<![CDATA[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 microfinance and the development of MSMEs', 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 the growth of MSMEs, aligning with the theories of Diffusion of Innovations, the Technology Acceptance Model, and the Resource-Based View. The ineffectiveness of microfinance as a mediating variable reveals a disparity between access to financing and productive utilization of funds. The negative moderating effect of religiosity on the relationship between financial literacy and microfinancing indicates 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 the moderating role of religiosity and the ineffectiveness of microfinancing as mediating factors in MSME digitalization in developing countries.]]>
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