The Influence of Digital Financial Literacy on MSME Performance in Balikpapan City

Abstract

The development of the world of technology that is happening more rapidly now makes access to the digital world more wide open and easier. However, not everyone can easily and understand how to use this access, especially related to the use of digital finance in the world of Micro, Small and Medium Enterprises (MSMEs) due to low public education. Lack of information and knowledge on how to use and utilize digital finance makes some entrepreneurs use it. MSME business owners must continue to play a role in supervising, bookkeeping and recording stock entry and exit, recording sales and payments is still done manually by most MSMEs in Balikpapan City. With the increasingly rapid developments in the digital world, MSME business actors are expected to be able to innovate all MSME activities in a Management Information System (MIS) as the aim of business development with technological transformation and speed of service in handling customers and business management. This study aims to examine the effect of digital financial literacy on the performance of MSMEs with a research approach using the questionnaire method for MSMEs in Balikpapan City. Multiple regression analysis was applied to test the effect of digital financial literacy on MSME performance by controlling for manager profiles and the special characteristics of MSME. The research results prove that Digital financial literacy has a positive and significant effect on the performance of MSMEs. Managers/owners with digital financial literacy skills understand financial concepts related to business, debt, savings, insurance, and investment in the digital era which ensures good performance of their business.