Financial Literacy as a Mediator: Entrepreneurial Orientation and Fintech Adoption on MSME Financial Performance in Kediri
DOI:
https://doi.org/10.24239/jiebi.v8i1.444.97-119Keywords:
Financial Literacy, Entrepreneurial Orientation, Fintech Adoption, MSME Financial PerformanceAbstract
Despite the growing adoption of financial technology and entrepreneurial practices among MSMEs, limited attention has been given to the mechanisms through which these capabilities improve financial performance. This study examines the role of financial literacy as a mediating mechanism linking entrepreneurial orientation, fintech adoption, and MSME financial performance in Kediri City. Using a quantitative explanatory approach, data were collected from 195 MSMEs and analyzed using PLS-SEM. The findings show that entrepreneurial orientation positively affects financial literacy but does not directly affect financial performance. In contrast, fintech adoption has a significant direct effect on both financial literacy and financial performance. Financial literacy significantly improves financial performance and serves as a full mediator between entrepreneurial orientation and financial performance, and as a partial mediator between fintech adoption and financial performance. The study concludes that financial literacy is a key mechanism through which entrepreneurial and technological capabilities are translated into financial outcomes. This study contributes to MSME performance literature by integrating financial literacy into a mediation framework and offers practical implications for policymakers, financial institutions, and fintech providers in strengthening financial capability, digital adoption, and inclusive MSME empowerment.
References
Abdallah, W., Harraf, A., Ghura, H., & Abrar, M. (2025). Financial literacy and small and medium enterprises performance: the moderating role of financial access. Journal of Financial Reporting and Account-ing, 23(4), 1345–1364. https://doi.org/10.1108/JFRA-06-2024-0337
Al Suwaidi, R. A., & Mertzanis, C. (2024). Fi-nancial literacy and FinTech market growth around the world. International Review of Financial Analysis, 95, 103481. https://doi.org/10.1016/j.irfa.2024.103481
Alshannag, F. M., Hani, M. M. B., Eneizan, B., Arif, K., & Rawash, H. N. (2025). The im-pact of financial technology (FinTech) on improving financial performance: The case of commercial banks in Jordan. In-ternational Journal of Advanced and Applied Sciences, 12(3), 28–37. https://doi.org/10.21833/ijaas.2025.03.004
Alshebami, A. S., & Al Marri, S. H. (2022). The Impact of Financial Literacy on Entrepre-neurial Intention: The Mediating Role of Saving Behavior. Frontiers in Psychology, 13, 911605. https://doi.org/10.3389/fpsyg.2022.911605
Amnas, M. B., Selvam, M., & Parayitam, S. (2024). FinTech and Financial Inclusion: Exploring the Mediating Role of Digital Financial Literacy and the Moderating In-fluence of Perceived Regulatory Support. Journal of Risk and Financial Management, 17(3), 108. https://doi.org/10.3390/jrfm17030108
Anuj, Singh, N., Khanna, R., & Naidu, K. (2023). Role of MSME Sector in Growth and Development of the Economy: A Quantitative Investigation. European Eco-nomic Letters, 13(1), 350–354. https://doi.org/10.52783/eel.v13i1.181
Arianti, B. F. (2021). Literasi Keuangan (Teori dan Implementasinya) (W. Kurniawan, Ed.). CV. Pena Persada.
