Priviet Social Sciences Journal

Optimizing village empowerment through creative MSMEs, financial literacy, and government policies for poverty alleviation

by Wahyu Wibowo , Mega Rahmawati , Taufikur Rohman , Nasrudin Nasrudin , Zakiyudin Fikri
Vol. 6 No. 3 (2026): March 2026

Abstract

This study examines village empowerment strategies for poverty alleviation through the integration of strengthening creative MSMEs based on local culture, increasing financial literacy (including digital financial literacy), and government policy support. The study uses a literature study by selecting and synthesizing research findings related to the concept of Cultural Independent Villages, creative entrepreneurship, financial inclusion, and collaborative governance models. The results of the synthesis show that local culture can be an endogenous capital that generates economic added value through creative products and services, while strengthening citizen participation. However, the growth of MSMEs is not sustainable without the ability to record finances, plan capital, and utilize secure digital financial services. Policy support is needed to build an ecosystem in the form of tiered mentoring, business incubation, pentahelix partnerships, access to financing, and market access through marketing digitalization. The study confirms that fragmented interventions tend to produce short-term impacts, so programs should be designed place-based with success indicators that include revenue, business sustainability, market expansion, and financial inclusion. Future agendas include cross-village integrative model testing, data-driven impact measurement, and risk and consumer protection assessments on digital financial literacy. Practically, the main recommendations are to build an applicable financial literacy curriculum, facilitate legality and product standardization, and strengthen culture-based branding so that MSMEs upgrade and their benefits are evenly distributed at the household level.

