Financial Literacy and Impact on Welfare of Chilli Farmers in East Java Province Indonesia

This study provides empirical evidence on the factors that affect the level of financial literacy and financial literacy impact of the adoption credit and the welfare of farmers viewed from the income they generated. Two districts were chosen as a test site such as Malang and Kediri. A total of 300 farmers used as samples were analyzed by logit regression analysis and propensity score matching (PSM). The results showed participation in farmers' group is the most influential variable positive and significant impact on the level of financial literacy education followed and the number of family members. On the other hand, the life of a significant Negative effect on the level of financial literacy. Furthermore, financial literacy has a significant impact on the income of farmers, where farmers with high levels of financial literacy have higher incomes than farmers with low levels of financial literacy. This implies that financial literacy is indispensable to carry out agricultural activities.