Financial literacy, financial technology, and financial inclusion: Effect on the financial management of MSME

Abstract

This research analyzes the effect of financial literacy, FinTech, and financial inclusion on the financial management of MSMEs in Indonesia, using the Resource-Based View theory and the Technology Acceptance Model. This research uses quantitative methods with a population of 27,162 MSMEs in Badung Regency. The sampling method uses probability sampling with a simple random sampling technique, with a sample of 395 MSMEs. Data was collected through questionnaires in hardcopy form and Google Form. Hypothesis testing was carried out using the Structural Equation Model (SEM) approach based on Partial Least Square (PLS) version 4. The research results show that financial literacy, financial technology and financial inclusion have an influence on financial management. The strongest variable that has an influence on financial management is the financial technology variable. This shows that technology adoption can increase effectiveness in financial management. It was found that the higher the financial literacy and adoption of financial technology, as well as financial inclusion, the wiser MSMEs in Badung manage their finances. They are better prepared to face challenges, increase transparency, and gain access to financing. This research recommends using a wider sample, for example using samples from all districts/cities in the province.