Baker, H., Kaddumi, T. A., Nassar, M. D., & Muqattash, R. S. (2023). Impact of Finan-cial Technology on Improvement of Banks’ Financial Performance. Journal of Risk and Financial Management, 16(4), 230. https://doi.org/10.3390/jrfm16040230
Basco, R., Hernández-Perlines, F., & Rodríguez-García, M. (2020). The effect of entrepreneurial orientation on firm per-formance: A multigroup analysis compar-ing China, Mexico, and Spain. Journal of Business Research, 113, 409–421. https://doi.org/10.1016/j.jbusres.2019.09.020
Bian, W., Wang, S., & Xie, X. (2024). How val-uable is FinTech adoption for traditional banks? European Financial Management, 30(3), 1065–1093. https://doi.org/10.1111/eufm.12424
Buchdadi, A. D., Sholeha, A., Ahmad, G. N., & Mukson. (2020). the Influence of Finan-cial Literacy on Smes Performance Through Access To Finance and Financial Risk Attitude As Mediation Variables. Academy of Accounting and Financial Stud-ies Journal, 24(5), 1–16. https://www.abacademies.org/articles/the-influence-of-financial-literacy-on-smes-performance-through-access-to-finance-and-financial-risk-attitude-as-mediation-variabl-9624.html
Chan, R., Troshani, I., Rao Hill, S., & Hoff-mann, A. (2022). Towards an understand-ing of consumers’ FinTech adoption: the case of Open Banking. International Jour-nal of Bank Marketing, 40(4), 886–917. https://doi.org/10.1108/IJBM-08-2021-0397
Clark, D. R., Pidduck, R. J., Lumpkin, G. T., & Covin, J. G. (2024). Is It Okay to Study En-trepreneurial Orientation (EO) at the In-dividual Level? Yes! Entrepreneurship: Theory and Practice, 48(1), 349–391. https://doi.org/10.1177/10422587231178885
Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic Manage-ment Journal, 10(1), 75–87. https://doi.org/10.1002/smj.4250100107
Covin, J. G., & Wales, W. J. (2012). The Meas-urement of Entrepreneurial Orientation. Entrepreneurship Theory and Practice, 36(4), 677–702. https://doi.org/10.1111/j.1540-6520.2010.00432.x
Covin, J. G., & Wales, W. J. (2019). Crafting High-Impact Entrepreneurial Orientation Research: Some Suggested Guidelines. Entrepreneurship Theory and Practice, 43(1), 3–18. https://doi.org/10.1177/1042258718773181
Csiszarik-Kocsir, A., & Molnar, A. (2025). The Financial Awareness of Hungarian En-terprises in Financial Decision-Making. In ICCC 2025 - IEEE 12th International Joint Conference on Cybernetics and Computa-tional Cybernetics, Cyber-Medical Systems, Proceedings (pp. 203–207). IEEE. https://doi.org/10.1109/ICCC64928.2025.10999129
Culebro-Martínez, R., Moreno-García, E., & Hernández-Mejía, S. (2024). Financial Lit-eracy of Entrepreneurs and Companies’ Performance. Journal of Risk and Financial Management, 17(2), 63. https://doi.org/10.3390/jrfm17020063
Desai, A. D., Sensarma, R., & Thomas, A. (2024). Roles of financial literacy and en-trepreneurial orientation in economic empowerment of rural women entrepre-neurs. Oxford Development Studies, 52(3), 243–260. https://doi.org/10.1080/13600818.2024.2403066
Dewi, N. G., Ridhasyah, R., & Wibawa, T. A. (2023). Financial Access and MSMEs Per-formance during Pandemic COVID-19: The Moderating Role of Digitization. Journal of Developing Economies, 8(1), 144–152. https://doi.org/10.20473/jde.v8i1.36843
Gao, J., Siddik, A. B., Khawar Abbas, S., Ha-mayun, M., Masukujjaman, M., & Alam, S. S. (2023). Impact of E-Commerce and Digital Marketing Adoption on the Fi-nancial and Sustainability Performance of MSMEs during the COVID-19 Pandemic: An Empirical Study. Sustainability, 15(2), 1594. https://doi.org/10.3390/su15021594
