Adoption of Digital Technology and Financial Knowledge: Strategies for Achieving Sustainable Performance of MSMEs

Peni Nugraheni (), Emile Satia Darma and Rifqi Muhammad
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Peni Nugraheni: Accounting Department, Universitas Muhammadiyah Yogyakarta, Yogyakarta 55183, Indonesia
Emile Satia Darma: Accounting Department, Universitas Muhammadiyah Yogyakarta, Yogyakarta 55183, Indonesia
Rifqi Muhammad: Accounting Department, Universitas Islam Indonesia, Yogyakarta 55584, Indonesia

JRFM, 2025, vol. 18, issue 11, 1-15

Abstract: Micro, small and medium enterprises (MSMEs) contribute significantly to Indonesia’s economic growth. In an increasingly digitalised era, MSMEs face challenges and opportunities that affect their performance. Technology adoption will have an impact on operational efficiency and ease of transactions, providing added value for consumers. Meanwhile, good financial management depends on the level of financial literacy and inclusion of MSME players. This study aims to examine the factors that influence the sustainable performance of MSMEs from the aspects of technology adoption and financial knowledge. The independent variables include automation, digital payments, financial inclusion and financial literacy, and the dependent variable is MSME performance. This study uses primary data in the form of questionnaires, and data processing uses SEM-PLS. Statistical test results show that the variables of business automation and financial literacy have a positive effect, while the variables of digital payments and financial inclusion have no effect. The results of the study show that financial literacy is an important key to MSME performance and the importance of business automation that affects efficiency through technology. The results of this study are expected to provide useful recommendations for MSME actors and policymakers in formulating strategies to improve the competitiveness of MSMEs.

Keywords: digital technology; financial literacy; financial inclusion; MSME; performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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