and lead this undergraduate thesis into a better one. Hopefully, this undergraduate
thesis would be useful in enriching the knowledge of all reader. Amin.
Wassalamu’alaikum
Yogyakarta, 24 Februari 2017
xii
TABLE OF CONTENTS
TITLE PAGE... ii
PAGE OF RATIFICATION ... iii
PAGE OF RATIFICATION ... iv
PAGE OF DECLARATION... v
MOTTO... vi
ABSTRAK ...vii
ABSTRACT...viii
PREFACE ...xi
TABLE OF CONTENT ...xiii
LIST OF TABLE ... xiv
LIST OF FIGURE AND PICTURE... xv
CHAPTER I. INTRODUCTION A. Background...1
B. Research Questions...5
C. Research Objectives ...6
D. Research Benefits ...6
E. Problem Limitation...7
CHAPTER II. LITERATURE REVIEW A. Theoretical Framework...8
1. Society Awareness...8
2. Financial Knowledge ...10
3. Financial Literacy...13
4. Remote Areas...18
B. Previous Research...18
C. Hypotheses...22
D. Research Framework ...23
CHAPTER III. DATA AND RESEARCH METHODOLOGY A. Source and Method...24
B. Data Collection Techniques...24
C. Operational Definition of Research Variable...29
D. Instrument Research Test ...30
E. Data Analysis ...31
F. Classic Assumption Test...37
CHAPTER IV. OVERVIEW A. South Arut Subdistrict Overview...39
B. Tanjung Putri Village Overview ...42
C. Respondent Characteristic ...44
CHAPTER V. RESULT AND ANALYSIS A. Instrument Research Test ...47
B. Regression Analysis ...48
C. Classic Assumption Test Result ...52
D. Index Formula Percent...53
xiii
CHAPTER VI. CONCLUSION AND RECOMMENDATION
A. Conclusion...67 B. Suggestion ...68 B. Research Limitation...70 BIBLIOGRAPHY
xiv
LIST OF TABLE
2.1. Financial Literacy: A Country-by-Country Breakdown...16
3.1. Criteria of Reliablity Coefficient Based on Guilford...31
3.2. Weight Value Table...33
3.3. Percentage Value Table...33
4.1. List of Village and RT in Tanjung Putri Village...42
4.2. Respondent Based on Age and Gender...45
4.3. Respondent Based on Income per-Month...45
4.4. Respondent Based on Education Background...46
5.1. Validity Test Result...46
5.2. Reliability Test Result...48
5.3. Case Processing Summary...48
5.4. Dependent Variable Encoding...49
5.5. Iteration History...49
5.6. Omnibus Test of Model Coefficients...50
5.7. Classification Table...50
5.8. Model Summary Result...50
5.9. Hosmer and Lemeshow Test Result...51
5.10. Variable in The Equation...51
5.11. Heterokedastisity Test Result...51
xv
LIST OF FIGURE AND PICTURE
ABSTRAK
Tujuan dari penelitian ini adalah untuk mengetahui tingkat kesadaran masyarakat
terhadap melek keuangan di daerah terpencil, dengan studi kasus di Desa Tanjung
Putri. Data yang digunakan adalah data primer. Data diperoleh dari penyebaran
kuesioner dan wawancara. Analisis data yang digunakan adalah Regresi Logistik
Biner dengan menggunakan aplikasi SPSS, sedangkan pada analisis data
wawancara adalah menggunakan analisis deskripsi. Hasil penelitian menunjukkan
bahwa jenis kelamin, pendapatan perbulan, dan latar belakang pendidikan tidak
berpengaruh positif secara signifikan terhadap tingkat kesadaran masyarakat
terhadap melek keuangan di Desa Tanjung Putri. Hal tersebut terjadi karena faktor
pengalaman penduduk pada masa lalu tentang melek keuangan.
ABSTRACT
The main objective of this study is to identify and analyze the awareness level to
financial literacy in the remote area, with a case study in Tanjung Putri Village.
Primary datas used in this study are collected from questionare and interview. The
study uses binary logistic regression using SPSS aplication, whereas the interview
datas use descriptive analysis. The result shows that gender, income per-month
and education backgroud has no positive significant effect to the awareness level
of financial literacy in Tanjung Putri Village society. These are happens because
of the past experience about financial literacy.
.
1 CHAPTER I
INTRODUCTION
A. Background
Financial inclusive terms has been discussed in Indonesia since 2008 after
the economic crisis that occurred in Indonesia. The definition of financial
inclusive itself does not exist yet, though various institutions try to define it. One
of them is from the Reserve Bank of India (RBI) which propose the definition for
it is the process of ensuring access to appropriate financial products and services
needed by all sections of the society in general and vulnerable groups such as
weaker sections and low income groups in particular at an affordable cost in a fair
and transparent manner by regulated mainstream institutional players.
In Indonesia, an the financial inclusive policies have been drafted in the
2016 Regulation Financial Services Authority in 2016 on the chapter improving
literacy and financial inclusion in the financial services sector to consumers and or
community. In Chapter one, article 1, on seventh paragraph, says that financial
inclusive is the availability of access for the public to take advantage of the
products and or financial services in the financial services institutions according
to the needs and capabilities in order to realize prosperity.
