Roles of Financial Literacy and Digital Financial Literacy in Enhancing MSME Financial Well-Being

Birgitta Dian Saraswati, Daniel Daud Kameo, Sotya Fevriera, Andrian Dolfriandra Huruta () and Thomas Andra Martian

The European Journal of Applied Economics, 2026, vol. 23, issue 1, 146-170

Abstract: This study examines the effects of financial literacy and digital financial literacy on the financial well-being of micro and small enterprise (MSE) owners. Primary data were collected through surveys administered to MSE owners in Bantul Regency, Special Region of Yogyakarta Province. This research generated a sample through various sampling selection techniques (cluster, purposive, and accidental sampling). A total of 168 respondents were used for data analysis employing Partial Least Squares-Structural Equation Modeling (PLS-SEM) with SmartPLS software. The findings reveal that financial knowledge affects financial behaviors and attitudes, while digital financial knowledge affects digital financial behaviors and digital financial attitudes, with digital financial attitudes further impacting digital financial behaviors. In addition, this study also documents that the financial behaviors, digital financial knowledge, and digital financial behavior dimensions affect financial well-being. Micro and small enterprises will arguably make sound judgments, manage financial matters more effectively, and develop sustainable businesses if they have a better understanding of financial management and digital technology.

Keywords: financial literacy; digital financial literacy; financial well-being; micro and small enterprises; PLS-SEM (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:sng:ejae01:247

DOI: 10.5937/EJAE23-61816

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