ANALYSIS OF FACTORS AFFECTING SHARI’AH FINANCIAL LITERACY IN RURAL AREA, CASE STUDY OF PEKALONGAN
ANALYSIS OF FACTORS AFFECTING SHARI’AH FINANCIAL LITERACY IN RURAL AREA, CASE STUDY OF PEKALONGAN ANALISIS FAKTOR – FAKTOR YANG MEMPENGARUHI LITERASI
KEUANGAN SYARIAH DI DAERAH PEDESAAN, STUDI KASUS PEKALONGAN
UNDERGRADUATE THESIS
Arranged By:
HAFID KHOIR MAULANA 20130430321
INTERNATIONAL PROGRAM FOR ISLAMIC ECONOMICS AND FINANCE
UNIVERSITAS MUHAMMADIYAH YOGYAKARTA 2017
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ANALYSIS OF FACTORS AFFECTING SHARI’AH FINANCIAL LITERACY IN RURAL AREA, CASE STUDY OF PEKALONGAN ANALISIS FAKTOR – FAKTOR YANG MEMPENGARUHI LITERASI
KEUANGAN SYARIAH DI DAERAH PEDESAAN, STUDI KASUS PEKALONGAN
UNDERGRADUATE THESIS
Arranged By:
HAFID KHOIR MAULANA 20130430321
INTERNATIONAL PROGRAM FOR ISLAMIC ECONOMICS AND FINANCE
FACULTY OF ECONOMICS AND BUSINESS UNIVERSITAS MUHAMMADIYAH YOGYAKARTA
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DECLARATION
Name : Hafid Khoir Maulana
Student Number : 20130430321
With this letter I declare that this thesis entitled “ANALYSIS OF FACTORS AFFECTING SHARI’AH FINANCIAL LITERACY IN RURAL AREA, CASE STUDY OF PEKALONGAN” is consideration of my own personal effort. Where any of content presented is the result of 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, 22 April 2017
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MOTTO
“Hidup sekali hiduplah yang berarti, takut mati tak usah hidup takut hidup mati
saja”
(PMDG)
“Barangsiapa yang mendatangkan sebuah kebaikan maka ia akan mendapatkan sepuluh kali lipat dari kebaikan itu”
(Al-quranul kariim)
“Walaupun ranting pepohonan dijadikan alat tulis dan air di tujuh lautan
dijadikan tintanya maka sekali-kali tiak akan pernah cukup untuk menulis tanda
kebesaran Allah”
(Al-quranul kariim)
“Bondho,bahu,pikir lek perlu sak nyawane pisan”
(KH.Ahmad Sahal)
“Patah tumbuh hilang berganti sebelum patah sudah tumbuh sebelum hilang
sudah berganti” (KH.Imam Zarkasyi)
“No dream no future, no regret no learning and if there is nothing to believe than nothing to achieve”
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DEDICATION
I dedicated this undergraduate thesis for my parents, big family of Randukuning, teachers from my kindergarten until college, my second family “HIMIE”, my organization “FIES”, my classmate of IPIEF 2013, “PIONER” generation and all
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ACKNOWLEDGEMENT
All praise to Allah S.W.T the most gracious and merciful for His guidance and blessing. Peace and salutation always be to the Prophet Muhammad peace be upon him altogether with his accompanies.
After the establishment of this study on “Analysis of Factors Affecting Shari’ah Financial Literacy in Rural area, Case study of Pekalongan ”the author gives special appreciation to the parties in supporting the accomplishment of this study. In particularly they are:
1. The respectable Dr. Nano Prawoto, SE., M.Si., as Dean of Economics Faculty.
2. The respectable Alm, Dr. Masyhudi Muqorobin, SE.,Akt., M.Ec., as Director of International Program for Islamic Economics and Finance UMY.
3. The respectable Mr.Agus Tri Basuki, SE.,M.Si as my supervisor together with Mrs. Dyah Tities Kusuma W.,MIDEc. for all priceless helps, supports, advices, guidance, all material and non-material dedications. 4. Dear all IPIEF lectures and IPIEF staff: Dr. Wahdi Yudhi, Yuli Utami,
M.Ec., Dr. Abdul Hakim, Mr. Hudiyanto, Ayif Faturrahman, M.Si, Dr. Endah Saptutiningsih, Dr. Lilies Setiartiti, Mr. Hendrianto, M.Ec, Mr. Umar Fauzi, MA, Mr. Sahlan, Mrs. Linda Kusumastuti, SE
5. For my mother and Father, Rahyono S.Pd,.MSi. and Wiri S.Pd,.Sd I love you so much.
6. For my sisters, Linah Tadiya Fitriana and Juliana Rahmawati for support and accompany.
7. Mr. Suwarjo, Mrs. Subekti, Mr. Dauri, Mrs. Sau’dah and all relatives that I cannot mention one by one, may Allah bless us.
8. My high school Pondok Modern Darussalam Gontor especially my graduate Pioner Generation.
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TABLE OF CONTENT
DECLARATION ... iii
MOTTO ... iv
DEDICATION ... v
AKNOWLEDGEMENT ... vi
TABLE OF CONTENT ... vii
Table of Figures ... viii
Table of Pictures ... ix
INTISARI ……… ... x
ABSTRACT ………..……. ... xi
CHAPTER I ………. ... 1
INTRODUCTION ……….…….. ... 1
Background ……….………. ... 1
Problem Limitation ………..………… ... 8
Research Question ……….………….. ... 8
Research Objective ……….………. ... 9
Research Benefits ……….…… ... 9
Research Plan ……….……. ... 10
CHAPTER II ……….……….. ... 11
LITERATURE RIVEW ……….………. ... 11
Theoretical Framework ………...……… ... 11
History of Islamic Economic in Indonesia …………..……….. ... 11
Financial Literacy ……….………. ... 12
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Shari’ah Financial Institution………...…. ... 14
Factors of Financial Literacy ……….…... 15
Shari’ah Financial Product……….... ... 17
Financial Institution and Financial Literacy Classification ….…….. ... 18
Financial Literacy Consumer Attitude ……….. ... 20
Financial Literacy of Islamic Consumption Theory ………..… ... 21
Rural Area ………. ... 22
Literature Review ……….... ... 23
Research Framework ………...…… ... 34
Hypothesis ………...……… ... 35
CHAPTER III ………. ... 36
METHODOLOGY ………... ... 36
Research Object ………... 36
Type of Data ………...…… ... 36
Collecting Sample Technique ………...…..… ... 37
Population ………...……..…... 37
Sampling Method ………...………... ... 37
Data Collection ………..………. ... 38
Operational Definition of Variables ………...………… ... 40
Dependent Variable ……….………. ... 40
Independent Variables ……….………. ... 41
Quality Test of Research Instrument ……….………. ... 41
Validity Test ………. ... 41
Reliability Test ………. ... 42
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Data Analysis ………....…….. ... 43
Descriptive Statistic ………... 43
Logistic Regression ……….. ... 43
CHAPTER IV ………..…. ... 45
RESEARCH OVERVIEW ………...…. ... 45
Research Overview ………...…. ... 45
Amount of Respondent ………... 45
Gender ………..…… ... 47
Age Range of Respondent ………....…… ... 48
Work Field ………..…... 50
Income ………... ... 52
Education ………..…... ... 54
Financial Institution Relationship ……… ... 55
CHAPTER V ………....……. ... 58
DISCUSSION ………..………. ... 58
Instrument Data Quality Test ……….. ... 58
Validity Test ……….. ... 58
Reliability Test ……….. ... 62
Ordinal Logistic Test ………. ... 64
Discussion ………...………….… ... 68
Shari’ah Financial Literacy Level of Rural People in Pekalongam .. ... 68
Financial Literacy and Income ……….. ... 72
Financial Literacy and Education ………... ... 73
Financial Literacy and Work Field ………...…… ... 74
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CHAPTER VI ………. ... 76
CONCLUSION ……….. ... 76
Conclusion ……….……… ... 76
Suggestion ……….. ... 76
Research Limitation ………... ... 77
BIBLIOGRAPHY ……….………. ... 78
APPENDIX ………..……….. ... 80
List of Table Table 1.1 Literacy and Utility Index ……… ... 4
Table 1.2 Percentage of Poor People ………... ... 6
Table 2.1 Literature Review ……… ... 6
Table 3.1 Pekalongan Population ………... ... 30
Table 3.2 Likert Scale ………... ... 36
Table 3.3 Score Conversion ……….... ... 38
Table 4.1 Respondent Amount ………... ... 45
Table 4.2 Respondent Gender ……… ... 46
Table 4.3 Age Range Table ……….... ... 47
Table 4.4 Respondent Work Field ………... 49
Table 4.5 Respondent Income Data ……….... ... 50
Table 4.7 Respondent Education ……… ... 54
Table 5.1 Respondent Relationship ……… ... 56
Table 5.2 Validity Test ………... ... 57
Table 5.3 Validity Test ………... ... 58
Table 5.4 Validity Test ………... ... 58
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Table 5.6 Validity Test ………... ... 60
Table 5.7 Validity Test ………... ... 61
Table 5.8 Fitting Model ……….. ... 62
Table 5.9 Variability Test ………... ... 63
Table 5.10 Ordinal Regression Test ………... ... 64
Table 5.11 Parallel Line Test ………. ... 66
Table 5.12 Score Conversion ………. ... 67
Table 5.13 Shari’ah Financial Literacy Frequency .………... ... 67
List of Figure Figure 1.1 Pekalongan Map ……… ... 7
Figure 2.2 Frame Work ……….. ... 33
Figure 4.1 Respondent Diagram ………... 46
Figure 4.2 Gender ……….. ... 47
Figure 4.3 Age Range ……… ... 48
Figure 4.4 Work Field ……….... ... 50
Figure 4.5 Income ……….. ... 51
Figure 4.6 Education ……….. ... 53
Figure 4.7 Relation ……….... ... 54
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INTISARI
Saat ini literasi keuangan menjadi salah satu isu yang sangat popular di antara kalangan para peneliti dan banyak orang yang melakukan penelitian dengan inti topic literasi keuangan, namun masih sedikit daripara peneliti yang terfokus kepada literasi keuangan syariah. Berdasarkan fakta ini, maksud peneliti dalam penelitian ini adalah untuk mengetahui tingkat literasi keuangan syariah penduduk pedesaan di kabupaten Pekalongan dan untuk mengetahui faktor – faktor yang mempengaruhi literasi keuangan syariah. dengan menggunakan data primer metode statistic deskriptif dan uji regresi ordinal peneliti mencoba untuk menemukan hubungan antara pendapatan, pendidikan, pekerjaan dan hubungan responden dengan institusi keuangan dari total 154 responden dalam 10 kecamatan di kabupaten Pekalongan.