According to the data obtained from the World Bank in 2012, financial
inclusives today grow rapidly, for it has a link to the poverty and social
phenomena in the financial sector. Fifty two percent of the entire population has
2
percent are underserved poor. There are about one third of population completely
have no savings, and bank credit financed seventeen percent of the population,
while the Micro Finance Institutions only reach them for ten percent.
In developing financial inclusive, Financial Services Authority and Bank
Indonesia have an important role inside. That is why the national strategy for the
development of financial inclusive is held. It aims to encourage better
coordination, to continue and expand existing initiatives, identify the obstacles,
commit and encourage breakthroughs (DPAK, 2014). Similarly, the Bank
Indonesia socializes financial inclusive program, establishes cooperation with
relevant stakeholders outside Bank Indonesia, implements financial inclusive
activities, and evaluates program of financial inclusive activities (Ibid, 2014).
Based on the strategies described above which knowledge of financial
inclusive is still very low in the communit and it needs to be improved. By doing
so, the conducted training assistance to the output quality can be maintained.
Besides holding training program, which is socialization, local governments also
need to cooperate with the banks and the Financial Services Authority to expand
the access of society financial services (Ma'ruf & Desiyana, 2015).
In the development of financial inclusive solutions proposed on the study
above, besides holding socialization and ongoing training programs, there is more
concrete solution that is to expand the access of society financial services. To
expand the access of society financial services, it is necessary to build a financial
3
bank itself have two types, that are conventional and Islamic. The difference of
these two types is each of them has its own foundation and procedur.
The presence of Islamic system in the financial institution gives a new
color and new shades. Islamic economic system is present at a crossroads, and
shows its existence among the secular former economic systems (Muqorobin,
2008). The economic crisis in Indonesia on 1998 can be an evidence, when all the
conventional banks were bankrupt and even suffered from economic downturn,
banks with the Islamic system stayed firm without being effected by the crisis.
This incident drew public attention, even until now. FSA head of department of
Islamic Banking, Ahmad Buchori, said that the development of Islamic banking in
2016 increased better than 2015. Besides the historical factors, another thing that
makes islamic economic system became the center of attention at this time is a
characteristic that is offered in the Islamic economic system itself, such as the
sharing system that removes interest. Interest often becomes fear for lenders of
capital since those who are rich get richer and the poor get poorer.
In this globalization era, which is full of development, of course, many
systems are in growth, where the old systems will be replaced by the new systems.
Since there are many products are offered, the human desire are increased as well.
For this reason, mostly human buy something regardless the necessity but desire.
This will have an impact on the financial system on the individual. Such as
financial management in the form of income and expenditure, the amount of
savings and consumption, investments and accounts receivable, and others. The
4
Talking about financial inclusive, it is closely related to financial literacy.
Financial literacy does not exist in any subjects within all levels of education in
Indonesia, whereas it is considered important. Therefore, a person's education
does not guarantee the persons skill in planning and managing his finances.
According to Robert T. Kiyosaki, financial literacy is a basic ability to read and
understand financial statements and to control cash flow (cash flow). Each person
should know how the financial planning of the income he has. One of the part is
to know the income and outcome, as well as to avoid unexpected things in the
future. These unexpected things, such as early retirement or bad debt. Many
people have to realized the importance of financial literacy, but still lack of
knowledge and understanding of how to plan and manage both personal and
household finances.
In this study, the researcher will conduct case study in the Tanjung Putri
village, Arut Selatan District, West Kotawaringin regency, Central Kalimantan.
Tanjung Putri is one of the remote areas decided by the government of West
Kotawaringin regency. Tanjung Putri is far away from the central government, it
has lack of existing financial institutions. As it was broadcasted in Borneo-News,
there are eight villages that are still left behind in all aspects, such as
infrastructure, education and healthcare, including financial aspect were many
moneylenders are still in high number, which cause the society prefere to get loan
from moneylenders rather that corporation. Such event shows that financial
literacy level in Tanjung Putri is still low. In this case, the Islamic financial
5
applied in Islamic economic make a person wiser in selecting a financial products
(Ahmad, 2010).
Indonesia with an area of 1,905 km2 certainly has numerous obstacles in
spreading welfare, in terms of facilities, education, hospitals, financial institutions,
and so on. Therefore, it is undeniable that this becomes our duty to make a change
and progress for our country. Likewise what the researcher will do, that is to
conduct a research in one of the remote areas in Indonesia.
Based on the elaboration above, as an effort to introduce Islamic financial
institutions to support financial literacy in Indonesia, of course, it is not
immediately socialized or established, such as BMT (Baitul Maal wa Tamwil).
However, the researcher will examine the level of financial literacy; low, medium,
or high. For this reason, in this study, the researcher chooses the title “The
Awareness of Society on Financial Literacy in The Remote Area, with a case
study in Tanjung Putri Village, Arut Selatan District, West Kotawaringin
Regency, Central Kalimantan”.
B. Research Questions
1. How is the influence of gender to the awareness level of society in
Tanjung Putri village on financial literacy?
2. How is the influence of education background to the awareness level of
society in Tanjung Putri village on financial literacy?
3. How is the influence of income to the awareness level of society in
6
C. Research Objectives
Based on the problems above, the purpose of this study is to determine:
1. The effect of gender to the awareness level of society in Tanjung Putri
village on financial literacy.
2. The effect of education background to the awareness level of society in
Tanjung Putri village on financial literacy.
3. The effect of income to the awareness level of society in Tanjung Putri
village on financial literacy.
