FINTECH ADOPTION FOR MSMES SUSTAINABILITY
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Abstract
During the COVID-19 pandemic, SMEs in Indonesia faced serious challenges due to temporary or permanent business closures as a result of the SMEs policy and the resulting economic crisis. Decreased sales and difficulties in securing funding have been the main problems faced by SMEs. To overcome these challenges, the use of Financial Technology (Fintech) is emerging as a promising solution. Fintech Lending Service provides an opportunity for MSMEs to obtain much-needed funding loans, while Fintech Digital Payment System provides an alternative transaction method that is more efficient. The study purposes is to aiming to examine the relationship between the adoption of Fintech Lending Service and Fintech Digital Payment System with MSME performance.This study uses the Diffusion of Innovation theory approach and PLS-SEM data analysis method, the source of data is from questionaire and collected 204 data from the population. The results of the study are expected to provide valuable insights into how financial technology can support the viability of SMEs amid economic uncertainty. The novelty of this research is combining the separate fintech digital payment and lending service research into one research.
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References
Abdullah, Y. A., & Bin Mansor, M. N. (2018). The moderating effect of business environment on the relationship between Entrepreneurial Skills and Small Business performance in Iraq. Journal of Legal, Ethical and Regulatory Issues, 22(Specialissue), 1–11.
Agus Zainul Arifin, R. D. (2020). Strategic Orientation on Performance: The Resource Based View Theory Approach. Jurnal Akuntansi, 24(1), 131. https://doi.org/10.24912/ja.v24i1.661
Ahmad, M., Bashir, R., & Waqas, H. (2022). Working capital management and firm performance : are their effects same in covid 19 compared to financial crisis 2008 ? Working capital management and firm performance : are their effects same in covid 19 compared to financial crisis 2008 ? Cogent Economics & Finance, 10(1). https://doi.org/10.1080/23322039.2022.2101224
Al-Okaily, M., Lutfi, A., Alsaad, A., Taamneh, A., & Alsyouf, A. (2020). The Determinants of Digital Payment Systems’ Acceptance under Cultural Orientation Differences: The Case of Uncertainty Avoidance. Technology in Society, 63(September). https://doi.org/10.1016/j.techsoc.2020.101367
Alvin, T., & Arifin, A. Z. (2023). Pengaruh inovasi pengguna dan dukungan pemerintah terhadap niat UMKM mengadopsi teknologi keuangan. Jurnal Manajemen Bisnis Dan Kewirausahaan, 7(3), 549–558. https://doi.org/10.24912/jmbk.v7i3.23867
Au, C. H., Tan, B., & Sun, Y. (2020). Developing a P2P lending platform: stages, strategies and platform configurations. Internet Research, 30(4), 1229–1249. https://doi.org/10.1108/INTR-03-2019-0099
Aulyarizki Miahendita. (2020). The Effect of Fintech Peer-to-Peer (P2P) Lending on MSMEs Performance in Indonesia. Bulletin of Fintech and Digital Economy, 1–17.
Barroso, M., & Laborda, J. (2022). Digital transformation and the emergence of the Fintech sector: Systematic literature review. Digital Business, 2(2), 100028. https://doi.org/10.1016/j.digbus.2022.100028
Daud, I., Nurjannah, D., Mohyi, A., Ambarwati, T., Cahyono, Y., Haryoko, A. D. E., Handoko, A. L., Putra, R. S., Wijoyo, H., Ari-Yanto, A., & Jihadi, M. (2022). The effect of digital marketing, digital finance and digital payment on finance performance of indonesian smes. International Journal of Data and Network Science, 6(1), 37–44. https://doi.org/10.5267/J.IJDNS.2021.10.006
Dessler, G. (2012). Human Resource Management. In The SAGE Glossary of the Social and Behavioral Sciences (13th ed.). Pearson Education. https://doi.org/10.4135/9781412972024.n1221
Forth, J., & Bryson, A. (2019). Management practices and SME performance. Scottish Journal of Political Economy, 66. https://doi.org/10.1111/sjpe.12209
Gold, N. O., & Md. Taib, F. (2020). Impact of Corporate Sustainability Reporting Practice on Corporate Performance: a Review of Literature. International Journal of Industrial Management, 8(December 2020), 19–34. https://doi.org/10.15282/ijim.8.0.2020.5760
Gupta, A., & Xia, C. (2018). A Paradigm Shift in Banking: Unfolding Asia’s FinTech Adventures (pp. 215–254). https://doi.org/10.1108/S1571-038620180000025010
Hair, J. F., Black, Jr, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate Data Analysis. In Pearson New International Edition.