Keyword: Shari’ah financial literacy, Descriptive statistic, Ordinal
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ABSTRACT
Financial literacy today become the one of famous issues among researcher and much of people done their research with financial literacy as the concern
topic, however few of them which concern on shari’ah financial literacy. Based on this fact, researcher aims from this research is to know the shari’ah
financial literacy level of rural people in Pekalongan regency and to know
the factors influencing shari’ah financial literacy. Using primary data with
descriptive statistic and ordinal regression test researcher try to find the relation between income, education, work field and financial relationship of the respondent from the total of 154 respondents in 10 districts of Pekalongan regency.
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1 CHAPTER I INTRODUCTION
A. Background
Total population number in Indonesia showed a growth rate relatively high as an average of 1.78% per year compared to the world population growth was 1.61% from year 1971 to 2010. In 2010 Indonesia has reached 237.64 million of total population, the community needs in term of financial product and services are also expected increase from year to year. Data from BPS (2012) show the number of people in productive age which from 15 to 54 years reached 59.98% or 142.54 million. This population growth is a potential side for financial services institutions for offering their products and services.
The potential of Indonesian societies that will take financial product and services advantages in the future are expected to be increased, considering from year 2000 due to 2012 GDP per capita of Indonesia is increased from Rp. 6.72 million to Rp. 33.24 million and Indonesia financial services sector also contribute as the important role who were doing financial intermediation Rp. 7.534.81 trillions per December year 2012. However, the role is not optimal (OJK 2013).
The Pew Forum on Religion & Public Life (2010) set 10 Countries with the largest Muslim population, Which placed Indonesia at the first rank with 12,7% from the world total population this statement is strengthen by Data from Badan Pusat Statistik year 2015 calculated 207,2 million of Indonesian
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people or (87,18%) is Muslim. From its population, 150 million people have an opportunity to access the financial product and services but in fact, only 2% who are able to access this is known by watching on Islamic banking market share.
With the largest Muslim population Country Indonesia has the advantages as potential place for the development of Cultural, Governmental and Financial instrument which based on the Islamic principles. Indonesian muslim people awareness of financial institution need which based on the Islamic principles appear in the end of 90’ Century, The emergences of Shari’ah banks is the sign of Islamic financial system starting point in Indonesia and also giving the refreshment air for Muslim people and as the main foundation of Islamic financial establishment.
In the last two decade Islamic financial Institution caught by stagnation this statement followed with the data from Otoritas Jasa Keuangan per September 2015 which shows the shari’ah financial market share in Indonesia only 5% from the total of financial asset. Year 2013 Global Islamic Economic Index placed Indonesia in the tenth grade when measuring the development of Islamic Economic whole the world.
As consequences of the changing structure of an economy, financial knowledge has become not just a convenience but an essential survival tool. A lack of financial knowledge can contribute to the making of the poor financial choices that can be harmful to both individual and communities (Kefela, 2010).
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One of factors affecting the low of Shari’ah financial market share in Indonesia is the low of Shari’ah financial literacy that remain in the society (Rahmawati, 2016). The use of financial product and services has done to fulfill individual need for consuming so individual preferences in using the shari’ah financial services determined by knowledge and understanding, ability or skills and individual confidence to fulfill the financial need that is called financial literacy.
Financial literacy defined as the ability to understand finance according to (Mason and Wilson, 2000) in Sardiana, (2016) financial literacy meant as the ability of a person to get, to understand and to evaluate relevant information on decision-making for understanding its consequences. Financial literacy makes a person able to make a decisions based on relevant information therefore, the understanding of information becomes important in every decision making process for each individuals (Sardiana, 2016). According to Chen and Volpe, (1998) the ability to manage personal finance has become increasingly important in today’s world people must plan for long term investment for their retirement and children’s education, they must also decade the short term savings and borrowing for a vacation, a down payment for a house, a car loan and other big ticket item.
It is important to know financial literacy if people want to avoid financial scum and now days there are financial advisers and planners who look after their client’s interest also consumers bombarded with varieties of financial product than as a Muslims we have to understand Islamic finance because it is
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our duty (Ahmad, 2010 in Chong, 2014). This is especially important to middle class, where the majority of consumers of financial product belong.
According to OJK National Survey of Financial Literacy year 2013, show financial knowledge (financial literacy) is 21, 84% or 1:5 from the total population of Indonesia with the well literate category. Where the financial inclusion is 59, 74% which dominated by financial product and services 57, 28%, followed by Insurance 11, 81%, funding 6, 33%, pawnshop 5, 04%, retirement fund 1, 53% and capital market 0, 11%.
Table 1.1
Literacy Index and Utility Index of Financial Sector
Classified Finance Insurance Funding Pension
Fund
Capital Market
Pawnshop
Well Literate 21.80% 17.84% 9.80% 7.13% 3.79% 14.58% Sufficient
Literate
75.44% 41.69% 17.89% 11.74% 2.40% 38.89%
Less Literate 2.04% 0.68% 0.21% 0.11% 0.03% 0.83% Not Literate 0.73% 39.80% 72.10% 81.03% 93.79% 45.44%
Utility 57.28% 11.81% 6.33% 1.53% 0.11% 5.04%
Source: National Financial Literacy Survey, 2013
Based on survey of OJK 2013, in term of society financial literacy improvisation Indonesian society financial literacy defied into four, those are 1. Well literate (21, 84 %), those who have knowledge and believe related
financial institution products and services include advantages and risk, right and obligation related to financial products and services, and capable to use financial product and services.
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2. Sufficient literate (75, 69 %), those who have knowledge and believe related financial institution products and services include advantages and risks, right and obligation related to financial products and services.
3. Less literate (2, 06 %), those who only have a knowledge related financial institution products and services.
Not literate (0, 41%), those who does not have knowledge and believe related financial institution products and services include advantages and risk, right and obligation related to financial products and services.
Financial literacy has the long term purpose for the whole of the society:
1. Increase the people literacy which less literate or not literate to the well literate.
2. Increase the amount of financial product and services users.
People have to understand advantages and risks than believe that financial product and services that they choose will increase their welfare than they can determine the suitable financial product and services as they need.
For the society, financial literacy will give a benefit such as:
1. Able to determine and harness the suitable financial product and services, and have the capability for maintaining the good financial planning. 2. Avoid people from the uncertainty investment in the financial instrument. 3. Understand the advantages and risk of financial product and services.