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sar-stedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R. In Practical Assessment, Research and Evaluation (Vol. 21, Number 1). Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7
Hererra, J. J. D., Warokka, A., & Aqmar, A. Z. (2023). Financial Literacy and MSME Per-formance: Mediation and Moderation Analysis. Journal of Sustainable Economics, 1(2), 65–76. https://doi.org/10.32734/jse.v1i2.14304
Hidayat-ur-Rehman, I. (2025). The role of fi-nancial literacy in enhancing firm’s sus-tainable performance through Fintech adoption: a moderated mediation analy-sis. International Journal of Innovation Sci-ence, 17(4), 754–785. https://doi.org/10.1108/IJIS-03-2024-0056
Hu, Z., Ding, S., Li, S., Chen, L., & Yang, S. (2019). Adoption intention of fintech ser-vices for bank users: An empirical exami-nation with an extended technology ac-ceptance model. Symmetry, 11(3), 340. https://doi.org/10.3390/sym11030340
Hutauruk, R. P. S., Zalukhu, R. S., Collyn, D., Jayanti, S. E., & Damanik, S. W. H. (2024). Peran perilaku pengelolaan keuangan se-bagai mediator dalam meningkatkan kinerja keuangan UMKM di kota Medan. JPPI (Jurnal Penelitian Pendidikan Indone-sia), 10(1), 302. https://doi.org/10.29210/020243356
Jamilah, H. M., & Mardiana, L. (2024). the Role of Fintech and Financial Literacy on MSME Performance. Journal of Entrepre-neurship, 36–46. https://doi.org/10.56943/joe.v3i2.560
Kajol, K., Singh, R., & Paul, J. (2022). Adoption of digital financial transactions: A review of literature and future research agenda. Technological Forecasting and Social Change, 184(121991), 121991. https://doi.org/10.1016/j.techfore.2022.121991
Kang, G. L., & Park, C. W. (2024). The impact of financial literacy and financial man-agement behavior on recognition of startup opportunity. Journal of Infrastruc-ture, Policy and Development, 8(9), 7268. https://doi.org/10.24294/jipd.v8i9.7268
Khera, P., Ng, S., Ogawa, S., & Sahay, R. (2022). Measuring Digital Financial Inclu-sion in Emerging Market and Developing Economies: A New Index. Asian Economic Policy Review, 17(2), 213–230. https://doi.org/10.1111/aepr.12377
Kompas TV. (2023). Pasca Pandemi, UMKM di Kota Kediri Tumbuh Hingga 21 Persen. In KompasTV (p. https://www.kompas.tv/regional/410139/pasca-pandem). https://www.kompas.tv/regional/410139/pasca-pandemi-umkm-di-kota-kediri-tumbuh-hingga-21-persen
Koskelainen, T., Kalmi, P., Scornavacca, E., & Vartiainen, T. (2023). Financial literacy in the digital age—A research agenda. Jour-nal of Consumer Affairs, 57(1), 507–528. https://doi.org/10.1111/joca.12510
Kurniasari, F., Abd Hamid, N., & Lestari, E. D. (2025). Unraveling the impact of financial literacy, financial technology adoption, and access to finance on small medium enterprises business performance and sustainability: a serial mediation model. Cogent Business and Management, 12(1). https://doi.org/10.1080/23311975.2025.2487837
Kurniasari, F., & Lestari, E. D. (2024). Devel-opment of Financial Literacy and Fintech Adoption on Women SMEs Business Per-formance in Indonesia. Eastern-European Journal of Enterprise Technologies, 5(13(131)), 67–75. https://doi.org/10.15587/1729-4061.2024.312613
Li, J., Wei, R., & Sui, L. (2025). How Does Fi-nancial Technology Innovation Impact Business Performance? Emerging Markets Finance and Trade, 61(1), 110–124. https://doi.org/10.1080/1540496X.2024.2377996