D. Research Benefits
This study is expected to be beneficial for:
1. For other researchers or scientists, since this study can be served as a
reference to determine the economic development in Indonesia,
particularly in the financial areas, which is financial literacy. In
addition, this study can be used as a comparison for similar studies
under the same title.
2. For the community, for this research can be a source of reading
material for society and are able to increase knowledge and awareness
to financial literacy.
3. For the government and relevant institutions, due this study may be a
become a source of information, particularly the institutions that
7
consideration in determining the policy and strategy for the economic
progress in Indonesia.
E. Problem Limitation
Talking about financial inclusive, it is closely related to financial literacy.
This study only focuses on society awareness to financial literacy. The scope of
this study is limited by taking case study in remote areas, which is in the Tanjung
Putri village, Arut Selatan District, West Kotawaringin Regency, Central
1 CHAPTER II
LITERATURE REVIEW
A.Theoretical Framework
1. Society Awareness
Society awareness is related to the field of sociology. According to
Indonesian Big Dictionary (KBBI, 2016). Consciousness is a feeling; to
know and understand, while awareness is the conviction; understand the
circumstances. In elaboration, environmental awareness is a deep
understanding of a person or group in ideas, attitudes, and behaviors that
support the evironmental development. Social awareness is the awareness of
person’s rights and obligations as a complete member of society.
Many experts present a theory of awareness, including the Carl G Jung
and Freud Sigmund. According to Carl Gustav Jung (Ismail, 2009),
awareness consists of three interconnected systems, there are consciousness
or ego, personal unconsciousness and collective unconsciousness.
Meanwhile, according to Freud (Clancy, 2008), awareness is composed of
conscious mind and unconscious mind, both of these are driven by the
motivation and encouragement from inside or outside of the individual.
Including the theories about society, many experts from the field of
sociology describe the theory of society. One of them is Soerjono Soekanto.
According to Soerjono Soekanto (Soekanto, 2003), in general, society has
2
People who live together; consisting of at least two people.
Mingling or commune in the long period of time.
By gathering, human will generate new human being, as a result of
living together, arising communications systems and regulating a
relationship among humans.
Being aware of their entity and unity.
It is a system of living together. The system of living together raises a
cultural because they feel they have a relation to each another.
Meanwhile, according to Paul B. Horton (Muin, 2013), definition of
society is a collection of relatively independent human by living together in
quite long time, inhabiting in certain area with a same culture, activities of
the group are similar.
From several theories described by some experts above, it can be
concluded that community is a group of individuals which are living in a
same place with the culture of their own, and they have interconnection to
each others. It also can be concluded that society awareness is an
understanding of condition of the group of individuals who have
interconnection and the same culture, and it is manifested in a form of
3
2. Financial Knowledge
According to Pudjawidjana (2015), knowledge as a humans reaction with
all the stimuli that happen to sense a particular object. Knowledge is a
process that occurs after stimulation of curiosity from the human senses,
such as sight and hearing. The level of knowledge is divided into five;
know, comprehension, application, analysis and evaluation (Notoatmodjo,
2013).
a. Know
Know is interpreted as consideration of a material that is studied
previously, including knowledge. This level is the recall to something
specific of all the materials studied or stimulated that have been received.
Know is the lowest level of knowledge. The verb to measure are
mentioning, describing, identifying, expressing and so on.
b. Comprehension
Understanding is defined as an ability to explain properly about the
object known and can correctly interpreted. A person who has
comprehended to the object or material must be able to explaining, citing
examples, predicting, and so on.
c. Application
The application is defined as an ability to use material that has been
4
d. Analysis
Analysis is the ability to describe the material or an object into
components, but still within an organizational structure, and are still
related to each others.
e. Evaluation
Evaluation relates to the ability on conducting the justification or a
material or an object. This assessment is based on existing criteria.
Every person has a different knowledge, knowledge is not innate, but
getting after a journey of age. Knowledge is related to education.
According to Indonesian Big Dictionary (Department, 2016), word
education or “pendidikan” comes from the word "didik" (educate) to get
the suffix "pe" and the suffix "an", which means the way, the process or
the act of educating.
According to Prof. H. Mahmud Yunus (Yunus, 1990), referred
education is an effort that is deliberately chosen to influence and help
children aimed to improving science, physical and morals, so they could
deliver the children to reach their dreams in order to get a happiness in
life and make a good impact to ourselves, society, state and religion.
According to Indonesian Big Dictionary (Department, 2016),
education is a learning process for each individual to achieve knowledge
and a higher understanding of the particular and specific objects. The
5
to have the mindset, behavior, and morals in accordance with the
education obtained.
Meanwhile, according to Ki Hajar Dewantara (Pamungkas, 2012). He
said education is a growing demand in the lives of children. It means that
education leads all forces of nature that exist in human beings and society
can reach salvation and high joy of life.
From the description above, it can be concluded by the researcher that
knowledge is a stage and process for every person, starting from know until
evaluation where in the process of knowledge that can be assisted and
accompanied by education. Education will increase knowledge of every
person to achieve happiness in life and a better future.
Financial knowledge can improve the ability to manage and organize
individual finances for well-being at that time and the future. Money is used
mostly to solve the problems in which it is associated with primitive barter
items, namely the aforementioned double coincidence of wants,
indivisibility of goods and services and the lack of a unit of account.