References

  1. Affandi, Y., Ridhwan, M. M., Trinugroho, I., & Hermawan Adiwibowo, D. (2024). Digital adoption, business performance, and financial literacy in ultra-micro, micro, and small enterprises in Indonesia. Research in International Business and Finance, 70, 102376. https://doi.org/10.1016/j.ribaf.2024.102376
  2. Alshebami, A. S., & Murad, M. (2022). The moderation effect of entrepreneurial resilience on the relationship between financial literacy and sustainable performance. Frontiers in Psychology, 13, 954841. https://doi.org/10.3389/fpsyg.2022.954841
  3. Arianti, M., Netra, P. A., Astari, R., & Yuliar, S. (2024). Rural transformation of Nglanggeran through ecotourism: A socio-technical approach. Jurnal Sosioteknologi, 23(2), 186–202. https://doi.org/10.5614/sostek.itbj.2024.23.2.4
  4. Arifa, I., Choiri, A., Wibowo, W., Aminuddin, A., & Panggabean, N. A. (2025). Peran UMKM dalam meningkatkan perekonomian nasional. PESHUM: Jurnal Pendidikan, Sosial dan Humaniora, 4(4), 5376–5385. https://doi.org/10.56799/peshum.v4i4.9530
  5. Belfiore, E. (2020). Whose cultural value? Representation, power and creative industries. International Journal of Cultural Policy, 26(3), 383–397. https://doi.org/10.1080/10286632.2018.1495713
  6. Bohnet, I. C., Bryce, R., Måren, I. E., Barraclough, A. D., Malcolm, Z., Külm, S., Kokovkin, T., Taylor, S., Cudlinova, E., & Sepp, K. (2025). Co-creating cultural narratives for sustainable rural development: A transdisciplinary learning framework for guiding place-based social-ecological research. Current Opinion in Environmental Sustainability, 73, 101506. https://doi.org/10.1016/j.cosust.2024.101506
  7. Bustami, K., Saifrizal, M., & Inuzula, L. (2025). Inklusi keuangan melalui literasi keuangan, modal sosial, dan teknologi finansial: Desa Blang Kecamatan Syamtalira Aron Kabupaten Aceh Utara. Journal of Comprehensive Science, 4(2), 544–556. https://doi.org/10.59188/jcs.v4i2.3011
  8. Cattaneo, A., Adukia, A., Brown, D. L., Christiaensen, L., Evans, D. K., Haakenstad, A., McMenomy, T., Partridge, M., Vaz, S., & Weiss, D. J. (2022). Economic and social development along the urban–rural continuum: New opportunities to inform policy. World Development, 157, 105941. https://doi.org/10.1016/j.worlddev.2022.105941
  9. Cerquetti, M., Ferrara, C., Romagnoli, A., & Vagnarelli, G. (2022). Enhancing intangible cultural heritage for sustainable tourism development in rural areas: The case of the “Marche Food and Wine Memories” project (Italy). Sustainability, 14(24). https://doi.org/10.3390/su142416893
  10. Creswell, J. W., & Poth, C. N. (2023). Qualitative inquiry and research design: Choosing among five approaches (5th ed.). Sage.
  11. Fatimah, S., Wibowo, W., Irfaniah, N. R., Harahap, R. A., & Panggabean, N. A. (2025). Local digital ecosystem: Peran komunitas digital dalam mendorong bisnis kreatif daerah. JUMINTAL: Jurnal Manajemen Informatika dan Bisnis Digital, 4(1), 127–136. https://doi.org/10.55123/jumintal.v4i1.5479
  12. Galluccio, C., & Giambona, F. (2024). Cultural heritage and economic development: Measuring sustainability over time. Socio-Economic Planning Sciences, 95, 101998. https://doi.org/10.1016/j.seps.2024.101998
  13. Hendrayani, Y., Zen, I. S., Uljanatunnisa, & Maryam, S. (2025). Nglanggeran village: A model for sustainable tourism through multi-stakeholder engagement and corporate social responsibility. SAGE Open, 15(3). https://doi.org/10.1177/21582440251363672
  14. Husniyah, J. F., Dewanti, S. N., & Cahyani, S. N. (2024). Evaluasi penerapan eco-label dalam pengembangan ekowisata di Desa Wisata Nglanggeran, Yogyakarta. Jurnal Nasional Pariwisata, 14(1). https://doi.org/10.22146/jnp.92781
  15. Idris, F. Y., & Yunanto, A. (2025). Access to green financing for rural SMEs: The strategic role of banking in promoting a sustainable circular economy in Indonesia. The International Conference on Sustainable Economics Management and Accounting Proceeding, 1(01), 1598–1603. https://doi.org/10.32424/icsema.1.1.400
  16. Jamalina, I. A., & Wardani, D. T. K. (2017). Strategi pengembangan ekowisata melalui konsep community based tourism (CBT) dan manfaat sosial ekonomi bagi masyarakat di Desa Wisata Nglanggeran, Patuk, Gunung Kidul. Jurnal Ekonomi & Studi Pembangunan, 18(1), 71–85. https://doi.org/10.18196/jesp.18.1.4008
  17. Juliyanti, W., Adamura, F., Jianggimahastu, P., & Husaini, R. (2025). Peningkatan literasi keuangan UMKM melalui sosialisasi pemisahan keuangan usaha dan pribadi di Desa Jatirejo, Wonoasri, Madiun. Jurnal Pengabdian Masyarakat Bangsa, 3(9), 5046–5052. https://doi.org/10.59837/jpmba.v3i9.3437
  18. Kumar, M. M., Almuraqab, N., Moonesar, I. A., Braendle, U. C., & Rao, A. (2024). How critical is SME financial literacy and digital financial access for financial and economic development in the expanded BRICS block? Frontiers in Big Data, 7, 1448571. https://doi.org/10.3389/fdata.2024.1448571
  19. Lestari, E. D., Abd Hamid, N., Shamsuddin, R., Kurniasari, F., & Yaacob, Z. (2024). Investigating the factors of SMEs’ business resilience in the post-pandemic crisis of COVID-19 with technology adoption as a quasi-moderator. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2023.2301135
  20. Leviäkangas, P., Sønvisen, S., Casado-Mansilla, D., Mikalsen, M., Cimmino, A., Drosou, A., & Hussain, S. (2025). Towards smart, digitalised rural regions and communities. Technology in Society, 81, 102824. https://doi.org/10.1016/j.techsoc.2025.102824
