The Significance of Cultural Capital in Enhancing the Efficiency and Long-Term Viability of Village Credit Institutions in Bali

Abstract

The objective of this study was to examine the impact of cultural capital on financial performance, marketing performance, and financial sustainability. Additionally, it investigated the influence of financial performance and marketing performance on financial sustainability. The study focused on Village Credit Institutions in Bali, specifically those categorised as healthy or fairly healthy, totalling 1,145 units. Using the Slovin formula, a sample size of 100 units was determined. Stratified proportional random sampling, based on the number of units in each district/city in Bali, was employed to collect the sample. The analysis technique used was the Smart-PLS. The findings indicated that cultural capital had a favourable impact on financial performance, marketing performance, and financial sustainability. Moreover, both financial performance and marketing performance positively influenced financial sustainability. Additionally, financial performance mediated the influence of cultural capital on financial sustainability. The scientific novelty of this study lies in its comprehensive analysis of the interplay between cultural capital and various performance metrics within Village Credit Institutions, an area that has been underexplored in existing literature. The practical significance is evident in its implications for policymakers and managers within these institutions, suggesting that the enhancement of the cultural capital can lead to improved financial and marketing outcomes, ultimately supporting long-term financial sustainability. This study provided valuable insights for strategic planning and resource allocation in similar financial institutions globally. The findings underscored the critical role of cultural capital in driving institutional performance and sustainability. This combination of theoretical exploration and methodological rigor enhanced the scholarly contribution of the study, offering insights that can inform both academic research and practical strategies for sustainable development in microfinance institutions.