ADOPTION OF I-FINTECH IN PROMOTING SUSTAINABLE ENTREPRENEURSHIP: EVIDENCE FROM SMES IN SELANGOR, MALAYSIA

Abstract

i-FinTech is devoted to companies or entrepreneurs that combine financial services with recent, advanced technologies that comply with Shariah. However, SME’s usually have limited resources in finance, skilled entrepreneurs, in-house knowledge or management. This study aims to identify whether financial literacy elements influence the adoption of i-FinTech and subsequently lead to sustainable entrepreneurship among Bumiputera SMEs in Selangor, Malaysia. A quantitative technique was employed through the use of 88 surveys distributed using convenience sampling method to Bumiputera SMEs’ entrepreneurs. The data is analysed using mediation analysis through SPSS Process Macro Model 4. The results shows that i-Fintech adoption is positively and significantly influence by financial literacy and digital financial literacy. Contrary, financial management behavior is negatively influence i-Fintech adoption. Further, this study reveals that i-Fintech adoption has a complementary mediation role in the association between financial literacy and digital financial literacy towards sustainable entrepreneurship. This result indicates that Bumiputera entrepreneurs who possess both financial literacy and digital financial literacy are more likely to adopt i-FinTech, and finally end up contributing significantly to sustainable entrepreneurship. The findings should help entrepreneurs, i-Fintech service providers, researchers and regulators to have better understanding of the dynamics between the potential of i-FinTech and sustainable entrepreneurship. It is suggested that SMEs to continue to take advantage of i-fintech in carrying out their business activities to avoid the impact of business downturn and the smooth running of their business.