THE EFFECT OF FINTECH ADOPTION AND FINANCIAL LITERACY ON MSME SUSTAINABILITY PERFORMANCE: MEDIATED BY ACCESS TO FINANCE IN INDONESIA

• Main Author: Faza Khalisha, Mazida
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84027
• Institution: Institut Teknologi Bandung

The Indonesian government already recognizes micro, small, and medium enterprises (MSME's) as crucial elements in achieving the 2045 goal of becoming a high-income country through sustainable development, encompassing environmental, economic, and social aspects. However, previous research in Indonesia has not adequately identified how financial technology adoption and financial literacy have an effect on MSME sustainability performance, nor has it explored how access to finance can mediate the effect of financial technology adoption and financial literacy on MSME sustainability performance. The research aims to examine the effects of financial technology adoption, financial literacy, and access to finance on MSME sustainability in terms of environment, economic, and social performance, as well as the significance of the mediation variable of access to finance in addressing the gap. The research employs a quantitative approach, using an online survey questionnaire with 279 Indonesian MSME respondents. This research measured the respondents' responses to each item or statement using a seven-point Likert scale. Then, the effect on the variables is analyzed using partial least squares structural equation modeling. The research reveals that financial technology adoption and financial literacy have a significant effect on access to finance. Further, financial technology adoption and access to finance have a significant effect on MSME sustainability performance, particularly in relation to environmental, economic, and social aspects. However, financial literacy has an insignificant effect on three aspects of MSME sustainability performance. On top of that, the findings indicate that access to finance mediates the effect of financial technology adoption and financial literacy on MSME sustainability performance in environmental, economic, and social aspects. Therefore, the research findings may be helpful in raising awareness among regulatory authorities and MSME about the importance of financial technology adoption, financial literacy, and access to finance in achieving MSME sustainability performance.