The Effect of Financial Knowledge, Financial Literacy, and Financial Technology on MSME Performance

Yusbardini Yusbardini; Muhamad Safii; Prof. Dr. Muhardi, S.E., M.M.; Prof. Dr. Tasya Aspiranti, S.E., M.M

doi:10.47814/ijssrr.v9i5.3420

Yusbardini Yusbardini Faculty Economic and Business, Universitas Tarumanagara, Jakarta, Fakulatas Ekonomi dan Bisnis Universitas Islam ,Bandung, Indonesia
Muhamad Safii Faculty Economic and Business, University Islam Bandung,, Indonesia
Prof. Dr. Muhardi, S.E., M.M. Faculty Economic and Business, University Islam Bandung,, Indonesia
Prof. Dr. Tasya Aspiranti, S.E., M.M Faculty Economic and Business, University Pamulang, Tangerang, Indonesia

DOI: https://doi.org/10.47814/ijssrr.v9i5.3420

Keywords: Financial Knowledge; Financial Literacy; Financial Technology; MSME Performance; SEM-PLS

Abstract

This study aims to analyze the influence of financial knowledge, financial literacy, and financial technology on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Jakarta. MSMEs play a crucial role in Indonesia’s economic growth; however, they still face various challenges related to financial management, low levels of financial literacy, and limited utilization of digital financial technology. In addition, previous studies examining the influence of financial knowledge, financial literacy, and financial technology on MSME performance have produced inconsistent findings. Therefore, this study integrates these three variables into a single research model to provide a more comprehensive understanding of the factors influencing MSME performance. This study employed a quantitative approach using a survey method. Primary data were collected through questionnaires distributed to 250 culinary-sector MSME owners in Jakarta who actively use financial technology services. The sampling technique used was purposive sampling. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with the assistance of SmartPLS 4.0 software. The results indicate that financial knowledge, financial literacy, and financial technology have a positive and significant effect on MSME performance. Financial technology was found to be the most dominant variable influencing MSME performance, followed by financial literacy and financial knowledge. The R-Square value of 0.288 indicates that the three independent variables explain 71.2% of the variance in MSME performance. This study contributes theoretically by developing an integrated model of financial capability and digital technology adoption within the Resource-Based View (RBV) perspective. Practically, the findings provide implications for MSME owners and policymakers in enhancing financial literacy and the utilization of financial technology to improve MSME performance and competitiveness.

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