Sustainable Financial Management of MSMEs in Disadvantaged Regions through Digitalization Post-Pandemic

Nayla Annida Salsabila; Diana Puspitasari

doi:10.69725/jebi.v2i3.313

Authors

Nayla Annida Salsabila Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Kota Semarang, Indonesia, 50131
Diana Puspitasari Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Kota Semarang, Indonesia, 50131

DOI:

https://doi.org/10.69725/jebi.v2i3.313

Keywords:

Digital finance, Financial inclusion, Sustainability, MSMEs, Accounting

Abstract

Purpose: To explore the effect of digital financial capabilities on sustainable financial performance via digital financial inclusion.

Method: A quantitative survey-based study using structural equation modeling for analyzing MSME digital and financial management practices.

Findings: Results show the importance of digital financial inclusion as a key driver in the relationship between digital financial capabilities and sustainable financial performance. DFL, fintech use, and digital record keeping improve the inclusiveness that in turn increases financial sustainability. Liquidity discipline: its direct impact on overall performance. The former demonstrates the extent to which sustainable cash flow management processes directly contribute to overall performance. Nevertheless, digital readiness fully enhances not all of the digital finance-performance relationships in every context, also demonstrating that technological preparedness is inadequate to improve financial performance but need complementing with effective financial governance.

Novelty: This research presents a comprehensive accounting-based sustainability framework incorporating digital financial inclusion as a mediating mechanism and digital readiness as a contextual factor. It pushes beyond the efficiency outcomes that have dominated digital finance research to focus on the scope and implications of long-term financial accountability and resilience.

Implications: The results provide insights for MSME managers, policy makers, and financial service providers in designing an inclusive digital finance intervention focusing on developing the financial discipline, capability, and sustainable performance instead of immediate digital adoption itself.

Downloads

Download data is not yet available.

Author Biographies

Nayla Annida Salsabila, Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Kota Semarang, Indonesia, 50131

Nayla Annida Salsabila is an undergraduate student in the Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Indonesia. Her academic interests include macroeconomic analysis, exchange rate dynamics, and financial risk management, with particular attention to the impact of monetary policy and external economic factors on business performance. She is actively involved in quantitative research using secondary macroeconomic data and applied empirical methods. Her contribution to this study reflects her interest in integrating economic theory with practical insights relevant to risk-sensitive industries.
Diana Puspitasari, Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Kota Semarang, Indonesia, 50131

Diana Puspitasari, S.E., M.M. is a lecturer in the Department of Management, Faculty of Economics and Business, Universitas Dian Nuswantoro, Indonesia. Her academic expertise includes financial management, macroeconomic policy analysis, and applied econometrics. She has published in nationally and internationally indexed journals and actively supervises research in monetary economics and financial risk management. Her research emphasizes the integration of macroeconomic theory with empirical analysis to support evidence-based policy and managerial decision-making.

References

Afonso, A., Tovar Jalles, J., & Venâncio, A. (2024). Fiscal decentralization and public sector efficiency: Do natural disasters matter? Economic Modelling, 137, 106763. https://doi.org/https://doi.org/10.1016/j.econmod.2024.106763 DOI: https://doi.org/10.1016/j.econmod.2024.106763

Akinrinde, I. J., Adelakun, O. J., Okogor, K. C., & Jerome-Ukaoke, E. (2025). SME Prospects for Nigeria’s Economic Growth and Unemployment Reduction BT - The Palgrave Handbook of Decolonising Entrepreneurship (B. Irene, J. Lockyer, & J. Okrah (eds.); pp. 497–543). Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-92310-4_19 DOI: https://doi.org/10.1007/978-3-031-92310-4_19

Alkaraan, F., Albitar, K., Hussainey, K., & Venkatesh, V. G. (2022). Corporate transformation toward Industry 4.0 and financial performance: The influence of environmental, social, and governance (ESG). Technological Forecasting and Social Change, 175, 121423. https://doi.org/https://doi.org/10.1016/j.techfore.2021.121423 DOI: https://doi.org/10.1016/j.techfore.2021.121423

Allen, F., Demirguc-Kunt, A., Klapper, L., & Martinez Peria, M. S. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. In Journal of Financial Intermediation (Vol. 27, Issue December). https://doi.org/10.1016/j.jfi.2015.12.003 DOI: https://doi.org/10.1016/j.jfi.2015.12.003

Andhini, N. F. (2017). A Primer on Partial Least Squares Structural Equation Modeling ( PLS-SEM ). In Journal of Chemical Information and Modeling (Vol. 53, Issue 9).

Appiah, T., & Agblewornu, V. V. (2025). The interplay of perceived benefit, perceived risk, and trust in Fintech adoption: Insights from Sub-Saharan Africa. Heliyon, 11(2), e41992. https://doi.org/https://doi.org/10.1016/j.heliyon.2025.e41992 DOI: https://doi.org/10.1016/j.heliyon.2025.e41992

Beck, T., & Demirguc-Kunt, A. (2006). Small and medium-size enterprises: Access to finance as a growth constraint. Journal of Banking & Finance, 30(11), 2931–2943. https://doi.org/https://doi.org/10.1016/j.jbankfin.2006.05.009 DOI: https://doi.org/10.1016/j.jbankfin.2006.05.009

Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56. https://doi.org/https://doi.org/10.1016/j.jclepro.2013.11.039 DOI: https://doi.org/10.1016/j.jclepro.2013.11.039

Bourke, S. A., Taucare, M., Devoie, É., Hansen, C., N. Wright, S., Shanafield, M., Re, V., Kagawa-Viviani, A., Kenny, A., Bell, G., Diene, M., Kreamer, D. K., Gurmessa, S. K., Mulligan, B., Sarris, T. S., Cuthbert, M. O., Wallis, K.-J., & Moggridge, B. (2025). Hydrogeology, European colonialism, local communities and First Peoples: moving beyond business as usual. Hydrogeology Journal. https://doi.org/10.1007/s10040-025-02955-7 DOI: https://doi.org/10.1007/s10040-025-02955-7

Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of Business Venturing, 25(1), 24–40. https://doi.org/https://doi.org/10.1016/j.jbusvent.2008.10.007 DOI: https://doi.org/10.1016/j.jbusvent.2008.10.007

Chakhovich, T., & Virtanen, T. (2025). The role of the interest in technology use in blurring the lines between accountability for sustainability performance and for financial performance. Journal of Accounting & Organizational Change, 21(7), 147–168. https://doi.org/10.1108/JAOC-08-2023-0143 DOI: https://doi.org/10.1108/JAOC-08-2023-0143

Clark, R. L., Lusardi, A., & Mitchell, O. S. (2025). Does being financially resilient lead to better economic outcomes? Journal of Financial Literacy and Wellbeing, 1–18. https://doi.org/DOI: 10.1017/flw.2024.23 DOI: https://doi.org/10.1017/flw.2024.23

Ghouri, A. M., Akhtar, P., Haq, M. A., Mani, V., Arsenyan, G., & Meyer, M. (2021). Real-time information sharing, customer orientation, and the exploration of intra-service industry differences: Malaysia as an emerging market. Technological Forecasting and Social Change, 167, 120684. https://doi.org/https://doi.org/10.1016/j.techfore.2021.120684 DOI: https://doi.org/10.1016/j.techfore.2021.120684

Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the Fintech Revolution: Interpreting the Forces of Innovation, Disruption, and Transformation in Financial Services. Journal of Management Information Systems, 35(1), 220–265. https://doi.org/10.1080/07421222.2018.1440766 DOI: https://doi.org/10.1080/07421222.2018.1440766

Jassem, S., & Abdelfattah, F. (2025). Digitalization of accounting processes and performance of small and medium enterprises: mediating role of exploitation and exploration. Journal of Applied Accounting Research, 1–17. https://doi.org/10.1108/JAAR-04-2024-0117 DOI: https://doi.org/10.1108/JAAR-04-2024-0117

Kraus, P., Stokes, P., Tarba, S. Y., Rodgers, P., Dekel-Dachs, O., Britzelmaier, B., & Moore, N. (2022). The ambidextrous interaction of RBV-KBV and regional social capital and their impact on SME management. Journal of Business Research, 142, 762–774. https://doi.org/https://doi.org/10.1016/j.jbusres.2021.12.047 DOI: https://doi.org/10.1016/j.jbusres.2021.12.047

Kraus, S., Durst, S., Ferreira, J. J., Veiga, P., Kailer, N., & Weinmann, A. (2022). Digital transformation in business and management research: An overview of the current status quo. International Journal of Information Management, 63, 102466. https://doi.org/https://doi.org/10.1016/j.ijinfomgt.2021.102466 DOI: https://doi.org/10.1016/j.ijinfomgt.2021.102466

Lusardi, A., & Mitchell, O. S. (2013). The economic importance of financial literacy. Journal of Economic Literature, 52(1), 65.

Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5 DOI: https://doi.org/10.1257/jel.52.1.5

Lusardi, A., & Mitchell, O. S. (2023). The Importance of Financial Literacy: Opening a New Field. Journal of Economic Perspectives, 37(4), 137–154. https://doi.org/10.1257/jep.37.4.137 DOI: https://doi.org/10.1257/jep.37.4.137

Mitchell, O. S., & Lusardi, A. (2011). The Outlook for Financial Literacy. Financial Literacy: Implications for Retirement Security and the Financial Marketplace. https://doi.org/10.1093/acprof:oso/9780199696819.003.0001 DOI: https://doi.org/10.1093/acprof:oso/9780199696819.001.0001

Murinde, V., Rizopoulos, E., & Zachariadis, M. (2022). The impact of the FinTech revolution on the future of banking: Opportunities and risks. International Review of Financial Analysis, 81, 102103. https://doi.org/https://doi.org/10.1016/j.irfa.2022.102103 DOI: https://doi.org/10.1016/j.irfa.2022.102103

OECD. (2023). INFE 2023 international survey of adult financial literacy. INFE 2023 International Survey of Adult Financial Literacy.

Sagala, G. H., & Őri, D. (2025). Exploring digital transformation strategy to achieve SMEs resilience and antifragility: a systematic literature review. Journal of Small Business and Entrepreneurship, 37(3), 495–524. https://doi.org/10.1080/08276331.2024.2392080 DOI: https://doi.org/10.1080/08276331.2024.2392080

Scuotto, V., Nicotra, M., Del Giudice, M., Krueger, N., & Gregori, G. L. (2021). A microfoundational perspective on SMEs’ growth in the digital transformation era. Journal of Business Research, 129, 382–392. https://doi.org/https://doi.org/10.1016/j.jbusres.2021.01.045 DOI: https://doi.org/10.1016/j.jbusres.2021.01.045

Trinh, Q. L., Morgan, P. J., & Sonobe, T. (2020). Investment behavior of MSMEs during the downturn periods: Empirical evidence from Vietnam. Emerging Markets Review, 45, 100739. https://doi.org/https://doi.org/10.1016/j.ememar.2020.100739 DOI: https://doi.org/10.1016/j.ememar.2020.100739

Verma, A., Das, K. C., & Misra, P. (2024). Digital finance and MSME performance in India: evidence from World Bank Enterprise Survey data. Journal of Economic Studies, 52(5), 887–903. https://doi.org/10.1108/JES-12-2023-0744 DOI: https://doi.org/10.1108/JES-12-2023-0744