Liu, P., Cai, P., & Wang, J. (2025). The dual driving mechanism of financial literacy and risky financial assets on household entrepreneurial decision-making. Finance Research Letters, 72(106511), 106511. https://doi.org/10.1016/j.frl.2024.106511
Lontchi, C. B., Yang, B., & Shuaib, K. M. (2023). Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Ef-fect of Financial Literacy. Sustainability (Switzerland), 15(3), 2171. https://doi.org/10.3390/su15032171
Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Econom-ics and Statistics, 155(1), 1–8. https://doi.org/10.1186/s41937-019-0027-5
Maesaroh, S. S., Rahayu, A., Wibowo, L. A., & Ahman, E. (2023). Financial Availability on Performance of MSMEs: Mediation of Entrepreneurial Orientation and Business Actor’s Rationality. Jurnal Economia, 19(1), 68–80. https://doi.org/10.21831/economia.v19i1.48918
Miran, M., Evinita, L. L., & Pesak, P. J. (2025). Factors Affecting the Financial Perfor-mance of MSMEs in 3T (Frontier, Outer-most, and Underdeveloped) Areas: The Moderating Role of Financial Literacy. Society, 13(1), 350–368. https://doi.org/10.33019/society.v13i1.802
Mirza, N., Umar, M., Afzal, A., & Firdousi, S. F. (2023). The role of fintech in promoting green finance, and profitability: Evidence from the banking sector in the euro zone. Economic Analysis and Policy, 78, 33–40. https://doi.org/10.1016/j.eap.2023.02.001
Miswanto, M., Tarigan, S. T., Wardhani, S., Khuan, H., Rahmadyanti, E., Jumintono, J., Ranatarisza, M. M., & Machmud, M. (2024). Investigating the influence of fi-nancial literacy and supply chain man-agement on the financial performance and sustainability of SMEs. Uncertain Supply Chain Management, 12(1), 407–416. https://doi.org/10.5267/j.uscm.2023.9.011
Mittal, V., & Raman, T. V. (2021). Examining the determinants and consequences of fi-nancial constraints faced by Micro, Small and Medium Enterprises’ owners. World Journal of Entrepreneurship, Management and Sustainable Development, 17(3), 560–581. https://doi.org/10.1108/WJEMSD-07-2020-0089
Muchson, M., Anas, M., & Forijati, R. R. (2024). Analyzing Economic Growth through Creative Economic Development Strategy in East Java, Indonesia. Qubahan Academic Journal , 4(2), 382–399. https://doi.org/10.48161/qaj.v4n2a603
Mulyadi, M., Hendratni, T. W., & Wulandjani, H. (2024). Analysis of the effect of finan-cial literacy and financial behavior on the performance of MSMEs Setu Babakan with digital competency as a moderating variable. Edelweiss Applied Science and Technology, 8(6), 5310–5328. https://doi.org/10.55214/25768484.v8i6.3176
Naveen, H. M. (2024). Role and Perfor-mance(s) of MSMEs in Indian Economy. International Journal of Scientific Research in Science and Technology, 11(5), 348–354. https://doi.org/10.32628/ijsrst24115110
Nugraha, D. P., Setiawan, B., Nathan, R. J., & Fekete-Farkas, M. (2022). Fintech Adop-tion Drivers for Innovation for SMEs in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(4), 208. https://doi.org/10.3390/joitmc8040208
Nugraheni, P., Darma, E. S., & Muhammad, R. (2025). Adoption of Digital Technology and Financial Knowledge: Strategies for Achieving Sustainable Performance of MSMEs. Journal of Risk and Financial Man-agement, 18(11), 646. https://doi.org/10.3390/jrfm18110646
OJK. (2022). Infografis Hasil Survei Nasional Literasi dan Inklusi Keuangan Tahun 2022. In Ojk.Go.Id (p. Info terkini : Berita dan Kegiatan). https://www.ojk.go.id/id/berita-dan-kegiatan/info-terkini/Pages/Infografis-Survei-Nasional-Literasi-dan-Inklusi-Keuangan-Tahun-2022.aspx#:~:text=Hasil SNLIK 2022 menunjukkan indeks,2019 yaitu 76,19 persen.
