DIGITAL AND FINANCIAL LITERACY DRIVING MICRO FINANCE ACCESS: RELIGIOSITY AS CATALYST FOR SME DEVELOPMENT
DOI:
https://doi.org/10.22437/jiituj.v9i4.47587Keywords:
Digital Platform, Financial Literacy, Formal Micro Financing, Indonesia, SME DevelopmentAbstract
Microfinancing has contributed to the development of micro, small, and medium enterprises (MSMEs), market expansion, and reduced economic inequality in developing countries. Microfinancing enhances MSMEs' resilience to economic and environmental changes by facilitating the adoption of sustainable technology. Gaps in financial literacy, particularly in financial management, impede MSMEs access to credit. Limited digital literacy and poor Internet access hinder MSMEs engagement in the digital economy. This study analyzes how financial literacy and digital platform usage influence microfinancing and MSMEs development, with religiosity as a moderating factor. Using a quantitative methodology with structural equation modeling and moderating regression analysis, the research sampled 200 MSMEs that obtained loans from formal microfinance institutions, specifically conventional People's Economic Banks (BPR) and Sharia People's Economic Banks (BPRS) in Western Indonesia. The results demonstrate that financial literacy and digital platforms facilitate access to microfinance and MSMEs growth, aligning with the theories of Diffusion of Innovation, Technology Acceptance Model, and Resource-Based View. The ineffectiveness of microfinance as a mediating variable reveals a disparity between financing access and productive fund utilization. The negative moderation of religiosity on the effect of financial literacy on microfinancing shows the influence of religious values on MSMEs' financial perceptions. These results indicate the need to integrate financial literacy, digital mentoring, and religious-value-based strategies into MSME empowerment programs. Financing institutions must modify their interventions to ensure that financing promotes inclusive MSME growth. This study uniquely examines religiosity moderation and microfinancing's ineffectiveness as mediating factors in MSME digitalization in developing countries.
Downloads
References
Affandi, Y., Ridhwan, M. M., Trinugroho, I., & Hermawan Adiwibowo, D. (2024). Digital adoption, business performance, and financial literacy in ultra-micro, micro, and small enterprises in Indonesia. Research in International Business and Finance, 70, 102376. https://doi.org/https://doi.org/10.1016/j.ribaf.2024.102376
Agustin, A. D., & Ibrahim, M. H. (2024). From exclusion to inclusion: The role of financial technology in enhancing sustainability performance in Indonesian Muslim MSMEs. Journal of Finance, Economics and Business, 3(2), 122–142. https://doi.org/10.59827/jfeb.v3i2.147
Alharbi, R. K., Yahya, S., & Ramadani, V. (2022). Financial literacy, access to finance, SMEs performance and Islamic religiosity: evidence from Saudi Arabia. International Journal of Entrepreneurship and Small Business, 46(2), 259–285. https://doi.org/10.1504/IJESB.2022.124456
Al-shami, S. A., Damayanti, R., Adil, H., Farhi, F., & Al mamun, A. (2024). Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia. Heliyon, 10(15), e34902. https://doi.org/10.1016/j.heliyon.2024.e34902
Apsary, N., Wati, L. N., & Mulyanti, R. Y. (2025). Bridging networks and skills: The moderating role of capital access in enhancing Post-Migrant SMEs performance. International Journal of Entrepreneurship, Business and Creative Economy, 5(2), 111–128. https://doi.org/10.31098/ijebce.v5i2.3488
Archer, L., Sharma, P., & Su, J.-J. (2020). SME credit constraints and access to informal credit markets in Vietnam. International Journal of Social Economics, 47(6), 787–807. https://doi.org/10.1108/IJSE-11-2017-0543
Ascarya. (2021). Baitul Maal wat Tamwil as Integrated Islamic Microfinance Institution to Support SDGs. In M. M. Billah (Ed.), Islamic Wealth and the SDGs: Global Strategies for Socio-economic Impact (pp. 175–195). Springer International Publishing. https://doi.org/10.1007/978-3-030-65313-2_9
Babajide, A., Evans, O., Patience, T.-O., Hezekiah, F., Lanre, A., Felicia, O., Folashade, A., & and Ehikioya, B. (2023). Financial literacy, financial capabilities, and sustainable business model practice among small business owners in Nigeria. Journal of Sustainable Finance & Investment, 13(4), 1670–1692. https://doi.org/10.1080/20430795.2021.1962663
