The roles of self efficacy and sharia financial literacy to SMES performance: business model as intermediate variable

Background: SMEs have made a major contribution to the national economy, but Pandemic covid-19 made the decline of SMEs which directly affected the economy in Indonesia. The purpose of this research focus to explore the innovation of business models the novelty of the research model in the business model of innovation research models is to include the variable self-efficacy. This research emphasizes self-efficacy and Islamic financial literacy as independent variables, business model innovation as an intermediate model and business performance variables as dependent variables, with the focus of research on SMEs. Methods: This quantitative study uses partial least square structural equation modeling (PLS-SEM) and a questionnaire survey to analyze the 40 Street Vendors which is categorized as SMEs around Unisba. In the initial stages, the Questionnaire was tested with the Validity and Reliability test. In the PLS-SEM analysis, the validity of the indicators / items forming latent variables is based on the significance value of t arithmetic obtained from the loading factor value divided by the standard error. After being collected, the data is then processed and analyzed. The analytical method used in this study is the simultaneous equation model, namely Partial Least Square (PLS). The statistical tool used to test the hypothesis is Smart PLS. Results: The results showed that self-efficacy and Islamic financial literacy through business model innovation, had a positive effect on SMEs business performance simultaneously or partially.   Conclusion: So that by having good self-efficacy and good Islamic financial literacy plus an appropriate business innovation model, it will improve the business performance of SMEs.