Unlocking MSME Performance: The Interplay of Financial Literacy, Financial Inclusion, and Financial Technology Lending with Venture Capital Mediation

Hasanudin Hasanudin* -  Faculty of Economics and Business, Universitas Nasional Jakarta, Indonesia
Fahrudin Panigfat -  Faculty of Economics and Business, Universitas Nasional Jakarta, Indonesia

Studying the dynamic relationship among financial literacy, financial inclusion, fintech lending, and business capital mediation in the context of MSME performance is intriguing due to the intricate interconnections between these variables. This paper sought to assess the effect of financial literacy, financial inclusion, and fintech lending on the MSME performance in North Maluku Province, Sula Islands Regency, Sanana District, Indonesia. This research employed business capital as the mediating variable. Using a structural equation modelling, this study indicates that financial literacy, financial inclusion, and fintech lending have a positive and significant effect on the performance of micro, small, and medium enterprises. The presence of business capital can serve as a mediating factor in how financial literacy, financial inclusion, and fintech lending affect the performance of micro, small, and medium enterprises.

Keywords : MSME Performance; Financial Literacy; Financial Inclusion; Fintech Lending; Business Capital

  1. Agyapong, D., & Attram, A. B. (2019). Effect of owner-manager’s financial literacy on the performance of SMEs in the Cape Coast Metropolis in Ghana. Journal of Global Entrepreneurship Research, 9(1), 67. https://doi.org/10.1186/s40497-019-0191-1
  2. Alamsyah, A., Rahmah, W., & Irawan, H. (2015). Sentiment analysis based on appraisal theory for marketing intelligence in Indonesia’s mobile phone market. Journal of Theoretical and Applied Information Technology, 82(2), 335.
  3. Andriani, L., & Sulistyowati, E. (2021). Pengaruh Leverage, Sales Growth, Dan Intellectual Capital Terhadap Financial Distress. Seminar Nasional Akuntansi Dan Call for Paper (SENAPAN), 1(1), 542–550.
  4. Anthanasius Fomum, T., & Opperman, P. (2023). Financial inclusion and performance of MSMEs in Eswatini. International Journal of Social Economics. https://doi.org/10.1108/IJSE-10-2020-0689
  5. Brigham, E. F., & Houston, J. F. (2021). Fundamentals of financial management: Concise. Cengage Learning.
  6. Buchdadi, A. D., Ulupui, I. G. K. A., Dalimunthe, S., Pamungkas, B. G., & Fauziyyah, Y. (2019). Board of director meeting and firm performance. Academy of Accounting and Financial Studies Journal, 23(2), 1–7.
  7. Efan, K., Basana, S. R., & Ottemoesoe, R. S. D. (2021). The effect of financial inclusion on micro, small, and medium enterprise performance using fintech as a moderating variable. In Contemporary Research on Business and Management (pp. 153-156). CRC Press. https://doi.org/10.1201/9781003196013-38
  8. Fadlurrohim, I., Husein, A., Yulia, L., Wibowo, H., & Raharjo, S. T. (2019). Memahami perkembangan anak generasi alfa di era industri 4.0. Focus: Jurnal Pekerjaan Sosial, 2(2), 178–186.
  9. Hair Jr, J. F., & Sarstedt, M. (2019). Factors versus composites: Guidelines for choosing the right structural equation modeling method. Project Management Journal, 50(6), 619–624.
  10. Hasanudin. (2023). The role of social media in influencing investment decisions in the millennial generation. Jurnal Multidisiplin Sahombu, 3(1), 124-130. https://doi.org/10.58471/jms.v3i01.1967
  11. Hilmawati, M. R. N., & Kusumaningtias, R. (2021). Inklusi Keuangan Dan Literasi Keuangan Terhadap Kinerja Dan Keberlangsungan Sektor Usaha Mikro Kecil Menengah. Nominal: Barometer Riset Akuntansi Dan Manajemen, 10(1), 135–152.
  12. Joni, J., & Lina, L. (2010). Faktor-faktor yang mempengaruhi struktur modal. Jurnal Bisnis Dan Akuntansi, 12(2), 82–97.
  13. Kryscynski, D., Coff, R., & Campbell, B. (2021). Charting a path between firm‐specific incentives and human capital‐based competitive advantage. Strategic Management Journal, 42(2), 386–412.
