Financial Digitalization and Literacy in MSMEs Financial Decision-Making: The Mediating Role of Self-Efficacy
Keywords:
Digitalization, Literacy, Self-efficacy, Decision-making, MSMEsAbstract
This study examines the roles of financial digitalization and financial literacy in shaping financial decision-making among Micro, Small, and Medium Enterprises (MSMEs) in Banyumas Regency, with financial self-efficacy positioned as a mediating variable. Adopting a quantitative research design, the study collected survey data and analyzed them using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The results demonstrate that both financial digitalization and financial literacy exert positive and significant effects on financial decision-making. Moreover, these two variables significantly enhance financial self-efficacy, which, in turn, positively influences financial decision-making. The mediation analysis further confirms that financial self-efficacy significantly mediates the effects of financial digitalization and financial literacy on financial decision-making, although the magnitude of the indirect effects remains relatively modest. These findings suggest that effective financial decision-making among MSMEs is not solely determined by access to digital financial tools and financial knowledge, but also by entrepreneurs’ confidence in applying such knowledge and resources. This study underscores the importance of integrating technological, cognitive, and psychological dimensions in strengthening MSMEs’ financial capability and decision-making performance in the digital era.
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