The Effect of A Digital Financial Literacy on Financial Performance of Msmes: A Quasi-Experimental Study Supporting SDG

Abstract

Objective: The objective of this study is to examine the impact of a digital financial literacy program on the financial performance of micro, small, and medium enterprises in West Java and North Sumatra. The aim is to evaluate the effectiveness of the program in improving digital financial literacy and financial outcomes for MSMEs owners, thereby contributing to SDG goal 8 (Decent Work and Economic Growth). Theoretical Framework: This research is grounded in theories of financial literacy. Key frameworks include the six dimensions of digital financial literacy: financial knowledge, digital knowledge, practical know-how, awareness, decision-making, and self-protection. These dimensions provide a robust basis for assessing the intervention's impact. Method: A quasi-experimental design was employed, involving 107 MSMEs owners who use QRIS as a digital payment tool. The sample was divided into a treatment group (n=54, Medan, North Sumatra) and a control group (n=53, Gresik, West Java). The intervention included six weekly sessions covering the six digital financial literacy dimensions. Data were collected via pre- and post-tests, analyzed using paired t-tests and independent sample t-tests, with a 5% significance threshold. Results and Discussion: This study reveals that there were no significant differences in pretest scores between the treatment and control groups. However, the treatment group showed a significant increase in digital financial literacy scores compared to the control group in the post-test. The experimental group demonstrated a greater improvement in financial performance among MSMEs in North Sumatra compared to those in West Java. Research Implications: This study highlights the need for targeted digital financial literacy programs to boost MSME performance and reduce disparities. It supports SDG goal 8 by emphasizing sustainable micro-enterprises to enhance economic productivity. Policymakers should promote tailored training and collaborative technology adoption. Originality/Value: By testing a multi-dimensional digital financial literacy program within an Indonesian MSMEs context, this study underscores the critical role of digital literacy in improving financial performance and fostering inclusive economic growth.