Accordingly, the most important functions of money are to serve as a unit of
account and medium of exchange. However, Depending on what is being
used as money, it could serve as a store of value and standard of deferred
payment (ISRA, 2012).
Muhammad Syafi’i Antonio as an Islamic Economist said that money
has close connection with the bank. In the financial knowledge, people can
6
understands about financial instruments in a bank. Bank is an essential
intermediary institutions between savers and investors. Savings will only be
useful if it is invested, while savers can not be expected to do it by
themselves with their skill. Customers want to save their money in the bank
because they believed that the bank may choose an attractive alternative
investment (Antonio, 2001).
From the description above about knowledge and finance, someone can
be said has financial knowledge when he has the knowledge and confidence
in financial services institutions and financial service products, including
features, benefits and risks, rights and obligations related to financial
products and services, and has skills in using financial products and
services.
3. Financial Literacy
Financial literacy means being able to read and understand financial
products. Financial literacy is characterized by the ability to distinguish the
financial statements that are owned by rich people and owned by poor and
middle class. People who understand financial literacy should understand at
least two forms of financial statements, cash flow and assets (property)
(Wiharto, 2010).
Cash flow consists of income and expenditure, whereas wealth consist
of assets and liabilities. Income includes salary, royalties, interest and any
incomes. Expenditure covers all living expenses and family expenses, and
7
lead to income of cash flow. These assets include people nearby who share
the burden of the family, home/car rent, royalties from invention, stock
dividends, bank interest, and so on. Liability is all obligations that still
burden and cause a cash flow expenditure. Treasure liabilities include
mortgages, car payments, payment of dues, the annual retirement fund,
liability of family living expenses, and so on (Wiharto, 2010).
The implementation of education in order to improve the society
financial literacy is necessary because according to a survey conducted by
the FSA in 2013, that the level of financial literacy of Indonesia population
is divided into four parts, namely:
1. Well literate (21,84%), who have the knowledge and confidence in
financial services institutions and financial services products, including
features, benefits and risks, rights and obligations which are related to
financial products and services, and have skills in using financial
products and services.
2. Sufficient literate (75,69%), have the knowledge and confidence in
financial services institutions and financial products and services,
including features, benefits and risks, rights and obligations which are
related to financial products and services.
3. Less literate (2,06%), only have a knowledge about financial services
8
4. Not literate (0.41%), do not have a knowledge and confidence in the
financial services institutions and financial products and services, and do
not have skills in using financial products and services.
The financial inclusive goals have been drafted in the 2016 Regulation
Financial Services Authority in 2016 on the chapter improving literacy and
financial inclusion in the financial services sector to consumers and or
community that created and published by Financial Authority Service.
Chapter eleventh contains as follows: (1) Increasing public access to the
institutions, products and services of formal financial services; (2)
Increasing the supply of products and/or financial services in the formal
financial institutions; and; (3) Increasing utilization of the product and or
financial services according to the needs and capabilities.
Financial literacy has a long-term goal for all segments of society:
Improving someone’s literacy who is in previously less literate or not
literate become well literate;
Increase the number of users in products and financial services.
In order society are able to determine which products and financial services
in accordance with the needs, the society should understand the benefits and
risks, understand their rights and obligations and believes that the products
and financial services are able to improve the society welfare. For the
seciety, financial literacy provides great benefits, such as:
Ability to select and utilize the products and financial services as
9
Protected from investing activities in financial instruments that are not
clear.
An understanding of the benefits and risks of financial products and
services, financial literacy also provides great benefits for the financial
services sector. Financial institutions and society need each other because
the higher level of financial literacy is, the more people take advantage of
the products and financial services (FSA, 2014).
As the McGraw Hill Financial report shows, teaching financial literacy
in schools encourages students to think critically about financial needs
versus wants, smart ways to save their money, and how to take charge of
their future by becoming financially independent. While financial literacy is
seen as a developed world problem, urbanization, the growing middle class,
and expanding financial access means that individuals are more empowered
to make financial choices and need to be better prepared for the
consequences of those choices. (Runde, 2015)
Without an understanding of basic financial concepts, people are not
well equipped to make decisions that related to financial management.
People who are financially literate have the ability to make informed
financial choices regarding saving, investing, borrowing, and more
10
Table 2.1
Financial Literacy: A Country-by-Country Breakdown
Economy around South-East Asia
Adults who are financially literate (%)
Malaysia 36
Indonesia 32
Singapore 59
Thailand 27
Vietnam 24
Source: (Klapper, Lusardi, & Oudheusden, 2015)
From the data above, we can draw the conclusion that financial literacy
in Indonesia is still very low compared to developed countries, even in
Malaysia. Though Indonesia and Malaysia are nearby neighbor
geographically, but, Malaysia leads in financial literacy.
4. Remote Areas
The definition of what is "remote" varies substantially between regions
of the world. A remote area is one that either is a long distance from highly
populated settlements or lacks transportation links that are typical in more
populated areas (Denkenberger, Way, & Pearce, 2015). Defining and
identifying remote area is often done by governments in every countries so
that special considerations can be made to provide services to these
difficult-to-reach places.