Pashaei, A., Hassani, M., Mohajeran, B., & Shahbazi, K. (2024). Economics Educa-tion, Decision-Making, and Entrepreneur-ial Intention: A Mediation Analysis of Fi-nancial Literacy. Open Education Studies, 6(1). https://doi.org/10.1515/edu-2022-0222
Prodjo, W. A. (2023, June 30). Wali Kota Ab-dullah Abu Bakar Sebut Potensi UMKM di Kediri Cukup Besar . KOMPAS.Com. https://umkm.kompas.com/read/2023/01/30/190000683/wali-kota-abdullah-abu-bakar-sebut-potensi-umkm-di-kediri-cukup-besar
Rahadjeng, E. R., Pratikto, H., Mukhlis, I., Restuningdiah, N., & Mala, I. K. (2023). The impact of financial literacy, financial technology, and financial inclusion on SME business performance in Malang Raya, Indonesia. Journal of Social Econom-ics Research, 10(4), 146–160. https://doi.org/10.18488/35.v10i4.3509
Rapina, R., Meythi, M., Rahmatika, D. N., & Mardiana, M. (2023). The impact of fi-nancial literacy and financial behavior in entrepreneurial motivation – evidence from Indonesia. Cogent Education, 10(2). https://doi.org/10.1080/2331186X.2023.2282827
Rizvi, S. K. A., Rahat, B., Naqvi, B., & Umar, M. (2024). Revolutionizing finance: The synergy of fintech, digital adoption, and innovation. Technological Forecasting and Social Change, 200, 123112. https://doi.org/10.1016/j.techfore.2023.123112
Rodriguez, J. M., Labong, D. C., & Palallos, L. (2024). The Mediation of Financial Behav-ior to Financial Literacy and Spending Habits of Gen Z: An Exploratory Factor Analysis. Journal of Global Awareness, 5(2), 1–21. https://doi.org/10.24073/jga/5/02/05
Rohaeni, N., Meutia, Indriana, I., & Januarsi, Y. (2025). Digital Financial Literacy and Technology Adoption for Strengthening Financial Inclusion and MSMEs’ Perfor-mance in Banten, Indonesia. Salud, Cien-cia y Tecnología, 5, 2227. https://doi.org/10.56294/saludcyt20252227
Ruiz, E. D., Gómez, J. F. S., & Rivera, M. de J. V. (2024). Financial Planning and Deci-sion Making as Predictors of Financial Performance in MSMEs. International Journal of Professional Business Review, 9(3). https://doi.org/10.26668/businessreview/2024.v9i3.4431
Samanta, D. P. S., Patnaik, B. C. M., & Satpa-thy, I. (2024). Perception of Confidentiali-ty in Fintech Usage Among Religious Tourism Entrepreneurs of Puri. Interna-tional Journal of Religious Tourism and Pil-grimage, 12(3), 62–71. https://doi.org/10.21427/web1-f461
Setiawati, S., Gursida, H., & Indrayono, Y. (2025). MSME Financial Literacy Model as a Measuring Tool for MSME Financial Performance. Journal of Entrepreneurship, 48–68. https://doi.org/10.56943/joe.v4i1.710
Seva, J. (2025). Transforming The Indian Economy: The Critical Role of MSMEs. International Journal For Multidisciplinary Research, 7(3). https://doi.org/10.36948/ijfmr.2025.v07i03.43963
Shrivastava, G., & Sahu, S. (2025). Unleashing The Potential of MSMES: Contribution to India’s Economic Expansion. Recent Trends and Innovation in Commerce and Economics, 439–456. https://doi.org/10.51767/ic250128
Singh, N., & Gupta, O. P. (2023). Growth of Micro, Small and Medium Enterprises (MSMEs) in India and its Role in Indian Economy. International Journal For Multi-disciplinary Research, 5(4). https://doi.org/10.36948/ijfmr.2023.v05i04.4590
Šlogar, H., Morić Milovanović, B., & Hrvatin, S. (2023). Does the Relationship between Entrepreneurial Orientation and Subjec-tive Financial Firm Performance Have an Inverted U-Shape? Evidence from South-east European SMEs. Administrative Sci-ences, 13(2), 26. https://doi.org/10.3390/admsci13020026
Suder, M., Kusa, R., Duda, J., & Karpacz, J. (2025). Exploring impact of entrepreneur-ial orientation on firm performance – moderators’ variability under changing market conditions. Review of Managerial Science, 19(3), 797–842. https://doi.org/10.1007/s11846-024-00775-9
