A study on the influence of Islamic financial literacy in managing cash and debt among millennial in Indonesia

Indonesia is currently experiencing a demographic dividend, where the total population of productive age is higher than the total of un-productive age. The most numerous groups in this productive age group are the millennials aged 20 to 40 years. This generation is known to have significant differences compared to previous generations, which are the ability to use advanced technology and have more consumptive behavior. So, it is required for them to have a sufficient knowledge of financial literacy in order to manage their financial wisely, especially in Islamic finance education. Aceh is one of the regions in Indonesia that will implement special regulations for financial institutions, to convert its conventional finance into fully Islamic finance products and operations. Therefore, this study aims to measure the level of Islamic financial literacy of millennials in Aceh, Indonesia and to investigate its effects on managing cash and debt. The influence of demographic factors is also examined in this study as independent variables; namely gender, age, educational background and income level. By using multiple linear regression analysis, the result shows that the level of Islamic financial literacy, educational background, and income level significantly affect cash and debt management. In addition, the results of the study shown that millennials in Aceh have a good level of Islamic financial literacy by reaching 71%. The results of this study can be references for the Islamic financial industry in Aceh and for its government. The millennial seems to be ready for the new provisions that will be implemented in relation to the Islamic financial industry in Aceh