  21. Li, B., & Pan, Y. (2025). Digital inclusive finance and rural entrepreneurial survival: The moderating role of digital and financial literacy. Economic Analysis and Policy, 86, 1119–1136. https://doi.org/10.1016/j.eap.2025.04.025
  22. Lu, W.-B., & Wang, P.-H. (2025). Exploring the impact of cultural identity on the revitalization benefits of rural communities. Social Sciences, 14(6). https://doi.org/10.3390/socsci14060377
  23. Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
  24. Maulia, E. I., & Setiyono, B. (2023). Collaborative governance dalam pengembangan desa wisata Nglanggeran: Analisis dampak digitalisasi desa wisata. Journal of Politic and Government Studies, 13(1), 404–418. https://ejournal3.undip.ac.id/index.php/jpgs/article/view/42391
  25. OECD. (2025). Reinforcing rural resilience. https://doi.org/10.1787/7cd485e3-en
  26. Paliwal, K. (2025). Enhancing financial inclusion and financial literacy for SMEs in Zambia. Indonesian Journal of Islamic Economics and Finance, 5(1), 29–50. https://doi.org/10.37680/ijief.v5i1.6908
  27. Probohudono, A. N., Suhardjanto, D., Aligarh, F., Chayati, N., & Putra, A. A. (2025). Navigating MSMEs’ performance through innovation and digital IT capabilities in business strategy. Social Sciences & Humanities Open, 12, 101810. https://doi.org/10.1016/j.ssaho.2025.101810
  28. Rahayu, P., & Srihastuti, E. (2025). Pelatihan literasi keuangan digital dan pencegahan pinjaman online ilegal bagi UMKM di Desa Campursari. Nuansa Akademik: Jurnal Pembangunan Masyarakat, 10(1), 15–24. https://doi.org/10.47200/jnajpm.v10i1.2640
  29. Rekha, I., KV, S., & Hungund, S. (2024). MSME/SME financial literacy: A systematic literature review and bibliometric analysis. Journal of the Knowledge Economy, 16(4), 14378–14405. https://doi.org/10.1007/s13132-024-02472-0
  30. Reni, D. (2025). Peningkatan literasi keuangan UMKM di Desa Ciakar melalui pendampingan penggunaan aplikasi Buku Warung. Indonesian Community Service and Empowerment Journal (IComSE), 6(1), 649–657. https://doi.org/10.34010/icomse.v6i1.14627
  31. Riezieq, S., Pebriyanti, W., Setiawan, I., Salsabila, T. N., Salsabillah, A. Z., & Buwana, A. G. (2025). Membangun peran inovasi UMKM, literasi finansial, dan pengembangan kreativitas anak dalam pemberdayaan ekonomi masyarakat desa. Jurnal Pengabdian Kepada Masyarakat Indonesia, 5(3), 83–93. https://doi.org/10.55606/jpkmi.v5i3.8566
  32. Sari, F. L., Sari, W. T., & Mashudi. (2025). The role of cooperatives and MSMEs in encouraging financial inclusion in rural communities. INTERDISIPLIN: Journal of Qualitative and Quantitative Research, 2(5), 332–339. https://doi.org/10.61166/interdisiplin.v2i5.109
  33. Scaramuzzi, S., Scarpellini, P., Gabellini, S., Ranaboldo, C., & Belletti, G. (2023). Enhancing territorial development based on biocultural identity. Journal of Rural Studies, 104, 103161. https://doi.org/10.1016/j.jrurstud.2023.103161
  34. Shakya, M., & Vagnarelli, G. (2024). Creating value from intangible cultural heritage. European Journal of Cultural Management and Policy, 14, 12057. https://doi.org/10.3389/ejcmp.2024.12057
  35. Sholihah, E., Nurhapsari, R., & Rohmania, A. S. (2023). The role of literacy and government support in improving MSME performance. Jurnal Keuangan dan Perbankan, 27(3), 424–436. https://doi.org/10.26905/jkdp.v27i3.11147
  36. Sulistianingsih, H., & Santi, F. (2023). Does SME’s financing decisions follow pecking order pattern? Cogent Business and Management, 10(1). https://doi.org/10.1080/23311975.2023.2174477
  37. UN Tourism. (2021). UNWTO announces list of “Best Tourism Villages” 2021. https://www.untourism.int/news/unwto-announces-list-of-best-tourism-villages-2021
  38. Utami, R., & Yuliyanti, R. (2025). Keberlanjutan ekonomi kreatif berbasis kearifan lokal di Kampung Pangambangan melalui literasi keuangan dan pemasaran digital. Jurnal Pengabdian Kepada Masyarakat Nusantara, 6(4), 4850–4857. https://doi.org/10.55338/jpkmn.v6i4.6944
  39. Wibowo, W., Nofriansyah, N., Nasrudin, N., & Aminuddin, A. (2025). Integrating Islamic financial literacy, social entrepreneurship, and social finance. https://doi.org/10.4018/979-8-3373-1842-4.ch005
  40. Widyastuti, M., Ferdinand, D. Y. Y., & Hermanto, Y. B. (2023). Strengthening formal credit access and performance through financial literacy and credit terms in micro, small and medium businesses. Journal of Risk and Financial Management, 16(1). https://doi.org/10.3390/jrfm16010052
  41. Xiang, G., & Hu, C. (2025). Review and prospects of rural entrepreneurship research. Journal of Enterprising Communities: People and Places in the Global Economy, 19(6), 1705–1720. https://doi.org/10.1108/jec-11-2024-0233
  42. Xiao, X., Fang, C., Lin, H., & Chen, J. (2022). A framework for quantitative analysis and differentiated marketing of tourism destination image. Tourism Management, 93, 104585. https://doi.org/10.1016/j.tourman.2022.104585
  43. Yu, Y., Li, W., Li, H., Luo, S., & Liu, Y. (2025). Exploring the dynamic impact of digital financial literacy on rural household income. Sustainability, 17(8). https://doi.org/10.3390/su17083385
  44. Zumalia, Z., Suhardi, S., Firdaus, R., & Rejeki, N. S. (2025). Financial literacy, policies and regulations, infrastructure facilities and financial inclusion for MSME owners. SIBATIK Journal, 4(4), 307–324. https://doi.org/10.54443/sibatik.v4i4.2653