Financial literacy also contributed many benefit for the financial sector, financial institution and the society need each other therefore, if the society financial literacy is increase more people would like to use the financial
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products and services. Pekalongan as one of the part of central Java labeled as batik city and recognized at the national level. If the focus of people are concern to the industrial product such as batik and sarong here writer try to show how is the condition of other sector and how the poor people at Pekalongan which is most of them work as a farmer and life in the rural area.
Table 1.2
Percentage of Poor People 15 Years Old and above and Working Sector 2005-2010
Year Not Working
Work at the Agriculture
Sector
Work at the non-Agriculture
Sector
Total
2005 10,66 55,90 33,44 100,00
2006 16,06 49,80 34,14 100,00
2007 4,52 43,43 52,05 100,00
2008 0,94 38,16 60,90 100,00
2009 3,59 57,13 39,28 100,00
2010 0,96 46,32 52,72 100,00
Source: BPS 2016
From above data we know most of poor people are work at the agriculture sector which mean being a farmer, and most of people who doing an agriculture living in the rural area with the available land. The general way to attempted is agricultural which influence by the nature around the area such as climate, nature resources, which is nonagricultural work is a sideline job.
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Figure 1.1: Pekalongan Regency Map
According to the background above related to the lack of financial literacy at the Indonesian society writer would like to to analyze the condition whether people are unfamiliar with the shari’ah financial literacy or in contrary, especially in Pekalongan and writer concern on those who living at
the rural which came up with the title: “ANALYSIS OF FACTORS
AFFECTING SHARI’AH FINANCIAL LITERACY IN RURAL AREA, STUDY CASE OF PEKALONGAN”.
B. Problem Limitation
Study limitation aims to restrict the analysis problem may occur. This study restricted to the following limitation:
1. The dependent variable in this research is shari’ah financial literacy
2. The independent variables is income, education, work field and financial institution relationship
3. This research used primary data and the data collection used in this research is qualitative such as questionnaire and interview.
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4. Respondent are Pekalongan people who are living in rural area. C. Research Question
Based on the explanations that have been described above therefore, the problems in this research are:
1. Does income affect on rural people shari’ah financial literacy in Pekalongan?
2. Does education affect on rural people shari’ah financial literacy in Pekalongan?
3. Does work field affect on rural people shari’ah financial literacy in Pekalogan?
4. Does financial institution relationship affect on rural people sharaia financial literacy in Pekalongan?
D. Research Objectives
The specific purpose of this research is to study of shari’ah financial literacy at the specific. Based on research question, thus the objective of this paper is:
1. To analyze the relation between shari’ah financial literacy and the income of people who lived in the rural area of Pekalongan.
2. To analyze the relation between shari’ah financial literacy and the work field of rural people in Pekalongan.
3. To analyze the relation between shari’ah financial literacy and the financial institution relationship in the rural area of Pekalongan.
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4. To analyze the relation between shari’ah financial literacy and the education in the rural area of Pekalongan.
E. Research Benefits
This study contributes useful information for parties which are interested in shari’ah literacy there are some benefits for government, financial institution and academicians such as:
1. To the government, give benefit for government in term of conducting the social project in financial literacy education to support financial institution. 2. To financial institution, give benefit for financial institution in term of
expanding their financial product.
3. To scholar and academicians, give benefit to provide some additional information for further research.
F. Research Plan
The organization of the research is conducted, as follows:
1. Chapter I, Introduction. This chapter will explain the purposes and objectives of this research, the background of this research and aims to explore the objects of research.
2. Chapter II, Literature Review. This chapter included the theory related with this study, also include the previous research from the expert who was conduct similar research before with the difference object, included the hypothesis to conjecture the analysis of the study.
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3. Chapter III, Data Research and Methodology. Chapter three explain briefly the data which conduct in this research, and explain Analysis quantitative descriptive and ordinal regression methodology step to analysis the study. 4. Chapter IV, Overview. Chapter four will explain the general description
and overview the Shari’ah financial literacy in rural area of Pekalongan. 5. Chapter V, Research Finding. This chapter will explain in detail the result
of analysis which conducts by an Analysis of quantitative descriptive and ordinal regression.
6. Chapter VI, Conclusion. In this chapter will conclude the result of test in chapter four, the recommendation for the next research and the policy related to the Indonesia financial institution.
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CHAPTER II
LITERATURE REVIEW
A. Theoretical Framework
1. History of Islamic Economic In Indonesia
Indonesia Financial System divided into two, financial system and Non-bank financial institution. Non-Non-bank financial institution is financial that based on the legislation law which collected the fund from the society in term of depository financial institution and distribute in term of credit or in others and give the services for the payment way, such as public bank and society bank for credits. Non-bank financial institution is financial institution which the activities not in order to collect the direct fund from the society in term of saving, such as: pension fund, insurance, venture fund, and pawn shop. Historically the Indonesia financial legislation system has some changing which at first is 27 October 1988 change since 1992, those are:
a. Law No 7 Year 1992 About Finance b. Law No 2 Year 1992 About Insurance c. Law No 11 Year 1992 About Pension d. Law No 8 Year 1995 About Funding Market
e. Law No 10 Year 1998 About Changing of Law No 7 Year 92 about Finance
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2. Financial Literacy
Financial literacy is an active process in which communicating information is only the beginning and empowering consumers to take action to improve their financial well- being is the ultimate goal (Abdullah and Chong 2014). Financial literacy according to (Miller et.al. 2009 in Chong 2014) is the combination of consumers or investors understanding of financial product, concept, their ability and confidence to appreciate financial risk and opportunities to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.
Financial literacy is process or activities for improving the knowledge, confidence and skill in whole society than they can manage their financial needs (OJK). Financial literacy defined as the ability to understand finance according to (Mason and Wilson (2000) in Anna Sardiana (2016) financial literacy meant as the ability of a person to get, to understand and to evaluate relevant information on decision-making for understanding its consequences.
Nevertheless, studies on financial literacy have not come up with a consensus definition of financial literacy. However, (Remund, 2010 in Ma’ruf, 2015) was able to pin point that many conceptual definitions of financial literacy fall into five categories:
1) Knowledge of financial concept
2) Ability to communicate about financial concept 3) Aptitude in managing personal finance
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4) Skill in making appropriate financial decisions 5) Confidence in planning effectively
In addition according to Remund 2010 in Ma’ruf, 2015, financial literacy is a measure of the degree to which one understands key financial concepts and possesses the ability and confidence to manage personal finances through appropriate, short term decision making and sound, long range financial planning, while mindful of life events and changing economic condition.
3. Shari’ah Financial Literacy
Shari’ah financial literacy is related to knowing product and financial services able to differ between shari’ah and conventional bank also can influence manner of the people in order to take economic decision according to shari’ah. Shari’ah finance is kind of finance based on shari’ah or Islamic principles. Shari’ah which mean “road to the water springs”, filled with moral goals and tough of truth. Therefore shari’ah is more than the role of law. The fact, shari’ah represented the argument that every people and governance obey to the justice under the law (Rahmawati, 2012).
Abdul Hamid and Bordin, (2001) in Azmi and Anderson, (2015) state a study conducted in Malaysia in 1994, regarding knowledge in Islamic banking showed that almost 100 percent Muslim population was aware of the Islamic bank , however out of this 27,3 percent completely understood the differences between Islamic bank and conventional banks and only 38,7 percent patronize the Islamic bank strictly because of religion.
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4. Shari’ah Financial Institution
Financial institution is a business entity which the wealth basically such as financial asset or financial claims compared to the non-financial assets or rill assets, financial institution give the credits to the costumers and plant their fund in term of securities (Siamat, 2001). Shari’ah finance is a financial form based on shari’ah or Islamic law principles. Indeed, shari’ah represented an idea that all of people and governance is submissive under the justice of law. This is one of term which summarized the way of life that Allah’s tough to his creature include all of things related to business contract until worship, term of “suitable with the shari’ah” in picturing all allowed things in Islam (Abdullah and Chee, 2012). In general, shari’ah bank is financial institution which the basic business is give the people credits and other services in line of payment and the operation of cash flow suited with the shari’ah principles Sudarsono (2008).
The movement of modern Islamic financial institution started with a local saving bank non-interest that operated in Mit Ghamir village, blank of Nil river Egypt at 1696 by Dr. Hamid An-nagar in Muhammad (2011).