Bakashaba, R., Musiita, B., & Nabachwa, S. (2024). Financial literacy, access to digital finance and performance of ugandan SMEs in Mbarara City. Journal of Economics and Behavioral Studies, 16, No. 1, 41–51. https://bit.ly/4oe8rai
Charfeddine, L., Umlai, M. I., & El-Masri, M. (2024). Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: evidence from Qatari MSME importers. Financial Innovation, 10(1). https://doi.org/10.1186/s40854-023-00557-4
Efendi, Z., Wati, L. N., & Kuraesin, A. D. (2023). The role of financial literacy in strengthening the effect of digital platforms and financial technology peer-to-peer lending on capital access and MSME Growth: An empirical study of MSMEs in DKI Jakarta. International Journal of Marketing and Digital Creative, 1(1), 26-37. https://doi.org/https://doi.org/10.31098/ijmadic.v1i1.1447
Endris, E., & Kassegn, A. (2022). The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship, 11(1). https://doi.org/10.1186/s13731-022-00221-8
Frimpong, S. E., Gloria, A., & and Agyapong, D. (2022). Financial literacy, access to digital finance and performance of SMEs: Evidence From Central region of Ghana. Cogent Economics & Finance, 10(1), 2121356. https://doi.org/10.1080/23322039.2022.2121356
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, Marko. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). SAGE Publications, Inc. https://uk.sagepub.com/en-gb/eur/a-primer-on-partial-least-squares-structural-equation-modeling-pls-sem/book270548
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R. Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/https://doi.org/10.1108/EBR-11-2018-0203
Hakim, S., Laelawati, L. N., & Mardiana, R. (2022). The role of digital skills and technological innovation in improving the performance of small and medium industries: Systematic literature review. International Conference on Global Innovation and Trends in Economics and Business (ICOBIS 2022), 74–102. https://doi.org/10.2991/978-94-6463-068-8_ 7
Hartanto, S., & Suparyanto, T. (2023). Islamic finance practices in micro, small, and medium enterprises in Indonesia: A systematic literature review. Millah: Journal of Religious Studies, 435–464. https://doi.org/10.20885/millah.vol22.iss2.art6.
Helmi, S., Setyadi, B., Wedadjati, R. S., Muh. Asriadi, A. M., & Yahya, N. (2025). Empowering MSME Women: A community-based approach to digital literacy and marketing skills. Jurnal Ilmiah Ilmu Terapan Universitas Jambi, 9(1), 313–322. https://doi.org/10.22437/jiituj.v9i1.32670
Hidayati, A., Susanti, E., Jamalong, A., Ginting, D., Suwanto, W., & Arifin, A. (2024). Marketing analytics in the era of digital-based marketing strategy. Jurnal Ilmiah Ilmu Terapan Universitas Jambi, 8(1), 61–75. https://doi.org/10.22437/jiituj.v8i1.31908.
Kakembo, H.S., Abduh, M., & Pg Hj Md Salleh, P. M. H. A. (2021). Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda. Journal of Small Business and Enterprise Development, 28(4), 537–552. https://doi.org/10.1108/JSBED-04-2019-0126
Ispriyahadi, H., Zaenudin, Z., & Wati, L. N. (2025). Unlocking sustainability in informal micro enterprises: Capital access in the fintech era. Signifikan: Jurnal Ilmu Ekonomi, 14(2), 467–488. https://doi.org/10.15408/sjie.v14i2.46421
Jalil, M. F. (2021). Microfinance towards micro-enterprises development in rural Malaysia through digital finance. Discover Sustainability, 2(1). https://doi.org/10.1007/s43621-021-00066-3
Jin, L., & Liu, M. (2025). Unlocking financial opportunities: The substantial alleviation of financing constraints on small and micro enterprises through digital inclusive finance. Journal of the Knowledge Economy, 16(1), 2283–2309. https://doi.org/10.1007/s13132-024-01863-7
Jun, W., & Ran, X. Q. (2024). Dynamics in digital finance and its impact on SME financing. Heliyon, 10(9), e30586. https://doi.org/10.1016/j.heliyon.2024.e30586
Kemenko Perekonomian Press Release. (2025). Pemerintah dorong UMKM naik kelas, tingkatkan kontribusi terhadap ekspor Indonesia [The government encourages MSMEs to upgrade to increase their contribution to Indonesian exports]. https://www.ekon.go.id/publikasi/detail/6152/pemerintah-dorong-umkm-naik-kelas-tingkatkan-kontribusi-terhadap-ekspor-indonesia
