THE ROLE OF DIGITAL FINANCIAL LITERACY ON FIRM PERFORMANCE IN MICRO INDUSTRY

Kusuma RATNAWATI; Mochamad SOELTON

doi:10.33068/iccd.v4i1.447

Kusuma RATNAWATI Brawijaya University
Mochamad SOELTON Universitas Mercu Buana

DOI: https://doi.org/10.33068/iccd.v4i1.447

Keywords: digital financial literacy, firm performance, digital era, digitization

Abstract

Most of businesses in the contemporary era have been touched by technology with all the conveniences it offers. The average growing business has understood digitalization in managing their business, especially digitalization in terms of finance and payments. However, digitalization in business needs to be balanced with good financial literacy so that the firm performance of a company can be measured clearly. The purpose of this study was to find out how the role of digital financial literacy on the firm performance of SMEs in East Java. This research is quantitative research with an explanatory approach. The population used in this study is MSME actors who apply digitalization to their businesses in East Java. The sampling technique used in this research is purposive sampling. Referring to the specified sample criteria, the research sample used in this study was 100 research respondents. The data collection method used in this study is a questionnaire with a Likert scale of 1 (strongly disagree) to 5 (strongly agree) via a google form. The data analysis used in this research is SEM-PLS assisted by SmartPLS software. The results of the study explain that digital financial literacy has a significant effect on firm performance. The level of digital financial literacy allows business actors to understand digital financial products. Not only that, with a good level of digital financial literacy, business actors are also more aware of the risks and threats that arise with access to digital finance.

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