The need of Islamic private bank in rural and international, followed by the existence of other supporting institution such as insurance, pawn shop and baitul mal wa tamwil. That based on Islamic principles and lately Dow jones came out what we called by Islamic Index which cover the stock index that sold with the Islamic way (Muhammad, 2011)
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5. Factors of Financial Literacy
The social research center, (2011) in Sari, (2015) factors which describe the differences of financial literacy level:
a. Age, there are positive affect on the attitude as an indicator of financial literacy at 25-34 years old which at 18-24 there is no influence. This is in line with the more knowledge of financial products they have the more financial transaction used for their needs.
b. Financial knowledge have a positive relation to mathematics ability, people who has the knowledge will be able to control their financial expenses. This show with the general financial knowledge and mathematics ability people able to choose the suitable financial products, watching the financial condition, and know the latest condition of financial situation.
c. Financial attitude has the positive and negative relation to the finance indicators.
d. House hold income, has the positive significant relation to financial control which mean more income lead to the better financial control. e. Education and work field has a relation with some of the financial
indicators, because in some point that education and work field is important and other is not.
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Bushan and Medhury, (2013) in Margaretha and sari, (2105) found financial literacy level influenced by gender, education level, income, kind of job or nature of employment, and work field, where not influenced by geography and age (Margaretha and Sari, 2015)
a. Financial literacy and income
Financial literacy increases trough with the income increases (Scheresbergh, 2013) in Margaretha (2015). There is a significant influence between financial literacy and the income of people (Margaretha and Sari, 2015). Amount of income has the significant influence with the level of shari’ah financial literacy (Rahmawati, 2016). b. Financial literacy and education
More the education of people will influence to the more understanding of financial literacy (Nidar and Bestari, (2012) in Margaretha and Sari (2015). Financial literacy and education have the significant relationship (Margaretha and Sari, 2015). Variable of education level positively affect on financial literacy (Amaliyah and Witiastuti, 2015). The Educational background has the significant influences with the shari’ah financial literacy (Rahmawati, 2016).
c. Financial literacy and work field
Financial literacy level is influenced by work field (Bushan and Medhury, 2013) in Sari (2015). Education and work field has a relation with some of the financial indicators, because in some point it is suggest the important things and some doesn’t the social research center (2011).
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d. Financial literacy and financial institution relationship
The respondent relationship trough financial institution has the significant influences to the shari’ah financial literacy (Rahmawati, 2016).
6. Shari’ah Financial Products
For the sufficient of capital and financing, shari’ah bank has the different requirement with a conventional bank. In general, the devices of shari’ah bank consist of three categories:
a. Financing products b. Funding products c. Services products Financing products:
a. Wadi’ah (giro).
b. Mudarabah (saving and deposit). Funding products:
a. Profit sharing (mudarabah dan musarakah).
b. Buy and sell (murabahah, istisna’, salam, dan ijarah). c. Services (rahn, wakalah, kafalah, hawalah, qard)
Non- Bank (services) products: a. Islamic insurance/ Takaful b. Islamic stock
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Islamic banks have the purposes those are, guide the society economic activities for interaction in term of Islamic value, to build the balance and justice system in term of economic investment, to develop the social living standard with the easiness for poor people, poverty alleviation, to maintain the economic stability and become savior of the society from konventional bank dependency (Sudarsono, 2008).
7. Financial Institution and Financial Literacy Classification a. Depository financial institution or depository intermediary.
Financial institution collecting the fund directly from the society in term of deposits such as giro, saving, or time deposit which accepted from depositor or unit of surplus such as: Corporation, Government and household with the surplus income after the consumption expenses.
b. Non-Depository financial institution or non-bank financial institution. Financial institution included of this category is financial institution which the business activity where characteristically has a contract or contractual institution which is collecting the fund from the society with offering the contract for consumers protection from the uncertainty risk such as insurance and pension program than called by insurance company and pension company (Siamat, 2001).
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According to Chen and Volpe (1998) in Farah and Sari (2015) financial literacy categorized into three groups bellow:
a. < 60% which is those people who have the low financial literacy. b. 60%–79%, which mean people who have the medium financial literacy. c. 80% which mean those are people who have the high financial literacy.
Based on the Indonesia financial literacy national strategy, people financial literacy are classified into 4, those are:
a. Well Literate, Those who have knowledge and believe related financial institution products and services include advantages and risk, right and obligation related to financial products and services, and capable to use financial product and services.
b. Sufficient Literate, Those who have knowledge and believe related financial institution products and services include advantages and risk, right and obligation related to financial products and services.
c. Less Literate, Those who only have the knowledge related financial institution products and services.
d. Not Literate, Those who does not have knowledge and believe related financial institution products and services include advantages and risk, right and obligation related to financial products and services.
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8. Financial Literacy Consumer Attitude
The consumer attitude toward a products or services, according to the theory of three component attitude model determined by three attitude components:
a. Cognitive b. Affective
c. Conative
From the three components that can affect the attitude are confident and feelings. Engel (1995) in Anna (2016) said on some product or services attitudes only depend on the confidence while other products or services attitude depend on evaluation of product or services. Meanwhile, the relationship between attitude or conative or interest can be described as a cause and effect relationship where the attitude of person can affect to certain moralities (Mardiana, 2016).
An attention describes the conative attitude components that related to some preferences to perform regarding specific attitude. Based on some interpretations, conative components can be included the attitude (real) behavior itself.
9. Financial Literacy of Islamic Consumption Theory
In Islamic consumption analysis that people manner of consumption not only to fulfill their body needs but also for fulfill their spirit needs. So in term of manner of consumption a Muslim always pay their attention to the Islamic principles for an example the goods that will be consumed it was halal or not,
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what is the purposes behind the consumption, how is the moral and manner as a Muslim when they consume something and how is the consumption of a Muslim is related to their society.
Islamic economy aims to realize the long term of economic growth and maximizing the welfare or falah. Falah mean the personal needs of people is fulfilled trough the company of social balance and concern at the family values also attitude (Chapra, 2000) in Sudarsono, (2008). For the consequences some of basic attitude is needed in the economy to achieve the concept of falah (Naqwi, 1994) in Sudarsono, (2008), those are first, the existence of god (Allah) as the control center of the economic activities because of the limited knowledge of people in contrary with god. Second, balances in term do not very excessive, balance of distribution nor the individual and social needs. Third, in term of freedom of choices but it is bordered with the obligation of each people (Sudarsono, 2008).
10. Rural Area
The 1996 census defines “rural areas” as sparsely populated lands lying outside urban areas which urban have the minimum populations of 1.000 and population densities of 400 or more people per square kilometer (Statistic Canada, 1999) in Canada Statistic, (2002).Rural and small town refers to the population living outside the commuting zones of larger urban center specifically outside census metropolitan area (Medelson and Bollman, (1998) in Canada Statistic, (2002).
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Law number 2 year 1999, Rural area is the unity of society law which have an authority to manage and organize society needs based on the origin custom that recognized by the national governance system and include in the area.
Law number 6 year 2014, Rural is rural and custom rural or called by another name next called by rural, is unity of society law which has the limit of area obligated to manage and organize the government jobs, society needs according to society initiative, origin right, and or traditional right which recognized and be respected by the governance national system of republic of Indonesia.
B. Literature Review
Financial literacy is first and foremost about empowering and enlightening consumers so that they are knowledgeable about finance in a way that is relevant to their lives and enables them to use this knowledge to evaluate product and informed decisions. As the consequences of the changing product of economy, financial knowledge has become not just convenience but an essential survival tool. A lack of financial knowledge can contribute in making of poor financial choices that can be harmful to both individual communities. Mounting evidence shows that those who are less financially literate are more likely to have problems with debt, are less likely to save, are more likely to engage in high cost mortgages, and are less likely to plan for retirement. Without a certain level of financial literacy, consumers might not purchase the financial products and services they need and might be ill-equipped to fully appreciate their right and responsibilities as financial
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consumers, and to understand and appropriately manage the variety of risk (Kefela, 2011:9) Financial literacy called as the ability of people to get, understand, and evaluate the relevant information for the decision making with the understanding of financial consequences that appear Krisna (2010), in Amaliyah and Witiastuti (2015).
Looking to the economic condition today, financial literacy contribution is important. People need the basic knowledge of finance and skill for processing the effective financial resources for the welfare of their life, especially for the entrepreneur which is commonly face with the financial decision making and more which related to the financial corporation. Less of access will lead to the low of access to the financial institution (Amaliyah and Witiastuti, 2015).
The research result shows that Islamic financial literacy significantly affected to the shari’ah financial services usage. At the more research, the knowledge indicators shows half of them are significant to the financial literacy preference usage, ability indicator and self not affect on shari’ah financial literacy preferences (Sardiana, 2016).
