THE INFLUENCE OF DIGITAL PAYMENTS AND FINANCIAL LITERACY ON MSME PERFORMANCE WITH FINANCIAL INCLUSION AS MEDIATION VARIABLES

Abstract

People in today's digital era are required to be able to utilize technology in the business world, including MSME players with the target of improving more optimal performance. The success of an MSME in the business world is determined based on the performance produced, so it is important to determine the factors that can affect the performance of MSMEs. This study aims to determine the effect of digital payments and financial literacy on MSME performance mediated by financial inclusion. The population in this study is all MSMEs in Denpasar City during 2021, amounting to 32,026 MSMEs. The sample was determined by the purposive sampling method and calculated based on the Slovin formula so that a sample of 100 MSMEs was obtained. The data analysis technique used in this study is SemPLS. The results showed that digital payments and financial literacy have a positive and significant effect on financial inclusion. The more innovation and development in digital payments and the better financial knowledge of business actors tend to bring significant changes to financial inclusion. Digital payments, financial literacy, and financial inclusion have a positive and significant effect on the performance of MSMEs. Through digital payments and financial knowledge that is owned can provide convenience for users, it will then have an impact on improving the performance of MSMEs. In addition, financial inclusion mediates the influence of digital payments and financial literacy on the performance of MSMEs in Denpasar City. The existence of financial inclusion makes it easier for business actors to get financial access that can support the use of digital payments and financial literacy owned by MSME actors in creating optimal business performance.

Keywords

• digital payment
• financial literacy
• financial inclusion
• msme performance