Mohamad Bastomi, Agung Winarno, Sudarmiatin Sudarmiatin, Nurika Restuningdiah
This study aims to analyze the effect of Islamic financial literacy, intellectual capital, and working capital on the financial performance of Baznas Microfinance Village partners. This research used a quantitative methodology to answer the problems studied. The sample of this study consisted of 285 respondents from 1100 Baznas Microfinance Village partners who became the study population. The research instrument used five Likert scales. This research used Partial Least Squares Structural Equation Modeling (PLS-SEM) for data analysis. The research findings showed that Islamic financial literacy, intellectual capital, and working capital significantly affect financial performance. In addition, government policy moderates the effect of Islamic financial literacy and working capital on financial performance but does not moderate intellectual capital's effect on financial performance. This research contributes to understanding the dynamics of the factors that influence the financial performance of businesses in the micro sector and the importance of management strategies that support such optimization. Theoretically, this research integrates two main theories, namely Dynamic Capabilities Theory and Knowledge-Based View (KBV), where Dynamic Capabilities Theory underlines the importance of an organization's ability to adapt to changes in the external environment and optimize internal resources. Meanwhile, the Knowledge-Based View (KBV) emphasizes the importance of knowledge and skills as key resources in creating competitive advantage. From a practical perspective, micro merchants in the culinary sector, especially those in microfinance programs such as Baznas Microfinance Desa, can benefit from training and education on financial literacy based on sharia principles, managerial skills development (including intellectual capital), and more efficient working capital management. The government and microfinance institutions can focus more on policies that support micro merchants' capacity building in these areas. One of the problems identified in this study is the use of perceptions in measuring research variables. The use of perception in the measurement of statement items can cause data bias. In addition, there is a lack of identification regarding respondents' Islamic financial literacy level, which is an important factor in shaping one's business management strategy. © Copyright (c) 2026 The Authors. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Faculty of Economics and Business, Universitas Negeri Malang, India; Faculty of Economics and Business, Universitas Islam Malang, India