  14. Kulathunga, K. M. M. C. B., Ye, J., Sharma, S., & Weerathunga, P. R. (2020). How does technological and financial literacy influence SME performance: Mediating role of ERM practices. Information, 11(6), 297. https://doi.org/10.3390/info11060297
  15. Lontchi, C. B., Yang, B., & Shuaib, K. M. (2023). Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Effect of Financial Literacy. Sustainability, 15(3), 2171. https://doi.org/10.3390/su15032171
  16. Lu, W., Luo, Y., Chang, G., & Sun, X. (2011). Synthesis of functional SiO2-coated graphene oxide nanosheets decorated with Ag nanoparticles for H2O2 and glucose detection. Biosensors and Bioelectronics, 26(12), 4791–4797.
  17. Mardiana, R. (2020). Pengaruh literasi keuangan syariah pada mahasiswa perbankan syariah UIN Mataram angkatan 2016 terhadap keputusan menjadi nasabah pada bank syariah (Doctoral dissertation, UIN Mataram).
  18. Moch, R., Prihatni, R., & Buchdadi, A. D. (2019). The effect of liquidity, profitability and solvability to the financial distress of manucatured companies listed on the Indonesia stock exchange (IDX) period of year 2015-2017. Academy of Accounting and Financial Studies Journal, 23(6), 1–16.
  19. Mujiatun, S., Trianto, B., Cahyono, E. F., & Rahmayati. (2023). The Impact of Marketing Communication and Islamic Financial Literacy on Islamic Financial Inclusion and MSMEs Performance: Evidence from Halal Tourism in Indonesia. Sustainability, 15(13), 9868. https://doi.org/10.3390/su15139868
  20. Mutegi, H. K., Njeru, P. W., & Ongesa, N. T. (2015). Financial literacy and its impact on loan repayment by small and medium entrepreneurs.
  21. Nugraha, D. P., Setiawan, B., Nathan, R. J., & Fekete-Farkas, M. (2022). FinTech adoption drivers for innovation for SMEs in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(4), 208. https://doi.org/10.3390/joitmc8040208
  22. OECD (2014). PISA 2012 technical background, in. OECD (Ed.), PISA 2012 Results: Students and. Money: Financial Literacy Skills for the 21st. Century, 6, 23-145. https://www.oecd.org/pisa/keyfindings/PISA-2012-results-volume-vi.pdf
  23. Oshora, B., Desalegn, G., Gorgenyi-Hegyes, E., Fekete-Farkas, M., & Zeman, Z. (2021). Determinants of financial inclusion in small and medium enterprises: Evidence from Ethiopia. Journal of Risk and Financial Management, 14(7), 286. https://doi.org/10.3390/jrfm14070286
  24. Rahmi, M. (2018). Fintech for financial inclusion: Indonesia case. 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018) (pp. 1–3). Indonesia: Atlantis Press.
  25. Thathsarani, U. S., & Jianguo, W. (2022). Do Digital Finance and the Technology Acceptance Model Strengthen Financial Inclusion and SME Performance?. Information, 13(8), 390. https://doi.org/10.3390/info13080390
  26. Widyastuti, M., Ferdinand, D. Y. Y., & Hermanto, Y. B. (2023). Strengthening Formal Credit Access and Performance through Financial Literacy and Credit Terms in Micro, Small and Medium Businesses. Journal of Risk and Financial Management, 16(1), 52. https://doi.org/10.3390/jrfm16010052
  27. Wirdiyanti, R., Yusgiantoro, I., Sugiarto, A., Harjanti, A. D., Mambea, I. Y., Soekarno, S., & Damayanti, S. M. (2022). How does e-commerce adoption impact micro, small, and medium enterprises’ performance and financial inclusion? Evidence from Indonesia. Electronic Commerce Research, 1-31. https://doi.org/10.1007/s10660-022-09547-7
  28. Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in SMEs? A developing country perspective. Sustainability, 11(10), 2990. https://doi.org/10.3390/su11102990

Shirkah: Journal of Economics and Business
Published by Faculty of Islamic Economics and Business (FEBI)
Institut Agama Islam Negeri Surakarta, Indonesia
Jln. Pandawa No. 1, Pucangan, Kartasura, Central Java, Indonesia, 57168
Phone: +62271-781516
Website: http://shirkah.or.id/new-ojs/index.php/home
Email: shirkahiainsurakarta@gmail.com

P-ISSN :2503-4235 | E-ISSN : 2503-4243

This ejournal system and it's contents licensed under
a Creative Commons Attribution-NonCommercial 4.0 International License