The financial crisis has also led to the renewed focus of the world to Islamic finance. The Islamic financial industry has been flooded with various different types of financial instruments and asset for not only Muslim investors but also the non-Muslim investors to choose from. Hence, an understanding of features and differences between these instruments and
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assets are pertinent in order of invertors irrespective of whether they are Muslim or non-Muslim to manage their portfolio. With respect to making these Islamic financial products acceptable to wider spectrum of investors and business people alike, the governor of central bank of Malaysia several years ago has pointed that enhanced financial literacy on Islamic financial products will facilitate transactions, with a clear understanding and appreciations of the unique characteristics and features of Islamic finance and its real economic value (Abdullah and Anderson, 2015).
Margaretha and Sari, (2015) said many people with the financial problem in one side just not because of the low of their income rather than because of the false in income allocation, the low of financial literacy cause unwise income allocation therefore with the financial ability will lead to the right choices. Financial literacy in term of understanding to the all aspect of finance is not burden or to tide people on doing their life but with the financial ability will lead people for the better life (Warsono, (2010) in Margaretha and Sari, (2015).
The financial literacy index of financial institution that exist in Indonesia at the FEB Unsoed students still low at only $4.76 for student who are well literate and amounted to 95.24% in banking products and services and the cause of these is they do not get the financial education from the family as a child (80%), not taught in formal education as a child (77%), not to get the material and a deep understanding of the subject were obtained during the study (70%), and the limited funds received from parents and therefore can’t
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be used to invest in products and services of financial institutions (93%) (Lestari, 2015).
It was several years ago when the governor of central bank of Malaysia pointed out that in order to make Islamic financial acceptable to a wider spectrum of investors and business people alike, financial literacy on Islamic financial products need to be enhanced, This is in order to facilitate transactions, with a clear understanding and appreciation of the unique characteristics and features of Islamic finance and its real economic value (Abdullah and Chong, 2014).
Financial education is important to both the security of individuals and the security of nation. Enlightened societies today strive to ensure social cohesion as an integral part of economic progress, Interesting and well-paid jobs are central pillars of social cohesion, but so are savings and the building of capital to provide individuals with financial security, especially for their retirement. That cohesion can be seriously undermined by major imbalanced of wealth within nations. Major inequalities between elements of society, especially along ethnic or racial lines, can be recipe for disaster. One way to avoid that catastrophic scenario is to ensure that everyone participated in wealth, both in its creation and distribution. Along with good employment prospect, financial education can play a key role in helping individuals and families build their assets. Just as health education in primary and secondary schools helps children develop good life-long dietary and hygiene habits, necessary to enable them to participate sensibly in financial markets.
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Moreover, well-informed financial consumers ultimately lead to better financial markets, where rogue products are forced from the market place and confidence is raised (Johnston, 2005).
In this few of years, in the whole part of the world financial literacy issue is concerned to discuss. An exclusive attention to the financial literacy because of the willingness of such country for having the good quality people and financial good understanding, will affect to the finance and economic condition, this financial literacy is related to the ability of people at the management and doing the planning which related to the finance (Ma’ruf and Desiyana, 2015).
Halal literacy and Islamic literacy are two crucial concepts where it can lead to the behavior of person toward its decision especially in adopting the Islamic financing, literacy has been studied widely in many fields including in consumer behavior context. Literacy usually associated with knowledge and it shows that knowledge is one element things that lead to the behavior of a person in the Holy Qur’an in surah Al-an’am also states that knowledge or literacy is necessary to that a Muslim can differentiate what is lawful and prohibited in Islam “why should you not eat of (meats) on which Allah’s name hath been pronounced, when he hath explain to you in detail what is forbidden to you – except under compulsion of necessity? but many do mislead (men) by their appetites unchecked by knowledge. Thy lord knoweth best those who transgress” (6:119) (Antara, et.al, 2016).
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Consumptive life style influenced by many factors one of those is the easiness of transaction, industries development and life style which is adopted, these things make many people irrational in term of their consumption moreover today money is unnecessary when people want to buy any kind of product or services because the existence of credits card and it is popular in the society (Margaretha and Sari, 2015)
Lisa Xu and Bilal Zia (2012) in Lestari, (2015) said that term of financial literacy include the concept which is start from the awareness and understanding about financial products, financial institution, and concept of financial ability such ability to count compound interest payment and the general financial ability such as money management and financial planning. According to Lusardi and Mitchell (2000) in Ma’ruf (2015) that gender is one of factor in the financial literacy, they explain the gender differences in Sweden which female is rarely make any decision at the house hold. Kefela (2011) said financial literacy a broad concept that include both the information and behavior it is relevant for all consumers regardless of their wealth or income. Bank in the developing countries have to provide financial literacy to their consumers because of the positive direct impact this can have an access to finance and saving which in return support livelihood, economic growth, sound financial system and poverty reduction.
The understanding of individual finance is needed with this people able to decide any products and services that suitable with their current condition, also with the right understanding of financial product and services will not
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lead them to the negative cash flow. Therefore knowledge and the good understanding is absolutely needed by the people in their daily life to maximize the uses of a financial instrument, financial product that and able to decide the correct decision in other word every people need to have the good financial literacy (Mendari and Kewal, (2013) in Margaretha and Sari (2015).
Financial literacy topic become important among expert because of 2008 crisis, the expert said that the main cause of the economy global crisis is the low of financial literacy. On that time people became more consumptive more than what they able to earn for income, they have much of credits with the high rate of credit card user because of this financial institution lost their liquidity and bankrupt (Lestari, 2015).
In every people daily life, there are 3 financial decision commonly used those are:
1. How much the amount they should consume in every period of time.
2. Is there any surplus of income and how to maintain this surplus for investment
3. How to earn for consumption and this investment.
In order to achieve the financial welfare, people have to have a knowledge and attitude through the healthy individual financial implementation. Knowledge, manner and individual financial implementation at the financial management is known by financial literacy Widayati (2012).
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Term of Financial literacy is an ability of people for taking decision of their own finance. Remund (2010) in Ma’ruf (2015) explained five domain of financial literacy is:
1. Knowledge of financial concept.
2. Ability to communicate related to financial concept. 3. Ability to maintain the individual finance.
4. Ability to take any financial decision.
5. Believe in order to plan future finance (Margaretha and Pambudhi, 2015).
According to the researchers INDEF Aviliani, the need for education to the community of financial products both banks and nonbank very urgent to people not be deceived by those who are not responsible. Research conducted Gonthor, et al (2006) from Bapepam-LK in terms of understanding the capital markets, 80% of respondents were familiar with capital markets, 50% of them knew the capital markets of the news media, 25% of the respondents knew and 50% claims to know enough about capital market products (Nidar and Bestari, (2012) in Margaretha and Sari (2015).
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Table 2.1
Summary of Literature Review
No Books & Journals Analysis Tool Research Output
1 Juliana Rahmawati
(2016) “Faktor Yang Mempengaruhi Literasi Keuangan Syariah Pada
Pelaku UMKM di Daerah Istimewa Yogyakarta” Analysis data statistic descriptive quantitative method and regression ordinal logistic test
The financial literacy of SMe in Yogyakarta is intermediate with
60%.Income and respondent relation to
financial institution affect on shari’ah financial literacy SMe
of Yogyakarta.
2 Irma and Sugeng Suroso
(2016),“Shari’ah Financial Literacy And
Effect On Social Economic Factors.
Used primary data from questionnaire
with descriptive statistic method
Research shows social economy influence to the financial knowledge
and people attitude in term of economic
activity.
3 Riski Amaliyah dan Rini
Setyo Witiastuti (2015),“Analisis Faktor
yang Mempengaruhi Tingkat Literasi Keuangan di Kalangan
UMKM Kota Tegal”.
Survey and analysis of logistic biner regression method.
Research shows financial literacy level
of owner of SMe in Tegal city include the
high category with mean of 11,79. Gender and education affect on financial literacy level.
4 Maria Rio Rita dan
Benny Santoso (2015), “Literasi Keuangan dan Perencanaan Keuangan pada Dana Pendidikan
Anak”.
Questionnaire with interview and Data
analysis of descriptive statistic.
Research shows financial literacy and
management in educational fund of children in house wife
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No Book and Journal Analysis Tool Research Output
5 Ahmad Ma’ruf dan
Tasya Desiyana (2015),“Literasi Keuangan Pelaku
Ekonomi Rakyat”.
This research use the primary data from questionnaire with descriptive statistic
and chi- square analysis.
