The Role of Financial Literacy, FinTech, and Digital Accounting in Enhancing MSME Performance in the Digital Economy
Keywords:
SMEs, Financial Literacy, FinTech, Digital Accounting, Digital EconomyAbstract
Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in the Indonesian economy, contributing significantly to employment and national economic growth. In the digital economy era, MSMEs face both challenges and opportunities. Challenges include efficient financial management, access to digital financial services, and adaptation to technology-based record-keeping. This study aims to explore the vital role of financial literacy, financial technology (FinTech), and digital accounting in improving the performance of MSMEs in Indonesia. This study employs a case study approach to analyse SMEs’ experiences in managing finances, adopting FinTech, and implementing digital accounting. Data collection methods include in-depth interviews with SME owners, direct observation of business activities, and documentation of financial records. The research findings are expected to provide a comprehensive overview of how financial literacy, FinTech, and digital accounting interact to improve SME performance. The contributions of this research include an in-depth understanding of best practices in SME financial management, policy recommendations to support SME digitalisation, and practical implications for business owners, the government, financial institutions, and technology developers. Key findings indicate that improved financial literacy strengthens the managerial capacity of SMEs, the use of FinTech facilitates transactions and access to financing, while digital accounting enhances the quality of financial information
References
Ahmed, S., & Sur, S. (2021). Change in the usage pattern of digital banking services by Indian rural MSMEs during demonetization and Covid-19 pandemic-related restrictions. *Vilakshan – XIMB Journal of Management*. https://doi.org/10.1108/xjm-09-2020-0138
Akpuokwe, C. U., Chikwe, C. F., & Eneh, N. E. (2024). Leveraging technology and financial literacy for women’s empowerment in SMEs: A conceptual framework for sustainable development. *Global Journal of Engineering and Technology Advances, 18*(3), 0041. https://doi.org/10.30574/gjeta.2024.18.3.0041
Al–Shami, S. A., Damayanti, R., Adil, H., Farhi, F., & Al Mamun, A. (2024). Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia. *Heliyon*. https://doi.org/10.1016/j.heliyon.2024.e34902
Aminullah, E., Fizzanty, T., Nawawi, N., Suryanto, J., Pranata, N., Maulana, I., Ariyani, L., Wicaksono, A., Suardi, I., Aziz, N. L. L., & Budiatri, A. P. (2022). Interactive Components of Digital MSMEs Ecosystem for an Inclusive Digital Economy in Indonesia. *Journal of the Knowledge Economy*. https://doi.org/10.1007/s13132-022-01086-8
Angeles, I. T. (2022). The Moderating Effect of Digital and Financial Literacy on the Digital Financial Services and Financial Behaviour of MSMEs. *Review of Economics and Finance*, *20*, 57. https://doi.org/10.55365/1923.x2022.20.57
Ashta, A. (2023). How Can Fintech Companies Get Involved in the Environment? *Sustainability, 15*(13), 10675. https://doi.org/10.3390/su151310675
Behera, C. K., & Kumra, R. (2023). Two decades of mobile payment research: A systematic review using the TCCM approach. *International Journal of Consumer Studies, 47*(3), 1162–1205. https://doi.org/10.1111/ijcs.13003
Ben Naceur, S., Beck, T., Belhaj, M., & Barajas, A. (2020). Financial Inclusion: What Have We Learned So Far? What Do We Have to Learn? *IMF Working Paper*. https://doi.org/10.5089/9781513553009.001
Biallas, M. O., & O'Neill, F. (2020). *Artificial Intelligence Innovation in Financial Services*. International Finance Corporation. https://doi.org/10.1596/34305
Buteau, S. (2021). Roadmap for digital technology to foster India’s MSME ecosystem—opportunities and challenges. *CSI Transactions on ICT*. https://doi.org/10.1007/s40012-021-00345-4
Charfeddine, L., Umlai, M. I., & El-Masri, M. (2024). Impact of financial literacy, perceived access to finance, ICT use, and digitisation on credit constraints: evidence from Qatari MSME importers. *Financial Innovation*. https://doi.org/10.1186/s40854-023-00557-4
Delgado-Sánchez, E., Calderón, R., & Herrera, F. (2025). Artificial Intelligence Adoption in SMEs: Survey Based on TOE–DOI Framework, Primary Methodology and Challenges. *Applied Sciences, 15*(12), 6465. https://doi.org/10.3390/app15126465
Egbo, O. P., Ezeaku, H. C., Igwemeka, E., & Okeke, O. M. (2020). Financial literacy and access: revisiting the bridges and barriers to women entrepreneurship in Nigeria. *Revista Amazonia Investiga, 9*(29), 48–56. https://doi.org/10.34069/ai/2020.29.05.48
Kilay, A. L., Simamora, B. H., & Putra, D. P. (2022). The Influence of E-Payment and E-Commerce Services on Supply Chain Performance: Implications of Open Innovation and Solutions for the Digitalisation of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. *Journal of Open Innovation Technology Market and Complexity, 8*(3), 119. https://doi.org/10.3390/joitmc8030119
Lestari, E. D., Abd Hamid, N., Shamsuddin, R., Kurniasari, F., & Yaacob, Z. (2024). Investigating the factors of SMEs’ business resilience in the post-pandemic crisis of COVID-19 with technology adoption as a quasi-moderator: a multigroup analysis of Indonesian and Malaysian SMEs. *Cogent Business & Management, 11*(1), 2301135. https://doi.org/10.1080/23311975.2023.2301135
Lontchi, C. B., Yang, B., & Su, Y. (2022). The Mediating Effect of Financial Literacy and the Moderating Role of Social Capital in the Relationship between Financial Inclusion and Sustainable Development in Cameroon. *Sustainability, 14*(22), 15093. https://doi.org/10.3390/su142215093
Malik, K., Meki, M., Morduch, J., Ogden, T., Quinn, S., & Said, F. (2020). COVID-19 and the future of microfinance: evidence and insights from Pakistan. *Oxford Review of Economic Policy, 36*(Supplement_1), S253–S272. https://doi.org/10.1093/oxrep/graa014
Menne, F., Mardjuni, S., Yusuf, M., Ruslan, M., Arifuddin, A., & Iskandar, I. (2023). Sharia Economy, Islamic Financial Performance and Factors That Influence It—Evidence from Indonesia. *Economies, 11*(4), 111. https://doi.org/10.3390/economies11040111
OECD. (2023). *OECD Financing SMEs and Entrepreneurs Scoreboard: 2023 Highlights*. OECD SME and entrepreneurship papers. https://doi.org/10.1787/a8d13e55-en
Osman, I. (2023). Advancing Ethical and Sustainable Economy: Islamic Finance Solutions for Environmental, Social, & Economic Challenges in the Digital Age. *International Journal of Membrane Science and Technology, 10*(5), 2515–2524. https://doi.org/10.15379/ijmst.v10i5.2515.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Sev Rahmiyanti, Eko Suyono, Yanuar E. Restianto
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