Based on regulation of the Minister of Education and Culture of the
Republic of Indonesia number 34 of 2012 on the criteria for remote areas,
and allowance for teachers, Article two, paragraph one, states that "the
criteria for remote or underdeveloped areas as referred to in Article 1 letter a
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a) transportation access is difficult to reach and expensive due to the
unavailability of the highway, depending on a specific schedule,
depending on the weather, the only accessible is by foot, and it has
great nature challenges;
b) not available and or very limited services, public facilities,
educational facilities, health facilities, electricity, information and
communication facilities, and clean water; and
c) higher prices and or the difficulty of the availability of foodstuffs
clothing, and shelter or housing to meet the needs of life."
Based on the criteria already set by the government in the legislation
about the criteria for remote areas above, we can conclude that remote area
is an area with facilities are still limited and prices are high. It is caused by
the location of remote area is far from big cities and the center of
government.
B.Previous Research
The research conducted by Deerajen Ramasawm, Savila Thapermall, S.
Anoop Dowlut and Mootooganaen Ramen (2013) entitled “A Study of the
Level of Awareness of Financial Literacy among Management” indicates that
most students have a medium level of knowledge and skills in financial literacy
and in savings and borrowings. Based on the study, it was found that age,
gender, language, race and income level do not have an impact on the level of
12
The research conducted by Noor Azizah Shaari, Nurfadhilah Abu Hasan,
Ramesh Kumar Moona Haji Mohamed, Mior Ahmad Jafri Md Sabri (2013)
entitled “Financial Literacy: A Study Among The University” indicates that the
spending habit and year of study have a positive relationship with the financial
literacy, whereby the age and gender are negatively associated with the
financial literacy.
The research conducted by Bharat Singh Thapa and Raj Surendra Nepal
(2015) entitled “Financial Literacy in Nepal: A Survey Analysis from College”
indicates that most of the students have a basic level of financial knowledge
but they lack in understanding of credit, taxes, share market, financial
statement and insurance.
The research conducted by Hani and Velumani (2014) entitled “A Study
on Financial Literacy Among Rural Women in Tamilnadu” indicates that
financial literacy of marginalized rural women is very low. Development of
financial literacy would help the women for better financial decision making
and proper utilization of financial services and products. It would help them for
wealth accumulation and financial well-being. It will lead to their personal
development as well as social development. Their financial participation would
help our country’s economic development.
The research conducted by Lusardi (2015) entitled “Financial Literacy
Skills for the 21st Century: Evidence from PISA” indicates that large
proportions of students in countries and economies at all levels of economic
13
More than 15% of students in the participating OECD countries and economies
perform below the baseline level of profiiency. These students can complete
only the simplest fiancial tasks, such as recognizing the difference between
needs and wants or comparing the value of goods based on a comparison of
their price per unit. An improvement in fiancial literacy for these
low-performing students is necessary to ensure their full participation in
economic life.
The research conducted by Sekar M. and Gowri M. (2015) entitled “A
Study on Financial Literacy and Its Determinants among Gen Y Employees in
Coimbatore City” indicates that that level of fiancial literacy varies
signifiantly among respondents based on various demographic and
socioeconomic factors. It can be concluded that fiancial literacy level gets
affected by gender, education, income, marital status and number of dependent
whereas it does not get affected by age. Overall it can be concluded that
fiancial literacy level is low among Gen Y employees in our Coimbatore city
and necessary measures should be taken by government to increase awareness
about fiancial related matters.
The research conducted by Huston (2010) entitled “Measuring Financial
Literacy” indicates that that a successful measure of financial literacy will
improve a researcher’s ability to distinguish when a deficiency in financial
literacy may be responsible for welfare-reducing financial choices and will
allow educators to identify education to achieve a desired outcome. Another
14
literacy is that researchers are better able to identify what outcomes are most
impacted by a lack of financial knowledge and skill. It is increasingly apparent
that financial mistakes can impact individual welfare as well as create negative
externalities that affect all economic participants. Tracking variation and
change in financial literacy rates is of interest to educators, policymakers,
employers and researchers. A more standard approach to measure financial
literacy is needed to identify barriers to financial well-being and assist in
solutions that enable effective financial choice.
The research conducted by Annamaria Lusardi and Olivia S. Mitchell
(2013) entitled “The Economic Importance of Financial Literacy: Theory and
Evidence” indicates that: first, theoretical models of saving and financial
decision-making can be further enriched to incorporate the fact that financial
knowledge is a form of human capital. Second, efforts to better measure
financial education are likely to pay off, including gathering information on
teachers, training programs, and material covered. Third, outcomes beyond
what have been studied to date are likely to be of interest, including, for
instance, borrowing for student loans, investment in health, reverse mortgage
patterns, and when to claim social security benefits, decisions that all have far
reaching economic consequences. Additional conclusion is also needed to learn
more about the directions of causality between financial knowledge and
economic wellbeing, though the early results offered here are promising. It also
appears that more and careful field experiments and cross-national research
15
the causal links between financial knowledge, costs, and benefits. While the
costs of raising financial literacy are likely to be substantial, so too are the
costs of being liquidity-constrained, over-indebted, and poor, in retirement.
The research conducted by Setyawati and Suroso (2016) entitled “Sharia
Financial Literacy And Effect On Social Economic Factors (Survey On
Lecturer In Indonesia)” indicates that socio-economic characteristics influence
on financial knowledge, financial behaviors and financial attitudes. The level
of financial knowledge, financial behaviors and attitudes of financial
Indonesian lecturers determined by the interaction of socio-economic
characteristics possessed lecturer, which consists of the interaction between the
characteristics of age, gender, level of education, domicile, expenditure per
month and marital status. Age, level of education, expenditure per month and
marital status of lecturers in Indonesia are variables that affect the level of
financial knowledge, financial behaviors and financial attitudes. The higher the
person's level of education, the higher the person's level of knowledge about
finances.