Research shows majority of SMe has the
intermediary financial literacy level with 73,8%. Beside of that the ability of SMe has the intermediary level
too with 57,5%.
6 Farah Margaretha dan
Reza Arief Pambudhi (2015) “Tingkat Literasi
Keuangan Pada Mahasiswa S-1 Fakultas
Ekonomi”.
This research use the primary data from questionnaire with descriptive statistic
and chi- square analysis and ANOVA
test.
Research shows financial literacy level
in category of low by 48,91% and influences
between gender, age, cumulative score index
and parent income.
7 Sri Lestari
(2015),“Literasi Keuangan Serta Penggunaan Produk dan
Jasa Lembaga Keuangan”.
Qualitative method used descriptive
statistic.
Financial literacy of student FED Unsoed is
low because well literate include 4,76 % and financial products knowledge 95,24%. Cause of it is they do not got the financial education from the child or their parent
are no concern of it .
8 Yulia Indrawati (2014),
“Determinan dan Strategi Peningkatan
Literasi Keuangan Masyarakat Perkotaan di
Kabupaten Jember”.
Quantitative method with data existing
and table data.
Research show in term of aggregate financial literacy level of urban people in Jember is low
whether basic financial literacy and advanced
financial literacy. 9 Anastasia Sri Mendari &
Suramaya Suci Kewal (2013), “Tingkat Literasi
Keuangan di Kalangan Mahasiswa STIE MUSI”.
Statistic Descriptive The indication for financial decision in some cases show the low of knowledge of long investment term
which give the high profit and risk from deposit and insurance
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No Book and Journal Analysis Tool Research Output
10 Abdullah, M.A. and
Anderson, A. 2015. Islamic Financial Literacy Among Bankers
in Kuala Lumpur.
Quantitative method with questionnaire
Some the determinant of financial literacy: View of banking and
Islamic banking product, parent influence, factor on securities, views on conventional banking
product, attitude on personal financial management, ability on
wealth planning, management attitude
Islamic product. 11 Antara, P.M., Musa, R.
and Hassan, F.
2016.Bridging Islamic Financial and Literacy Halal Literacy: The Way Forward in Halal
Ecosystem.
Qualitative and qualitative methodology
The proposed
measurement of halal financial literacy and Islamic financial literacy can help the policy maker in
understanding the level of literacy among consumers, especially from halal business products perspective. 12 Sardiana, Anna. 2016.
The Impact of Literacy To Shari’ah Financial Literacy.
Descriptive research Research shows Islamic financial literacy significant influence preference use Islamic financial services.
13 Kefela, G. 2011.
Implication of Financial Literacy in Developing Countries.
It is an essential element in enable people to manage their financial affair can make important contribution to the soundness and efficient the financial system and economy.
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No Book and Journal Analysis Tool Research Output 14 Johnston, Donald. 2005.
Important of Financial Literacy in The Global Economy. Kuala Lumpur.
Financial education is important to both the security of individuals and the security of nations.
15 Abdullah, M.A. and
Chong, Rosita. 2014. Financial Literacy: An Exploratory Review of The Literature and Future Research.
Much of the current works have been on the literacy on
conventional financial knowledge. Since there is a renewed interest in in islamic finance, more studies should be undertaken in order to determine the level of people literacy of people
C. Research Framework
This research aims for analyzing the shari’ah financial literacy at the rural people of Pekalongan, Central Java Province. The figure that describes how the framework of research would be conducted can be seen as below.
Figure 2.2
Theoretical Frame Work income
work field education
financial institution relationship
Shari’ah Financial Literacy
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D. Hypothesis
Based on the review and discussion related to the previous study, this study developed the hypothesis:
H1: There is positive and negative significant relationship between income and the shari’ah financial literacy.
H2: There is positive significant relationship between education and the shari’ah financial literacy.
H3: There is positive and negative relationship between work field and the shari’ah financial literacy.
H4: There is positive significant relationship between financial institution relationship and the shari’ah financial literacy.
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CHAPTER III
METHODOLOGY
A. Research Object
The object of this research is the relation between some variable such as income, work field, education and financial relationship trough shari’ah financial literacy variable used in this research consist of one dependent variable and four independent variables.
The dependent variable is:
1. Shari’ah financial literacy
And the independent variables are:
1. Income 2. Work field 3. Education
4. Shari’ah financial institution relationship
B. Type of Data
This research used a primary and secondary data with the primary data as the based, primary data is data which obtained from the research subject. This data is information obtain from the respondent explanation, questionnaire answers and direct interview to the respondent related to the shari’ah financial literacy.
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And secondary data obtained from the journals, articles, internet and previous study related to the research variable.
C. Collecting Sample Technique 1. Population
Population is a generalization area contained of object or subject which has the quality and any characteristic determined by the researcher for being studied and taking conclusion from that Sugiyono (2014). Population that will be included in this research is people who lived in the rural area of Pekalongan, Central Java with the different background. Population of Pekalongan people in term of year 2010 up to 2014 is increasing by 6491 people with the growth rate of 0,75 in year 2014.
Table 3.1
Population of Pekalongan Regency by Sex 2010-2014
Year Male Female
2010 417.406 421.215
2011 423.884 424.826
2012 427.785 433.581
2013 427.815 433.267
2014 431.002 436.571
2015 434 185 439 787
Source: BPS 2015
2. Sampling Method
Sample is a part of amount and characteristic own by the population. Sample taken from the population have to represent of population (Sugiyono, 2014).
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Sample taking technique used in this research is simple random sampling. Simple random sampling technique is a simple technique because member taking sample from the population is random without paying attention to the society level. This way is taken if the member of population considered as homogeny (Sugiyono, 2014).
Sample random sampling is choosing process of unit sampling in such a way than every unit of sampling in the population has the same chance for being choosing in to the sample. Taking sample with this way can be done with the lottery or random table (Sanusi, 2012)
Amount of sample used in this research is 154 respondents which separate in 10 districts from the total of 19 in Pekalongan Central Java Province. The minimum respondent that delivered by long is 100 than writer decided that in this research use more than the minimum amount of respondent (Gudono, 2014) in Rahmawati, (2016).
D. Data Collection
Data collection technique in this research is using the questionnaires. Questionnaire is data collection technique with giving the bunch of written questions or statements for the respondent to answer (Sugiyono, 2014).
Questionnaire used in this research is likert scale. Likert scale is an ordinal measurement used to measure manner, opinion, and people perception related to social phenomenon. Therefor for knowing the measurement of respondent answers this research is using the research instrument such as questionnaire,
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researcher use the likert scale (likert’s summated ratings) Sugiono in Basuki (2015). Result range that given is 1 up to 4.
Likert Scale is scale based on additional respondent attitude in responding the questions related to indicators from the concept or measured variable. In this condition, respondent asked to agree or disagree in each of questions (Sanusi, 2012). This range used for standardize the appraisal of respondent, directly stuffed by the people who lived in the Pekalongan rural area.
Table 3.2 Likert Scale Positive
question (+)
Negative question (-) Alternative
answer
Score Alternative answer Score
Very agree 4 Very agree 1
Agree 3 Agree 2
Disagree 2 Disagree 3
Very disagree 1 Very disagree 4
Source: Nur Rohmah, 2014
For interpreting the result of research data collected is conversed to the likert scale category using the guidance result conversion as below:
Table 3.3
Guidance of Score Conversion
Score Conversion Formula Category
1 X>Mi+1 (SDi) High
2 Mi-1 SDi ≤X≤Mi + 1 (SDi) Moderate
3 X<Mi-1 (SDi) Low
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Explanation:
X = Total Score
SDi = Ideal Standard Deviation
= 1/6 (ideal maximum score – ideal minimum score)
Mi = Mean Ideal
= ½ (ideal maximum score + ideal minimum score) E. Operational Definition of Variables
1. Dependent Variable
In this research the bound variable is shari’ah financial literacy, which is ability of people for managing the finance in corresponding with shari’ah principles. For measuring shari’ah financial literacy variable, questionnaire will be spread with the questions and statements related to shari’ah financial literacy.
2. Independent Variables
Unbound variables that used in this research is: (1) Income which this variable explain the respondents earning each month that will classified into four groups: < 1 million, 1 million - 5 million, 5 million - 10 million & >10 million; (2) Education: This variable explain educational level of respondents, which classified into: Elementary School, Junior High School, senior High School, Diploma, Strata 1, Strata 2; (3) Work Field: explain the jobs of respondents which stay in this ten districts. (4) Financial institution relationship: which mean respondents are include as the costumer of financial institution such as bank, insurance, pawn shop the shari’ah or in contrary.
