LOCUS OF CONTROL DALAM MEMEDIASI PENGARUH LITERASI KEUANGAN DAN PENDAPATAN TERHADAP KEPUTUSAN INVESTASI PELAKU USAHA KECIL MENENGAH (UKM) KOTA MALANG

This study aims to analyze how locus of control mediates the influence of financial literacy and income on the investment decisions of Small and Medium Enterprises (SMEs) in Malang City. The city was chosen due to its significant SME growth, particularly in the fashion sector. The study employed a quantitative approach with a descriptive method, and data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). A total of 120 fashion-sector SME owners were selected using proportional random sampling. The results indicate that financial literacy and income have a positive influence on locus of control, and that locus of control significantly affects investment decisions. Furthermore, locus of control is proven to mediate the relationship between financial literacy and income with investment decisions. These findings highlight the importance of enhancing financial literacy and strengthening internal locus of control to support more optimal investment decision-making among SME owners. Therefore, the development of financial education programs and self-control training becomes crucial in empowering SMEs.