Sungthong, S., Aujirapongpan, S., & Meesook, K. (2023). Exploring the Relationship Be-tween Entrepreneurial Orientation, Inno-vation and Financial Performance: The Mediating Role of Absorptive Capacity and Technological Innovation Capability. ABAC Journal, 43(4), 258–275. https://doi.org/10.59865/abacj.2023.49
Wales, W. J. (2019). Entrepreneurial orienta-tion: International, global and cross-cultural research. International Small Busi-ness Journal: Researching Entrepreneurship, 37(2), 95–104. https://doi.org/10.1177/0266242618813423
Wales. (2016). Entrepreneurial orientation: A review and synthesis of promising re-search directions. International Small Busi-ness Journal: Researching Entrepreneurship, 34(1), 3–15. https://doi.org/10.1177/0266242615613840
Wales, W. J., Covin, J. G., & Monsen, E. (2020). Entrepreneurial orientation: The necessi-ty of a multilevel conceptualization. Stra-tegic Entrepreneurship Journal, 14(4), 639–660. https://doi.org/10.1002/sej.1344
Waqar, M., Riaz, A., Ali, F. H., Baig, J., & Cai, Z. (2026). Bridging innovation and sus-tainability: The impact of entrepreneurial practices on ESG outcomes. Journal of In-novation & Knowledge, 15, 101005. https://doi.org/10.1016/j.jik.2026.101005
Xie, J., Ye, L., Huang, W., & Ye, M. (2021). Understanding FinTech Platform Adop-tion: Impacts of Perceived Value and Per-ceived Risk. Journal of Theoretical and Ap-plied Electronic Commerce Research, 16(5), 1893–1911. https://doi.org/10.3390/jtaer16050106
Xu, S., & Jiang, K. (2024). Knowledge creates value: the role of financial literacy in en-trepreneurial behavior. Humanities and Social Sciences Communications, 11(1), 679. https://doi.org/10.1057/s41599-024-03201-3
Yuliani, Y., Zunaidah, Z., & Taufik, T. (2025). Access to Finance: A Potent Force? Inves-tigating Financial Literacy and Perfor-mance in Enterprises of Palembang City, South Sumatra, Indonesia. WSEAS Trans-actions on Business and Economics, 22, 366–377. https://doi.org/10.37394/23207.2025.22.35
Zhao, J., Ibrahim, H., Wang, C., & Yuan, R. (2024). Investigating the temporal and spatial evolution of bank performance and its impact pathways in the context of financial technology development. Heli-yon, 10(10), e30585. https://doi.org/10.1016/j.heliyon.2024.e30585
Downloads
Published
Issue
Section
License
All submitted article manuscripts must go through all review stages for the journal Jurnal Ilmu Ekonomi dan Bisnis Islam to accept and publish them. By submitting the manuscript, authors agree to the following terms:
- The authors guarantee that the article is original and has not been previously published. The article does not contain illegal statements and does not infringe upon the rights of others. The authors affirm that the article is entirely their own copyright. If there are quotations or references from other sources, authors must obtain written permission and ensure that the quotations are free from third-party rights.
- Authors retain the copyright to their work and grant the first publication rights to the Jurnal Ilmu Ekonomi dan Bisnis Islam under the Creative Commons Attribution-NonCommercial License 4.0 International (CC BY-NC 4.0). This license allows others to share the work while attributing the authorship and initial publication to this journal. However, commercial use of the work is not permitted.
- Authors are permitted to make additional contractual arrangements for non-exclusive distribution of the published journal version. For example, they may submit the article to an institutional repository or publish it in a book, with acknowledgement of the initial publication in this journal.
- Authors are allowed and encouraged to post their work online before and during the submission process. This is considered to promote productive exchange and early and broader citation of published work (see the Influence of Open Access).
All articles in the Jurnal Ilmu Ekonomi dan Bisnis Islam are licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.
2.png){kind=logo}