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F. Quality Test of Research Instrument 1. Validity Test
Validity Test is used for measuring the legitimacy and validity of the questionnaires. Called valid if the question can express the something that will measure with the questionnaire Ghazali (2001). The validity measure used in this research is construct validity by SPSS version 15.0. Construct validity is validity that asking whether the question point at the instrument is suitable with the related knowledge concept (Nurgiyantoro, 2009) in Rahmawati, (2012).
Validity determination related to the questions with seeing the column corrected column correlation, significant examination is using r table in significant level 0.05. If result of r arithmetic ≥ r table so item called valid, if r arithmetic < r table so item called not valid. In this research using 0, 1330 as the data measurement of validity, based on the total respondent which is 154 respondents as a sample of the citizen of Pekalongan.
2. Reliability Test
Reliability test is a test to measure questionnaires as indicator of variable or construction. A questionnaire called reliable if the respondent answers related to the question is consistent or stabile from time to time.
Reliability measurement used in this research by the cronbach alpha > 0.07 that categorized as the sufficient level of reliability Nunnally, (1994) in Ghozali, (2011). If the value of cronbach alpha between 0.05 – 0.07 mean that
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the result of the reliability test on data at the level of moderate Basuki, (2017).
3. Hypothesis Test
a. F - Test (Simultaneous Test) for the first hypothesis. This test used to know if the independent variable has the significant influences to the dependent variable together. With the comparison result of F count and F table in error degree at 5% its mean if result of F count > from F table, than all of the independent variables has the significant influences together to dependent variable or the first hypothesis is accepted.
b. T - Test (Partial Test) for the second hypothesis. This test used to know if the independent variable has the significant influences to the dependent variable. With the comparison result of t count of every independent variables and t table in error degree at 5% its mean if result of t count > from t table, than the independent variables has the significant influences to dependent variable or the first hypothesis is accepted.
G. Data Analysis
1. Descriptive Statistic
Descriptive statistic is statistic used for data analysis by describing or drawing the collected data as it is without any additional and intentional to conclude the collected data applied for general or generalization. (Sugiyono, 2014). Descriptive statistic give the description related to the data looked from the mean, standard deviation, varian, maximum, minimum, sum, range, kurtosis and skewness Ghazali (2001).
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Descriptive research is research design in order to arrange the systematic picturing related to scientific information which came from object or subject of research. Descriptive research focused in the systematic explanation with the fact obtainable from the research, if researcher intent to describing the data from one of variable of research, the researcher can use the descriptive statistic (Sanusi, 2012).
2. Logistic Regression
Logistic regression is closely similar with discriminant analysis which we want to test the probability of dependent variable is it explained by the independent variable, truly in this such of case can be solved by using discriminant analysis but normal multivariate distribution assumption can’t be filled because of independent variable is mixed between matric variable and non- matric variable. In this case logistic regression used because no need to use normality test of the independent data (Ghozali, 2011).
Such as an multinominal logistic regression, if the category of dependent variable is an ordinal (rating) for an example the condition of bank healthy, healthy enough, unwell and not healthy where healthy have the higher value than healthy enough, and healthy enough have the higher value than not healthy so logistic analysis must be using ordinal regression or called PLUM (Ghozali, 2011).
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CHAPTER IV
RESEARCH OVERVIEW
A. Research Overview
This shari’ah financial literacy research placed in Pekalongan part of the central java province focus on some categorized as a rural where most of them are far from the central government institution, facilities and financial institution. Which the sample is the citizen of some districts in Pekalongan such as Buaran, Doro, Lebakbarang, Paninggaran, Kandangserang, Kajen, Talun, Bojong, Karanganyar and Kedungwuni and the total of sample that gathered by researcher is 154 samples.
Research data include the respondent identity, perception and the bunch of questions asked related to shari’ah financial literacy as a measurement of the financial literacy level of Pekalongan society who lived in a rural area. In this research data description include diagrams and frequencies here is the result of data process using the SPSS 15.0.
1. Amount of respondent
After choosing some places for collecting an information which related to the ability and knowledge of people in shari’ah financial side than researcher got some respondent and in this research the total amount of respondent is 154 people of Pekalongan citizen with the sample technique is random sampling and separated in 10 s shows as below:
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Table 4.1
Amount of Respondent Depend on District
No Respondent
1 Buaran 20
2 Doro 19
3 Lebakbarang 12
4 Paninggaran 18
5 Kandangserang 10
6 Kajen 15
7 Talun 20
8 Bojong 10
9 Karanganyar 22
10 Kedungwuni 8
Source: Researcher Data
Table shows that most of respondent came from Karanganyar with 22 people, followed by 20 people from Talun and 20 people from buaran also 19 from Doro and 18 from Paninggaran, 15 respondent came from Kajen, 10 from kandangseraang and also 10 from Bojong while the last 8 people came from Kedungwuni.
Data respondent percentage which belong to the places where they lived will be explained more with the diagram as below:
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Picture 4.1
Diagram of Respondent Depend on the District
The diagram shows the percentage of respondent according to their from the ten s we can see that 15% most of them placed in Karanganyar, 14% both of Buaran and Talun, 13% Doro, 12% Paninggaran, 10% Kajen, 8% Lebakbarang, both of 7% Kandangserang and Bojong and the last 5% from Kedungwuni.
2. Gender
According to the respondent gender in this research from the total of 154 respondent 77 persons is a male and 77 person is a female.
Table 4.2
Respondent Data According to Gender
Frequency Percent Valid
Percent
Cumulative Percent
Male 77 50,0 50,0 50,0
Female 77 50,0 50,0 100,0
Total 154 100,0 100,0
Buaran 13% Doro 12% Lebakbarang 8% Paninggaran 12% Karanganyar 14% Kandangserang 7% Kajen 10% Talun 13% Bojong 6% Kedungwuni 5%
Respondent Place
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Picture 4.2
Respondent Gender From the chart above shows that percentage of male and female of
research respondent is balance is 50% for both of male and female.
3. Age Range of Respondent
The respondent age range in this research is 14 – 24, 25 - 35, 36 - 46, 47- 57, 58 - 68. As shows as the table below:
Table 4.3 Age Range Table
Frequency Percent Valid
Percent
Cumulativ e Percent
14 Y – 24 Y 12 7,8 7,8 7,8
25 Y – 35 Y 40 26,0 26,0 33,8
36 Y – 46 Y 59 38,3 38,3 72,1
47 Y – 57 Y 36 23,4 23,4 95,5
58 Y – 68 Y 7 4,5 4,5 100,0
Total 154 100,0 100,0
50% 50%
Gender
Male
(60)
Based on the table 7,8% respondent is in the range of 14 years old to 24 years old, 26,0% in range of 25 years old to 35 years old, 38,3 in range 36 years old to 46 years old, 23,4% in range 47 years old to 57 years old and 4,5% in range 58 years old to 68 years old.
Picture 4.3 Respondent Age Range
From the chart above we can conclude that respondent which is in the range of 14 years old to 24 years old is 12 person, in range of 25 years old to 35 years old is 40 person, in range 36 years old to 46 years old is 59 person, in range 47 years old to 57 years old is 36 person and in the range of 58 years old to 68 years old is 7 person.
12
40
59
36
7
14-24th 25-35th 36-46th 47-57th 58-68th
Age Range
(61)
4. Work Field
From the respondent data here shows where they work at, they have a different field include student, housewife, farmer and e.c.t it is the table of respondent data depend on their work field:
Table 4.4
Respondent Data depend on work field
Frequency Percent Valid
percent
Cumulati ve percent
Student 4 2,6 2,6 2,6
Housewife 16 10,4 10,4 13,0
Farmer 18 11.7 11.7 24.7
Village Officer 47 30,5 30,5 55,2
Private Worker 55 35,7 35,7 90,9
Teacher 14 9,1 9,1 100,0
Total 154 100,0 100,0
Source: Researcher data
From the table above we can see the respondents work as a student, housewife, farmer, village officer, private worker and teacher huge number of respondent work as a private worker 55 person (35,7%), 47 person (30,5%) work as village officer, farmer 18 person (11,7%), housewife 16 person (10,4%), teacher 14 person (9,1%) and student 4 person (2,6%).
And from the diagram below we can see the picture of respondent work field clearly:
(62)
Figure 4.2
Work Field of Respondent Diagram
At the first place private worker is dominant at the work field of respondent with 36,71% and the fewest percentage is a student with 2,60%.
