The Influence of Financial Literacy, Financial Behavior, and Utilization of Financial Technology on the Performance of MSMEs in Ujungpangkah District

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are one of the sectors that have a strategic role in the Indonesian economy. Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in the Indonesian economy by making significant contributions to the national Gross Domestic Product (GDP) and providing substantial employment opportunities. However, many MSME owners still face challenges in financial management, which can affect their business financial performance. This study aims to analyze the influence of financial literacy, financial behavior, and the utilization of financial technology on the financial performance of MSMEs in Ujungpangkah District. The study employed a quantitative approach using a survey method involving MSME owners who had operated their businesses for at least one year. Data were analyzed using SmartPLS. The results indicate that financial literacy and the utilization of financial technology have a positive effect on the financial performance of MSMEs. Financial behavior also plays an important role in supporting better financial management practices. These findings suggest that improving financial literacy and encouraging the adoption of financial technology can serve as effective strategies for enhancing the financial performance of MSMEs.