The Role of Financial Management in Improving TheSustainability of Agricultural Micro Enterprises in Disadvantaged Areas
Year: 2025
Type: article
Abstract: This study examines the role of financial management in enhancing the sustainability of agricultural micro-enterprises in disadvantaged areas. The objective is to identify key financial management practices that contribute to the long-term viability of these enterprises and understand the barriers that hinder the effective adoption of such practices. Given the challenges faced by smallholder farmers, including limited access to financial services and fluctuating environmental conditions, this research addresses a critical gap in literature on how financial strategies can support sustainable development in rural economies. A qualitative approach was employed through a systematic literature review, analyzing various case studies and peer-reviewed articles related to financial management in agricultural micro-enterprises. Data was collected from a range of academic sources, including journals, reports, and case studies, and analyzed using thematic analysis to identify common patterns and insights. The findings reveal that effective financial management practices, such as budgeting, cash flow management, and financial literacy, significantly enhance the profitability and resilience of agricultural micro-enterprises. Key statistics show that enterprises with proper cash flow management experienced a 20-30% increase in profitability, and 80% of businesses involved in financial literacy programs reported a 15% increase in profit margins. However, barriers such as financial literacy gaps and limited access to formal credit remain significant challenges. The study contributes to the theoretical understanding of financial management in small-scale agriculture and offers practical insights for policymakers and financial institutions to improve support for these enterprises. The research emphasizes the importance of financial management in promoting sustainability within agricultural micro-enterprises. The findings suggest that improving financial literacy and access to credit, alongside tailored financial products, can significantly enhance the resilience of these businesses. Future research could further explore the role of digital financial tools and climate-risk management in supporting the financial stability of agricultural micro-enterprises.
DOI: 10.14419/vzrnm914
Authors: Ike Susanti, Sihabudin, I Gusti Ngurah Agung Wiryanata, Loso Judijanto
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7115068871
FWCI:
Cites:
Cited by:
Related to: