Beyond Digital Adoption: How Financial Technology and Digital Literacy Shape MSME Financial Performance through Financial Literacy

Nur Sayidatul Muntiah (Universitas Muhammadiyah Ponorogo)
Nurul Hidayah (Universitas Muhammadiyah Ponorogo)
Arif Hartono (Universitas Muhammadiyah Ponorogo)
Wizdan Choiriyah (Universitas Muhammadiyah Ponorogo)

SENTRALISASI
Vol. 15 No. 3 (2026): September

The digital economy has encouraged Micro, Small, and Medium Enterprises (MSMEs) to adopt digital technologies to enhance business performance and competitiveness. This study examines the effects of Financial Technology (FinTech) and digital literacy on MSME financial performance, with financial literacy serving as a mediating variable. Data were collected from 100 MSME owners in Ponorogo Regency, Indonesia, using proportionate stratified random sampling The proposed model was evaluated using Partial Least Squares Structural Equation Modeling (PLS-SEM). The empirical results demonstrate that FinTech, digital literacy, and financial literacy each exert a positive and significant effect on financial performance. FinTech adoption and digital literacy also contribute significantly to improving financial literacy. Furthermore, financial literacy partially mediates the relationship between FinTech and financial performance but does not mediate the effect of digital literacy on financial performance. These findings suggest that digital transformation should be accompanied by stronger financial capabilities, enabling MSMEs to convert technological adoption into sustainable financial performance.