Strategies for Improving Financial Literacy as a Drive of the Circular Economy for Artisans in Industrial Centers

Abstract

Decision making in financial management by individuals and groups in running a business plays a very important role. This is because financial decision-making can provide an overview of the costs and benefits of product recycling practices. From a circular economy perspective, initial investments made in running a business can improve financial literacy through sustainable budgeting, calculating return on investment, and seeking green funding. This research aims to identify the strategies employed by artisans to enhance their financial management decision-making abilities within their circular economy practices. This study uses a qualitative method with a grounded theory approach. The research was conducted in industrial centers concentrated in East Java. Data analysis used open coding, axial coding, and selective coding. The results show that the artisans' understanding of financial literacy in industrial centers, as indicated by their financial knowledge, financial attitude, and financial behavior, is minimal. This can be seen from the information obtained during in-depth interviews, where their understanding was found to be superficial. Another finding regarding the production process, which reflects the artisans' circular economy practices in industrial centers, indicates that they no longer use the "take-make-dispose" principle. Instead, they are at the stage of extending product life by increasing product value using waste-based raw materials. Furthermore, the research on increasing financial literacy among artisans in industrial centers shows that it is being done through integrated training with product marketing, overseen by e-commerce platforms. It is hoped that this research can serve as a reference for future studies related to the welfare of artisans in industrial centers.