The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia
The integration of digitalization in micro, small, and medium enterprises (MSMEs) has become a cornerstone in enabling these businesses to thrive within an increasingly competitive and dynamic marketplace. This study, based on data from a survey of 5,553 MSMEs, examines the impact of digitalization...
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| Format: | Article |
| Language: | English |
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Master Program in Economics, Graduate Program of Universitas Jambi
2024-10-01
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| Series: | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
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| Online Access: | https://online-journal.unja.ac.id/JES/article/view/36399 |
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| author | Harunurrasyid Harunurrasyid Gustriani Gustriani Mardalena Mardalena Rahma Nida |
| author_facet | Harunurrasyid Harunurrasyid Gustriani Gustriani Mardalena Mardalena Rahma Nida |
| author_sort | Harunurrasyid Harunurrasyid |
| collection | DOAJ |
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The integration of digitalization in micro, small, and medium enterprises (MSMEs) has become a cornerstone in enabling these businesses to thrive within an increasingly competitive and dynamic marketplace. This study, based on data from a survey of 5,553 MSMEs, examines the impact of digitalization on financial inclusion and enterprise productivity. The findings reveal that digitalization reduces MSMEs' dependence on traditional banking systems for credit, facilitating access to alternative financing options through internet-based technologies. Moreover, advancements in technology contribute to increased bank loans and improved MSME productivity by overcoming conventional barriers to financial inclusion and reaching previously underserved segments of the MSME sector. The adoption of formal business status fosters structured and organized operations, thereby enhancing overall performance, while the mere longevity of a business does not guarantee increased productivity. Additionally, improved financial management skills acquired through training are shown to diminish reliance on traditional bank financing. The study also highlights the adverse effects of the COVID-19 pandemic, including lockdown measures, supply chain disruptions, and changes in consumer behavior, which collectively led to a decline in MSME productivity.
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| format | Article |
| id | doaj-art-98d6163450d7471987d3e366ee155ab8 |
| institution | Kabale University |
| issn | 2338-4603 2355-8520 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | Master Program in Economics, Graduate Program of Universitas Jambi |
| record_format | Article |
| series | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| spelling | doaj-art-98d6163450d7471987d3e366ee155ab82025-01-01T08:35:13ZengMaster Program in Economics, Graduate Program of Universitas JambiJurnal Perspektif Pembiayaan dan Pembangunan Daerah2338-46032355-85202024-10-0112410.22437/ppd.v12i4.36399The impact of digital transformation on financial inclusion: Evidence from MSMEs in IndonesiaHarunurrasyid Harunurrasyid0Gustriani Gustriani1Mardalena Mardalena2Rahma Nida3Department of Economic Development, Faculty of Economics, Universitas Sriwijaya, IndonesiaDepartment of Economic Development, Faculty of Economics, Universitas Sriwijaya, IndonesiaDepartment of Economic Development, Faculty of Economics, Universitas Sriwijaya, IndonesiaDepartment of Economic Development, Faculty of Economics, Universitas Sriwijaya, Indonesia The integration of digitalization in micro, small, and medium enterprises (MSMEs) has become a cornerstone in enabling these businesses to thrive within an increasingly competitive and dynamic marketplace. This study, based on data from a survey of 5,553 MSMEs, examines the impact of digitalization on financial inclusion and enterprise productivity. The findings reveal that digitalization reduces MSMEs' dependence on traditional banking systems for credit, facilitating access to alternative financing options through internet-based technologies. Moreover, advancements in technology contribute to increased bank loans and improved MSME productivity by overcoming conventional barriers to financial inclusion and reaching previously underserved segments of the MSME sector. The adoption of formal business status fosters structured and organized operations, thereby enhancing overall performance, while the mere longevity of a business does not guarantee increased productivity. Additionally, improved financial management skills acquired through training are shown to diminish reliance on traditional bank financing. The study also highlights the adverse effects of the COVID-19 pandemic, including lockdown measures, supply chain disruptions, and changes in consumer behavior, which collectively led to a decline in MSME productivity. https://online-journal.unja.ac.id/JES/article/view/36399Bank loansDigitalizationFinancial inclusionMSMEsProductivity |
| spellingShingle | Harunurrasyid Harunurrasyid Gustriani Gustriani Mardalena Mardalena Rahma Nida The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia Jurnal Perspektif Pembiayaan dan Pembangunan Daerah Bank loans Digitalization Financial inclusion MSMEs Productivity |
| title | The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia |
| title_full | The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia |
| title_fullStr | The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia |
| title_full_unstemmed | The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia |
| title_short | The impact of digital transformation on financial inclusion: Evidence from MSMEs in Indonesia |
| title_sort | impact of digital transformation on financial inclusion evidence from msmes in indonesia |
| topic | Bank loans Digitalization Financial inclusion MSMEs Productivity |
| url | https://online-journal.unja.ac.id/JES/article/view/36399 |
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