C.Hypothesis
Based on the theory and the previous studies that have been outlined
above, we can take the temporary hypothesis below:
1. Assumed gender has a significant influence to the awareness level of
16
2. Assumed education background has a significant influence to the
awareness level of society in Tanjung Putri village on financial literacy.
3. Assumed income has a significant influence to the awareness level of
society in Tanjung Putri village on financial literacy.
[image:42.595.130.541.290.682.2]D.Research Framework
Figure 2.1
Theoretical Framework
Source: Developed by the researcher (2017).
Society in Tanjung Putri Village
Financial literacy (dependent variable) (Lusardi & Mitchell, 2013)
Aware or Unaware (Ramasawm, Thapermall, Dowlut, &
Ramen, 2013)
Cause (based on temporary hypothesis): Gender (Hani &
M.Velumani, 2014), education background (Setyawati & Suroso,
2016), income (M & M, 2015) (independent variable)
Effect
Strategy
Research Area: Tanjung Putri
Village, Arut Selatan District,
West Kotawaringin Regency,
1
CHAPTER III
DATA AND RESEARCH METHODOLOGY
A. Research Source and Method
The data used in this study is primary data taken directly from the
location to be examined. This study uses mixed method, means that the
research is mixed between quantitative and qualitative method. There are
three basic mixed method design; convergent parallel mixed method,
explanatory sequential mixed method, and exploratory sequential mixed
method.
Convergent parallel mixed method is a method that is used in this study.
Convergent parallel mixed method is a mixed method where a resercher
collects a qualitative and quantitative data, analyses it separately, and
compares the result to determine: are there any findings that confirm each
others (Creswell, 2016).
B. Data Collection Technique
1. Population and Sample
The population is a collection of data sources, which have the same
properties (Sukandarrumidi & Haryanto, 2008). The population in this
study is the number of people in the Tanjung Putri village.
Sampling is the process of selecting a number of objects of research
2
Sampling is to obtain information from the population which is the
location of the study. Based on the formula Baiky (1982), so that research
can be analyzed with a statistical minimum number of samples taken 30,
although there are others suggested minimal sample size is 100 samples
(Sukandarrumidi & Haryanto, 2008). This research uses Slovin’s Formula
to determine the sample size from the given population size.
Where:
= sample size
= pupulation size
= marginal of error
To take sample for questionare, the researcher will use random
sampling methods. Random sampling method is the sampling process that
everyone in the population has an opportunity and same freedom to be
selected as a sample (Sumanto, 2014). However, in taking sample for
indepth-interview, the researcher will use purposive sampling. Purposive
sampling method is a sample that is choosen based on the criteria or
purpose of the study. In this study, the criteria for indepth-interview
respondents are; one from local decision policy and one from a teacher.
2. In-Depth Interview
Data collection by interview is often conducted in the qualitative
3
information exchange for sustainability research. According to Steward &
Cash (2008),
"An interview is interactional Because there is an exchanging, or sharing of roles, responsibilities, feelings, beliefs, motives, and information. If one person does all of the talking and the other all of the listening, a speech to an audience of one, not an interview, is taking place."
In-depth interviewing is a qualitative research technique that involves
conducting intensive individual interviews with a small number of
respondents to explore their perspectives on a particular idea, program, or
situation. For example, we might ask participants, staff, and others
associated with a program about their experiences and expectations related
to the program, the thoughts they have concerning program operations,
processes, and outcomes, and about any changes they perceive in
themselves as a result of their involvement in the program. The primary
advantage of in-depth interviews is that they provide much more detailed
information than what is available through other data collection methods,
such as surveys. They also may provide a more relaxed atmosphere in
which to collect information people may feel more comfortable having a
conversation with you about their program as opposed to filling out a
survey (Boyce & Neale, 2006).
In this study, interview techniques used is in-depth interviews. In-dept
interview is an intensive individual interview with a small number of
4
3. Questionnaire
The questionnaire consists of a variety of questions related to the
research. Data revealed by the questionnaire is the factual data or data that
is reputed truth known by the author. Questions on the questionnaire in the
form of direct questions directed to the information about the data.
Questionnaire respondents know exactly what is being asked in the
questionnaire and what information is required by related questions. The
answers are in the questionnaire will not be given as a score, but given
numbers as identification or classification coding answers (Azwar, 1999).
Based on the webside that talking about questionnaire in research (The
advantages and disadvantages of questionnaires). There are seven
advantages of using questionnaires for research:
1. Practical.
2. Large amounts of information can be collected from a large number of
people in a short period of time and in a relatively cost effective way.
3. Can be carried out by the researcher or by any number of people with
limited affect to its validity and reliability.
4. The results of the questionnaires can usually be quickly and easily
quantified by either a researcher or through the use of a software
package.
5. Can be analysed more 'scientifically' and objectively than other forms
5
6. When data has been quantified, it can be used to compare and contrast
other research and may be used to measure change.
