From Remittances to Enterprise: The Effect of Needs-Based Financial Literacy Training on Financial Behaviour and Business Initiation among Indonesian Return Migrants

Abstract

Return migrants frequently come home with savings, discipline, and global work experience, yet many fail to convert remittances into sustainable enterprises. This study examines whether a needs-based financial literacy programme improves financial knowledge, financial behaviour, business planning, and business initiation among Indonesian return migrants. The study employed a one-group pretest–posttest pre-experimental design embedded in a community engagement programme delivered by the Migrant Resource Center of Universitas Muhammadiyah Purwokerto in partnership with PT Emma Media Nusantara in Banyumas, Gombong, and Kebumen, Central Java. Training content was designed from a profiling survey and participatory focus group discussions. Hypotheses were tested with paired-sample tests, normalised gain analysis, and one-sided binomial tests. The training significantly improved financial literacy across all domains, and most participants subsequently separated business and household finances, kept routine financial records, planned remittance use, and produced business plans. However, the training did not lead most mentored participants to start or expand a business, and access to capital emerged as the decisive constraint. The study extends human capital theory by locating the point at which investment in financial knowledge ceases to translate into economic output without complementary financial capital. It also offers a replicable university–industry delivery model for post-migration reintegration.