Financial Literacy and Financial Behavior Encouraging Business Sustainability by Mediation of Financial Performance

Village financial institutions based on local wisdom have benefits for various community activities and developing businesses in the village, so that they become the main indicator in advancing village economic growth. Many village financial institutions do not operate due to competition with formal financial institutions. This study aims to analyze the effect of financial literacy on financial performance, sustainability and financial behavior; the influence of financial behavior on financial performance and sustainability as well as the influence of financial performance on sustainability. The sample of this research is Village Credit Institutions totaling 100 units in districts/cities in Bali which are determined by the slovin formula. The analysis technique using SEM-PLS, it was found that increasing financial literacy was able to improve financial performance and sustainability, as well as reduce behavioral financial bias; increasing behavioral financial bias can reduce financial performance and sustainability, and improving financial performance can improve sustainability easing financial literacy was able to improve financial performance and sustainability, as well as reduce behavioral finance bias; increasing behavioral finance can reduce financial performance and sustainability, and increasing financial performance can increase sustainability