7. Positivists believe that quantitative data can be used to create new
theories and / or test existing hypotheses
The disadvantages of questionnaires:
1. Is argued to be inadequate to understand some forms of information ,
such as: changes of emotions, behaviour, feelings etc.
2. Phenomenologists state that quantitative research is simply an artificial
creation by the researcher, as it is asking only a limited amount of
information without explanation.
3. Lacks validity.
4. There is no way to tell how truthful a respondent is being.
5. There is no way of telling how much thought a respondent has put in.
6. The respondent may be forgetful or not thinking within the full context
of the situation.
7. People may read differently into each question and therefore reply
based on their own interpretation of the question.
8. There is a level of researcher imposition, meaning that when developing
the questionnaire, the researcher is making their own decisions and
assumptions as to what is and is not important, therefore they may be
missing something that is of importance.
The process of coding in the case of open ended questions opens a great
6
In this study, there are 50 questions in the questionnaire. There are
five specific question that talking about financial literacy; financial
individual knowledge, investment, insurance, saving and loan, and
financial institution knowledge.
C. Operational Definition of Research Variable
1. Dependent Variable
In this study, the dependent variable used is a financial literacy, which
is a person's ability to process and financial planning, not only for himself
but also his family. To measure the level of financial literacy
questionnaires will be distributed to the community that has defined his
sample. Questions from questionnaires distributed are questions about
financial literacy.
2. Independent Variable
There are three independent variables used in this study. The first one
(1) is gender, this variable explain the gender, i.e. male and female.
Second (2) is the educational background, in this variable is determined by
the last study respondents were then classified into; SD, SMP, SMA,
Diploma, S1, S2 and S3. Variable three (3) or the last one is the revenue,
variable describes the amount of a person's income in each month are
clarified in the form of average; < 1.000.000, 1.000.000 – 3.000.000,
7
D. Instrument Research Test
1. Validity Test
The data has been obtained from the questionnaire, before processing
should be performed validity test first to test how valid questions are asked
in the questionnaire with the variables studied (Algifari, 2015).
This study using SPSS version 15.0 in determining construct validity.
Construct validity is to demonstrate that the measuring instrument in
measuring valid questionnaires indicated by a strong correlation with
existing variables in research (Abdillah & Hartono, 2015). Validity test of
this research using the technique of corrected item correlation, in taking
the decision is if rcount > rtable, it can be said valid, but on the contrary if the
rcount < rtable then said invalid. Once it is found valid or not, the researcher
do significant testing using r table, it can be said significant at the 0.05
8
2. Reliability Test
If the validity test is already done, the next step is doing reliability
test. Reliability tests are used to test how consistent the answers given by
respondents in the questionnaires given (Algifari, 2015).
Reliability test conducted with Cronbach Alpha formula:
[image:50.595.177.466.243.440.2]∑ ∑
Table 3.1
Criteria of Reliablity Coefficient Based on Guilford
Source: (Basuki, 2015)
Data can be said reliable if the Cronbach Alpha (r11) at least at 0.8.
But there also are found Croanbach Alpha at 0.6 can be said reliably
(Algifari, 2015).
E. Data Analysis
1. Descriptive Analysis for Interview
Descriptive research can be either quantitative or qualitative. It can
involve collections of quantitative information that can be tabulated along
a continuum in numerical form, such as scores on a test or the number of
times a person chooses to use a-certain feature of a multimedia program,
or it can describe categories of information such as gender or patterns of
Value Explanation
r11 < 0,20 Very Low
0,20 < r11 < 0,40 Low
0,40 < r11 < 0,70 Moderate
0,70 < r11 < 0,90 High
9
interaction when using technology in a group situation. Descriptive
research involves gathering data that describe events and then organizes,
tabulates, depicts, and describes the data collection. It often uses visual
aids such as graphs and charts to aid the reader in understanding the data
distribution. Because the human mind cannot extract the full import of a
large mass of raw data, descriptive statistics are very important in reducing
the data to manageable form. When in-depth, narrative descriptions of
small numbers of cases are involved, the research uses description as a tool
to organize data into patterns that emerge during analysis. Those patterns
aid the mind in comprehending a qualitative study and its implications.
Data analysis techniques in qualitative research through a procedure
that has been done by many experts qualitatively. The procedure is
undergoing data collection, data input, data analysis, conclusion and
verification, and ending with the form of the findings in narrative form
(Herdiansyah, 2010).
2. Likert scale
This study use likert skale as the data analysis in quantitative
method. In response to the difficulty of measuring character and
personality traits, developed a procedure for measuring attitudinal scales
(Likert, 1932). The original Likert scale used a series of questions with
five response alternatives: strongly approve (1), approve (2), undecided
10
Respondents will choose one of five options given to answer
questions. Questions contained in the questionnaire are questions that are
approved and in accordance with what is being used as research material.
In this study, the question on the questionnaire are questions about
financial literacy, such as savings, investment, insurance, and others.
In analyzing Likert scale, researchers will create weight value table
[image:52.595.141.519.302.607.2]and percentage value table, then uses an index formula percent.