Kementrian Komunikasi dan Digital RI. (2024). Micro-Financing, solusi indonesia atasi kesenjangan pendanaan UMKM [Microfinancing: Indonesia's solution to address the funding gap for MSMEs]. https://www.komdigi.go.id/berita/artikel-gpr/detail/micro-financing-solusi-indonesia-atasi-kesenjangan-pendanaan-umkm
Kemkominfo Press Release. (2024). Satu dekade, transformasi digital UMKM dorong pertumbuhan ekonomi Nasional [A decade of digital transformation of MSMEs drives National economic Growth]. https://www.komdigi.go.id/berita/pengumuman/detail/satu-dekade-transformasi-digital-umkm-dorong-pertumbuhan-ekonomi-nasional
Kurniasari, F., Lestari, E. D., & Tannady, H. (2023). Pursuing long-term business performance: investigating the effects of financial and technological factors on digital adoption to leverage SME performance and business sustainability—evidence from indonesian SMEs in the traditional market. In Sustainability (Vol. 15, Issue 16). https://doi.org/10.3390/su151612668
Liu, Y., Kamal, M. M., Zhang, J. Z., Rahman, M., & Aydin, E. (2025). Leveraging digital crowdfunding platforms for SME sustainability in emerging markets: The roles of entrepreneurial competency, social capital, and supply chain trust. Technovation, 147, 103309. https://doi.org/https://doi.org/10.1016/j.technovation.2025.103309
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 (Switzerland), 15(3). https://doi.org/10.3390/su15032171
Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: An overview. Journal of Pension Economics and Finance, 10(4), 497–508. https://doi.org/10.1017/S1474747211000448
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
Mady, K., Anwar, I., Aboelmaged, M., & Sulub, M. A. (2025). Digital entrepreneurial platform capability: Instrument development and validation, and its impact on entrepreneurial performance. Technology in Society, 82, 102886. https://doi.org/https://doi.org/10.1016/j.techsoc.2025.102886
Maftuchach, V., Rohman, A., & Darda, A. (2022). The effect of entrepreneurship orientation and marketing innovations on competitive advantage and their impact on business performance of small and medium culinary business in DKI Jakarta during the Covid 19 pandemic. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(1), 3801–3815. https://doi.org/https://doi.org/10.33258/birci.v5i1.4065
Majid, R., & Nugraha, R. A. (2022). MSMEs and Islamic securities crowdfunding: The importance of financial literacy. Muslim Business and Economic Review, 1(2), 281–304. https://doi.org/10.56529/mber.v1i2.71
Masdupi, E., Firman, Rasyid, R., & Darni, M. O. (2024). Financial literacy and sustainability in SMEs: Do financial risk attitude, access to finance, and organizational risk-taking tolerance mediate? Asian Economic and Financial Review, 14(1), 43–58. https://doi.org/10.55493/5002.v14i1.4959
Meressa, H. A. (2023). Entrepreneurial financial literacy - small business sustainability nexus in Ethiopia. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2218193
Miller, R. L. (2015). Rogers' innovation diffusion theory (1962, 1995). In Information seeking behavior and technology adoption: Theories and trends (pp. 261-274). IGI Global Scientific Publishing. https://doi.org/10.4018/978-1-4666-8156-9.ch016
Mittal, V., & Raman, T. V. (2021a). Examining the determinants and consequences of financial constraints faced by Micro, Small and Medium Enterprises’ owners. World Journal of Entrepreneurship, Management and Sustainable Development, 17(3), 560–581. https://doi.org/10.1108/WJEMSD-07-2020-0089
Mittal, V., & Raman, T. V. (2021b). Financing woes: estimating the impact of MSME financing gap on financial structure practices of firm owners. South Asian Journal of Business Studies, 11(3), 316-340. https://doi.org/10.1108/SAJBS-07-2020-0228
Moscalu, M., Girardone, C., & Calabrese, R. (2020). SMEs’ growth under financing constraints and banking markets integration in the euro area. Journal of Small Business Management, 58(4), 707–746. https://doi.org/10.1080/00472778.2019.1668722
Nik Azman, N. H., Zulkafli, A. H., Masron, T. A., & Abdul Majid, A. R. (2025). The interconnectivity between Islamic financial literacy and financial sustainability: evidence from Muslim micro-entrepreneurs in Malaysia. Journal of Islamic Accounting and Business Research, 16(4), 791–810. https://doi.org/10.1108/JIABR-07-2022-0191
Ntwoku, H., Negash, S., & Meso, P. (2017). ICT adoption in Cameroon SME: application of Bass diffusion model. Information Technology for Development, 23(2), 296–317. https://doi.org/10.1080/02681102.2017.1289884