5. Income
Based on the research data, this research defined data of income into some categories as shown in the table:
Table 4.5
Respondent Income Data
Frequency Percent Valid percent
Cumulati ve percent
<1.000.000 60 39,0 39,0 39,0
1.000.000 – 5.000.000 87 56,5 56,5 95,5
5.000.000 – 10.000.000 7 4,5 4,5 100,0
154 100,0 100,0
From the total respondent in this research 60 person is categorized in low income people with only receive under one million rupiah, 87 person in
Private Worker,
36,71%
Village Officer, 30,52% Farmer ,
11,69% Housewife ,
10,39% Teacher,
9,09%
Student, 2,60%
(63)
middle income with one until five million rupiah and 7 person categorized as a high income people.
Figure 4.4 Respondent Income
The low income categories is below one million rupiah which is our respondent is 39,0% of them at this level of income after that those who have the middle income categories it is 56,5% or half of the respondent at the middle income categories with one until five million income each month and for the last who receive five until ten million each month and it is only 4,5% from the respondent.
<1.000.000, 39,00%
1.000.000 - 5.000.000, 56,60%
5.000.000 - 10.000.000,
(64)
6. Education
One of the variables in this research is education and here the result of respondent personal data.
Table 4.6
Respondent Education Data
Frequency Percent Valid percent Cumulative
Not Educated
3 1,9 1,9 1,9
Elementary School
25 16,2 16,2 18,2
Secondary School
28 18,2 18,2 36,4
High School 63 40,9 40,9 77,3
Diploma 3 1,9 1,9 79,2
S1 31 20,1 20,1 99,4
S2 1 0,6 0,6 100,0
Total 154 100,0 100,0
Source: Researcher Data
Based on the data above from the total of respondent 3 of them are not educated, 25 person only graduated from elementary school, 28 person graduated from secondary school, 63 person graduated from high school, diploma graduate 3 person, which is able to go to college for undergraduate 31 person and master degree graduate 1 person.
(1)
21-25
Ordinal Test
Case Processing Summary
N Marginal Percentage literac
y
0 12 7.8%
1 101 65.6%
2 41 26.6%
Valid 154 100.0%
Missing 0
Total 154
Item-Total Statistics
6.80 2.250 .914 . .778
6.80 2.250 .914 . .778
6.80 2.250 .914 . .778
6.60 3.000 .335 . 1.000
Q16 Q17 Q18 Q19
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Corrected Item-Tot al Correlation
Squared Mult iple Correlation
Cronbach's Alpha if Item
Delet ed
Reliabi lity Statistics
.637 .679 5
Cronbach's Alpha
Cronbach's Alpha Based
on St andardized
Items N of Items
Item-Total Statistics
10.52 2.177 .597 .776 .478
10.40 2.500 .160 .080 .745
10.32 2.977 .174 .069 .670
10.64 2.323 .607 .431 .490
10.60 2.333 .599 .802 .493
Q21 Q22 Q23 Q24 Q25
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Corrected Item-Tot al Correlation
Squared Mult iple Correlation
Cronbach's Alpha if Item
(2)
Model Fitting Information
Model -2 Log
Likelihood
Chi-Square df Sig. Intercept
Only 169.150
Final 148.638 20.512 4 .000
Link function: Logit.
Goodness-of-Fit
Chi-Square
df Sig. Pearson 120.754 122 .515 Devianc
e 117.048 122 .610
Link function: Logit.
Pseudo R-Square
Cox and
Snell .125
Nagelkerke .154 McFadden .080 Link function: Logit.
Parameter Estimates
Estimat e
Std. Error
Wald df Sig. 95% Confidence Interval Lower Bound
Upper Boun
d Threshol
d
[literacy =
0] -.805 .707 1.298 1 .255 -2.191 .580
[literacy =
1] 3.112 .763 16.653 1 .000 1.617 4.607
Location
income .782 .374 4.365 1 .037 .048 1.516 education .331 .161 4.239 1 .040 .016 .647 workfield -.148 .175 .710 1 .399 -.491 .196 relation .277 .206 1.805 1 .179 -.127 .682
(3)
Link function: Logit.
Test of Parallel Linesa
Model -2 Log
Likelihood
Chi-Square df Sig. Null
Hypothesis 148.638
General 145.091 3.547 4 .471
The null hypothesis states that the location parameters (slope coefficients) are the same across response categories.
(4)
Respondent List
No Name Age
1 Isa Mugino 38
2 Muroqib 30
3 H. Islah 51
4 Ferial Devany 39
5 Hidayat 38
6 Nur Dian Febrianti 28 7 Bayu Putranto 37
8 M. Yusuf 37
9 Septi 29
10 Dasmuki 32
11 Zayuk Yusnita 42 12 Wiwin Purwanti 38 13 Nur Khurofah 40
14 Yanuar L 38
15 M Darul 44
16 Chilwaddinis Z 16
17 Amiroh 45
18 Sugi 50
19 Subarokah 36 20 Nisaul Mufida 22
21 Dumyati 30
22 Umaroh 31
23 Derri Patmalisa 35 24 Mimin Azminah 29 25 Eko Widiyawati 30 26 Ida Mufidah 38
27 Ruswati 33
28 Etik Widoyati 32 29 Ristichaningsih 34
30 Junaedi 49
31 Wiri 47
32 Eko Nasurun 29 33 Amat Nyoto 36 34 Erni Risqiawati 31 35 Nur Ainul Ibtiyah 21
36 Turiyah 52
37 Tonariyah 50
38 Wastari 50
39 Sudibyo 45
40 Okto Arofah 40
41 Diyono 63
42 Muh. Yoni 36 43 Bambang Priyono 38
44 Kusniati 40
45 Sumyati 47
46 Ning Pujiati 61 47 Anjar Wiwid
Wijayanto
26 48 Hestiana Pujiati 26
49 Riana 28
50 Emi Noviani 26 51 Harman Bayu Aji 26
52 Kastiah 45
53 Taryono 30
54 Karman 35
55 Endang 36
56 Retno 32
57 Harti 45
58 Rini 27
59 Nani 26
60 Kendar 54
61 M. Nur Islam 39
62 Kusnin 52
63 Raadi 43
64 Sukarjo 53
65 Casdi 51
66 Waidi 48
67 Herlianah 52 68 Toto Risman
Suwaji
40 69 Kusni Mardiati 42
70 Ruswanto 47
71 Kunaenah 48
72 Kuswiarto 38
73 Roheni 44
74 Soja 41
75 Casdi 38
(5)
77 Ratini 43
78 Derum 36
79 Karimansah 30
80 Rahayu 43
81 Riswanta 34
82 Siti Mariani 45
83 Rozali 47
84 Sucipto 48
85 Subiyah 36
86 Trimo 41
87 Mustajirin 44 88 Siti Srinangsih 45
89 Iskandar 46
90 Ahmad Fauzan 30 91 Ika Muryati 34 92 Tri Adi Hartanto 46
93 Nur Azin 41
94 Kartono 52
95 Musdalifah 24
96 Daiyah 41
97 Nur Rizqiyah 21 98 Friska Fatikasari 19
99 Suyitno 48
100 Husni Tamrin 33 101 Yumaeroh 24
102 Kinayah 23
103 Nurudin 24
104 Musyarofah 29
105 Palali 50
106 Mufrodah 24 107 Titik Sulanti 28 108 Lisa Rahmasari 14 109 Yuli Kurniawati 14
110 Sulimah 54
111 Sopari 56
112 Lisnawati 24
113 Mukhlas 45
114 Maryati 34
115 Tri Setiowati 41 116 Ahmad Mahroji 39 117 Dudi Harjo 44
118 Hadi Purnomo 46
119 Naryo 60
120 Ajunis Setyo Nugroho
48 121 Irwan Kuncoro 29 122 Mahkroji 42
123 Mahmud 40
124 Abdul Syukur 47
125 Suwaryo 52
126 Eningsih 43
127 Suharyo 53
128 Turah Slamet 61 129 Suwintri 36 130 Wurtiningsih 62
131 Nadiroh 55
132 Tubi Hartoyo 62
133 Wiyatu 50
134 Suharjo 40
135 Makmur 39
136 Mujono 53
137 Sri Suwarni 55 138 Listina Nur
Triyulianti
54 139 Tarodiyah 55 140 Nurdiyanah 28
141 Dhaumi 61
142 Sartiyah 32
143 Purnomo 48
144 Dwi Ani Susiwi 34
145 Muharjo 37
146 Yuni Kurniasih 30 147 Muslimin 34
148 Diyono 53
149 Sabari 64
150 Heni 33
151 Suroji 36
152 Khuzairi 48 153 Ratna K. P 29 154 Mulya Nur Hikma 30
(6)