Table 3.1 Weight Value Table
Very Agree 5
Agree 4
Neutral 3
Disagree 2
Very Disagree 1
Source: (Likert, 1932)
Table 3.2
Percentage Value Table
Answer Description
0% - 19.99% Very (Disagree, Once More or Less)
20% - 39.99% Disagree or Less Good
40% - 59.99% Quite or Neutral
60% - 79.99% Agree, Neither or Likes
80% - 100% Very (Agree, Neither, Likes)
Source: (Likert, 1932)
Index % Formula = Total Score / Y x 100
After calculating the percent of the index is complete, it will be
found the percentage of people who agree or disagree on the results of a
11
3. Descriptive Statistics
Descriptive statistics are used to describe the data or make a summary
of the data in the first phase of data analysis (Sumanto, 2014). Descriptive
statistics are not concluded directly, but only provides information to use
data that has been processed before, usually it is displayed in the form of
tables, graphs and diagrams.
Descriptive statistics are typically distinguished from inferential
statistics. With descriptive statistics the researchers are simply describing
what is or what the data shows. With inferential statistics, the researchers
are trying to reach conclusions that extend beyond the immediate data
alone. Thus, the researchers use inferential statistics to make inferences
from our data to more general conditions; we use descriptive statistics
simply to describe what's going on in the data.
Descriptive Statistics are used to present quantitative descriptions in a
manageable form. In a research study we may have lots of measures. Or
we may measure a large number of people on any measure. Descriptive
statistics help us to simplify large amounts of data in a sensible way. Each
descriptive statistic reduces lots of data into a simpler summary.
4. SWOT Analysis
Usually, SWOT analysis used in the management and business
research. SWOT itself is the abbreviation from Strength, Weakness,
Opportunity, and Treat. Strength and weakness used for internal analysis,
12
SWOT analysis because it will be useful to get the conclusion and
recommendation (FME, 2013).
5. Binary Logistic Regression Analysis
Regression analysis is one of statistical data analysis techniques that
often used to examine the relationship between several variables and
predict a variable (Kutner, Nachtsheim, Neter, & Li, 2004). There are two
types of regression analysis; simple regression and multiple regression.
Generally, logistic regression is well suited for describing and testing
hypotheses about relationships between a categorical outcome variable and
one or more categorical or continuous predictor variables. Logistic
regression is an approach to make a prediction model, such as in linear
regression. The difference is in dependent variable; dichotomy scale.
Dichotomy scale is a nominal data scale with two categories, for example:
yes and no, good and bad, or high and low.
There are two main uses of logistic regression: The first is the
prediction of group membership. Since logistic regression calculates the
probability of success over the probability of failure, the results of the
analysis are in the form of an odds ratio. Logistic regression also provides
knowledge of the relationships and strengths among the variables.
This study will uses binary logistic regression. Binary logistic
regression is used when there are only two possibility of respond variable
(Y). The equation is:
13 Where:
Ln : Logaritma natural
: OLS equation
Based on the equation above, it will be difficult to interprate the
regression coefficient. So, this research will use Odds Ratio or Exp(B) or
OR. Exp(B) is a component from regression coefficient. This
interpretation means the category code in every variables:
1. Independent variable is financial literacy: 0 code is for the
awareness of financial literacy is low, and code 1 is for the
awareness of financial literacy is high.
2. Dependent variable is gender: 0 code is for man, and 1 code is for
woman.
3. Dependent variable is indome: 0 code is for income a month <
1.000.000, 1 code is for income a month 1.000.000 – 3.000.00, 2
code is for income a month 3.000.000 – 5.000.000, 3 code is for
income a month 5.000.000 – 7.000.000, and 4 is for income a
month > 7.000.000.
4. Dependent variable is education background: 0 code is for SD, 1
code is for SMP, 2 code is for SMA, 3 code is for S1, and 4 code
is for S2.
Another difference in logistic regression is there is no “R Square” to
14
dependent variable. In logistic regression called it Pseudo R Square, R
Square similar with R Square in OLS.
If in OLS uses F Anova test to measure significant level and a
goodness of equation model. In logistic regression uses Chi Square value
based on Likelihood maximum measurement (Basuki, 2015).
Assumptions of Logistic Regression:
1. Logistic regression does not assume a linear relationship between the
dependent and independent variables.
2. The dependent variable must be a dichotomy (2 categories).
3. The independent variables need not be interval, nor normally
distributed, nor linearly related, nor of equal variance within each
group.
4. The categories (groups) must be mutually exclusive and exhaustive;
a case can only be in one group and every case must be a member of
one of the groups.
5. Larger samples are needed than for linear regression because
maximum likelihood coefficients are large sample estimates. A
minimum of 50 cases per predictor is recommended.
F. Classic Assumption Test
1. Heterokedastisitas Test
Heterokedastisitas test is to see whether there is variance’s
dissimilaritis from one residual observation to another one.
15
method by ploting the value of ZPRED (prediction value) with SRESID
(residual value). Statistic test which is used in this study is Glejser test.
Another alternative is if the heterokedastisitas assumption is not
appoviate, then it should be transformed into logaritma form if all the data
is positive measurement (Basuki, 2015).
2. Normality Test
Normality test is condacted to see whether the value of residual is
normally distributed or not. Normality test is done to residual value, not to
each variable. Some statistic experts argued that the data whose number is
higher than 30, than it can be said that it is normality distributed. In this
study it will use Kolmogorov Smirnov as the statistic test (Basuki, 2015).
3. Multikolinearity Test
Multikolinearity test is to see whether there is high correlation
between independent variables in multiple regression model. If
independent variables show high correlation, that dependent variable will
be distrubed. In this study it will use variance inflation vactor (VIF). If
VIF value < 10 then there is no mult
