DETERMINANTS OF FINANCIAL INCLUSION IN MSMEs: THE ROLE OF TECHNOLOGY, LITERACY, AND FINANCIAL VULNERABILITY

Abstract

This study aims to analyze the effect of electronic payment usage, fintech adoption, financial innovation, financial literacy, and financial vulnerability on financial inclusion among Micro, Small, and Medium Enterprises (MSMEs). The research method employed is quantitative using primary data collected from 100 MSME actors selected through purposive sampling technique. Data analysis was conducted using Multiple Linear Regression with SPSS 27 software. The results indicate that simultaneously, the five independent variables significantly affect financial inclusion with a contribution (R Square) of 75.1%. Partially, fintech adoption, financial innovation, financial literacy, and financial vulnerability have a positive and significant effect on financial inclusion . An interesting finding in this study is that electronic payment usage shows a negative coefficient on financial inclusion. This suggests that while technology is being adopted, certain factors within the electronic payment mechanism may not yet be optimal in driving broader financial inclusion.This study examines the effects of electronic payment usage, fintech adoption, financial innovation, financial literacy, and financial vulnerability on financial inclusion among Micro, Small, and Medium Enterprises (MSMEs). Using a quantitative approach, primary data were collected from 100 MSMEs through purposive sampling and analyzed with Multiple Linear Regression (SPSS 27). The results show that all variables simultaneously influence financial inclusion (R² = 75.1%). Partially, fintech adoption, financial innovation, financial literacy, and financial vulnerability have positive and significant effects. However, electronic payment usage shows a negative coefficient, indicating potential limitations in its effectiveness in promoting broader financial inclusion.