Onyekwelu, P. N., Ibe, G. I., Monyei, F. E., Attamah, J. I., & Ukpere, W. I. (2023). The impact of entrepreneurship institutions on access to micro-financing for sustainable enterprise in an emerging economy. Sustainability (Switzerland), 15(9). https://doi.org/10.3390/su15097425
Otoritas Jasa Keuangan. (2025). Siaran pers bersama indeks literasi dan inklusi keuangan masyarakat meningkat, ojk dan bps umumkan hasil survei nasional literasi dan inklusi keuangan (SNLIK) tahun 2025 [Joint press release: Financial literacy and inclusion index increases, OJK and BPS announce results of the 2025 national financial literacy and inclusion survey (SNLIK)]. https://bit.ly/45dzMki
Rizki, A., & Hendarman, A. F. (2024). Empowering financial and digital literacy to build resilience of MSMEs: Proposed implementation in Bandung City. International Journal of Current Science Research and Review 07(10), 7581–7596. https://doi.org/10.47191/ijcsrr/V7-i10-14
Satpathy, A. sanatan, Sahoo, S. kumar, Mohanty, A., & Mohanty, P. P. (2025). Strategies for enhancements of MSME resilience and sustainability in the post-COVID-19 era. Social Sciences and Humanities Open, 11(July 2024), 101223. https://doi.org/10.1016/j.ssaho.2024.101223
Sharoh, S. M., Aini, F. N. A., & Kholmi, M. (2025). Preferensi pelaku usaha mikro kecil menengah terhadap alternatif pembiayaan syariah di perbankan syariah [Micro, Small, and Medium enterprises’ preferences for sharia financing alternatives in sharia banking]. Al-Muzdahir: Jurnal Ekonomi Syariah, 7(2), 286-294. https://doi.org/10.55352/ekis.v7i2.2041
Siddik, A. B., Rahman, M. N., & Yong, L. (2023). Do fintech adoption and financial literacy improve corporate sustainability performance? The mediating role of access to finance. Journal of Cleaner Production, 421, 137658. https://doi.org/https://doi.org/10.1016/j.jclepro.2023.137658
Susanti, E., Mulyanti, R. Y., & Wati, L. N. (2022). Systematic literature review: Increasing performance of women MSMEs through competitive advantage based on digital transformation and innovation. International Conference on Global Innovation and Trends in Economics and Business (ICOBIS 2022), 25–61. https://doi.org/10.2991/978-94-6463-068-8_ 4
Susanti, E., Mulyanti, R. Y., & Wati, L. N. (2023). MSMEs performance and competitive advantage: Evidence from women’s MSMEs in Indonesia. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2239423
Uthaileang, W., & Kiattisin, S. (2023). Developing the capability of digital financial literacy in developing countries: A Case of online loan for small entrepreneurs. Heliyon, 9(12), e21961. https://doi.org/10.1016/j.heliyon.2023.e21961
Wati, L. N., & Amalia, T. (2024). Culinary MSME business development model post the COVID-19 pandemic. International Journal of Marketing and Digital Creative, 2(1), 16–31. https://doi.org/10.31098/ijmadic.v2i1.2239
Wati, L. N., Isprihayadi, H., Nisa, K., Lutfi, M., & Suprapta, I. (2020). Financial technology and financial inclusion on MSME: Mixed-Method research approach. Moneter - Jurnal Akuntansi Dan Keuangan, 7(2), 232–236. https://doi.org/10.31294/moneter.v7i2.9583
Wati, L. N., & Momon. (2021). Metodologi Penelitian Aplikatif dengan Smart PLS (Applied Research Methodology with Smart PLS) (Momon, Ed.). Mujahid Grafis.
Widyastuti, M., & Hermanto, Y. B. (2022). The effect of financial literacy and social media on micro capital through financial technology in the creative industry sector in East Java. Cogent Economics and Finance, 10(1). https://doi.org/10.1080/23322039.2022.2087647
Yadewani, D., Pandi, O. D., Syafrani, Nurofik, A., & Poddar, S. (2024). Impact of government policies on the knowledge base of sustainable small and medium-sized enterprises. Jurnal Ilmiah Ilmu Terapan Universitas Jambi, 8(1), 251–266. https://doi.org/10.22437/jiituj.v8i1.31884.
Yu, H., Zhao, Y., Liu, Z., Liu, W., Zhang, S., Wang, F., & Shi, L. (2021). Research on the financing income of supply chains based on an E-commerce platform. Technological Forecasting and Social Change, 169, 120820. https://doi.org/https://doi.org/10.1016/j.techfore.2021.120820
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Ahmad Darda, Rama Yuli, Lela Nurlaela Wati, Ainur Abdrazakova
This work is licensed under a Creative Commons Attribution 4.0 International License.
