Determinants of Financial Behavior Influenced by Financial Technology and Financial Literacy of MSME Actors in Jakarta (Mediastima)

Summary

• The study surveyed a sample of 70 MSME respondents in Jakarta to evaluate the impact of fintech and financial literacy on financial behavior.p.1
• MSMEs contribute over > 60% of Indonesia's GDP and absorb 97% of the national workforce.p.2
• Financial technology (fintech) utilization alone accounts for 27.25% of the variance in MSME financial behavior.p.1
• Financial literacy accounts for 22.37% of the variance in the financial behavior of MSME proprietors.p.1
• Combined, financial technology and financial literacy explain 46.3% of the financial behavior among MSME owners.p.1
• Among the surveyed MSME owners, GoPay is the most used e-wallet at 39%, followed by ShopeePay at 33% and OVO at 29%.p.8
• Warung Makan constitutes the largest group of surveyed businesses at 50%, followed by Restoran at 27% and Kaki Lima at 23%.p.8

Key insights

1. Financial technology has a positive and significant direct effect on financial behavior with a path coefficient of 0.522.p.12
2. Financial literacy exerts a positive and significant impact on financial behavior with a path coefficient of 0.473.p.12
3. Together, fintech and financial literacy achieve an R-Square value of 0.463 in explaining financial behavior.p.12
4. Male proprietors dominate the surveyed MSME population in Jakarta, representing 61% (43 respondents) compared to 39% female proprietors (27 respondents).p.7
5. Half of the surveyed MSME proprietors (50%) completed senior high school (SMA) as their highest level of education.p.8
6. Business asset holdings of Rp. 2.000.000 – Rp. 5.000.000 are reported by 49% of MSME respondents.p.9
7. A majority of 51% of surveyed MSMEs operate with a small staff size of 1-2 employees.p.9