<![CDATA[This study aims to analyze the influence of business owner leadership on employee productivity, either directly or through financial literacy as a mediating variable, in Micro, Small, and Medium Enterprises (MSMEs) in Medan City. The study used an associative quantitative approach with a survey method of 175 MSME employees in various sectors (culinary, fashion, handicrafts, and retail trade) who were selected using purposive sampling techniques. Data were collected through a 5-point Likert scale questionnaire and analyzed using the Structural Equation Modeling approach based on Partial Least Square (SEM-PLS) with the help of SmartPLS 4. The results of the study showed that the leadership of business owners had a positive and significant effect on financial literacy (β = 0.412, p < 0.001), financial literacy had a positive and significant effect on employee productivity (β = 0.358, p < 0.001), and business owner leadership had a positive and significant effect on employee productivity directly (β = 0.276, p < 0.01). The results of the mediation test showed that financial literacy partially mediated the influence of business owner leadership on employee productivity (indirect effect = 0.148, p < 0.01; VAF = 34.9%). This finding confirms that increasing the leadership capabilities of business owners needs to be accompanied by strengthening employee financial literacy so that the productivity of MSMEs can be increased sustainably]]>
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