Huang, R. H. (2018). Online P2P Lending and Regulatory Responses in China: Opportunities and Challenges. European Business Organization Law Review, 19(1), 63–92. https://doi.org/10.1007/s40804-018-0100-z
Iskandar. (2022). UMKM Wajib Masuk Ekosistem Digital, Ini Alasannya. Liputan6. https://www.liputan6.com/tekno/read/5121792/umkm-wajib-masuk-ekosistem-digital-ini-alasannya
Kilay, A. L., Simamora, B. H., & Putra, D. P. (2022). The Influence of E-Payment and E-Commerce Services on Supply Chain Performance: Implications of Open Innovation and Solutions for the Digitalization of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(3). https://doi.org/10.3390/joitmc8030119
Königstorfer, F., & Thalmann, S. (2020). Applications of Artificial Intelligence in commercial banks – A research agenda for behavioral finance. Journal of Behavioral and Experimental Finance, 27, 100352. https://doi.org/10.1016/j.jbef.2020.100352
Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(1), 35–46. https://doi.org/10.1016/j.bushor.2017.09.003
Maiti, M., & Ghosh, U. (2023). Next-Generation Internet of Things in Fintech Ecosystem. IEEE Internet of Things Journal, 10(3), 2104–2111. https://doi.org/10.1109/JIOT.2021.3063494
Purba, M. I., Simanjutak, D. C. Y., Malau, Y. N., Sholihat, W., & Ahmadi, E. A. (2021). The effect of digital marketing and e-commerce on financial performance and business sustainability of MSMEs during COVID-19 pandemic in Indonesia. International Journal of Data and Network Science, 5(3), 275–282. https://doi.org/10.5267/j.ijdns.2021.6.006
Rita, M. R., Nugrahanti, Y. W., & Kristanto, A. B. (2021). Peer-To-Peer Lending, Financial Bootstrapping and Government Support: the Role of Innovation Mediation on Msme Performance. Economic Horizons, 23(3), 247–261. https://doi.org/10.5937/ekonhor2103259R
Rogers, E. M., Singhal, A., & Quinlan, M. M. (2014). Diffusion of innovations. In An integrated approach to communication theory and research (pp. 432–448). Routledge.
Santia, T. (2022). 20 Persen UMKM Bangkrut di 2021, Sebagian Mampu Bangkit. https://www.liputan6.com/bisnis/read/4895832/20-persen-umkm-bangkrut-di-2021-sebagian-mampu-bangkit
Sunardi, R., Suhud, U., Purwana, D., & Hamidah, H. (2021). Examining the Factors Contributing to Fintech Peer-to-peer Lending Adoption. Journal of Information Systems Engineering and Business Intelligence, 7(2), 91. https://doi.org/10.20473/jisebi.7.2.91-101
Tang, Y. M., Chau, K. Y., Hong, L., Ip, Y. K., & Yan, W. (2021). Financial innovation in digital payment with wechat towards electronic business success. Journal of Theoretical and Applied Electronic Commerce Research, 16(5), 1844–1861. https://doi.org/10.3390/jtaer16050103
Wang, J., Xu, H., & Ma, J. (2015). Financing the Underfinanced: Online Lending in China. https://doi.org/10.1007/978-3-662-46525-7
Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks? —An analysis based on big data. Research in International Business and Finance, 55, 101338. https://doi.org/10.1016/j.ribaf.2020.101338
Abdullah, Y. A., & Bin Mansor, M. N. (2018). The moderating effect of business environment on the relationship between Entrepreneurial Skills and Small Business performance in Iraq. Journal of Legal, Ethical and Regulatory Issues, 22(Specialissue), 1–11.
Agus Zainul Arifin, R. D. (2020). Strategic Orientation on Performance: The Resource Based View Theory Approach. Jurnal Akuntansi, 24(1), 131. https://doi.org/10.24912/ja.v24i1.661
Ahmad, M., Bashir, R., & Waqas, H. (2022). Working capital management and firm performance : are their effects same in covid 19 compared to financial crisis 2008 ? Working capital management and firm performance : are their effects same in covid 19 compared to financial crisis 2008 ? Cogent Economics & Finance, 10(1). https://doi.org/10.1080/23322039.2022.2101224
Al-Okaily, M., Lutfi, A., Alsaad, A., Taamneh, A., & Alsyouf, A. (2020). The Determinants of Digital Payment Systems’ Acceptance under Cultural Orientation Differences: The Case of Uncertainty Avoidance. Technology in Society, 63(September). https://doi.org/10.1016/j.techsoc.2020.101367
Alvin, T., & Arifin, A. Z. (2023). Pengaruh inovasi pengguna dan dukungan pemerintah terhadap niat UMKM mengadopsi teknologi keuangan. Jurnal Manajemen Bisnis Dan Kewirausahaan, 7(3), 549–558. https://doi.org/10.24912/jmbk.v7i3.23867
Au, C. H., Tan, B., & Sun, Y. (2020). Developing a P2P lending platform: stages, strategies and platform configurations. Internet Research, 30(4), 1229–1249. https://doi.org/10.1108/INTR-03-2019-0099
Aulyarizki Miahendita. (2020). The Effect of Fintech Peer-to-Peer (P2P) Lending on MSMEs Performance in Indonesia. Bulletin of Fintech and Digital Economy, 1–17.
Barroso, M., & Laborda, J. (2022). Digital transformation and the emergence of the Fintech sector: Systematic literature review. Digital Business, 2(2), 100028. https://doi.org/10.1016/j.digbus.2022.100028
Daud, I., Nurjannah, D., Mohyi, A., Ambarwati, T., Cahyono, Y., Haryoko, A. D. E., Handoko, A. L., Putra, R. S., Wijoyo, H., Ari-Yanto, A., & Jihadi, M. (2022). The effect of digital marketing, digital finance and digital payment on finance performance of indonesian smes. International Journal of Data and Network Science, 6(1), 37–44. https://doi.org/10.5267/J.IJDNS.2021.10.006
Dessler, G. (2012). Human Resource Management. In The SAGE Glossary of the Social and Behavioral Sciences (13th ed.). Pearson Education. https://doi.org/10.4135/9781412972024.n1221
Forth, J., & Bryson, A. (2019). Management practices and SME performance. Scottish Journal of Political Economy, 66. https://doi.org/10.1111/sjpe.12209
Gold, N. O., & Md. Taib, F. (2020). Impact of Corporate Sustainability Reporting Practice on Corporate Performance: a Review of Literature. International Journal of Industrial Management, 8(December 2020), 19–34. https://doi.org/10.15282/ijim.8.0.2020.5760
Gupta, A., & Xia, C. (2018). A Paradigm Shift in Banking: Unfolding Asia’s FinTech Adventures (pp. 215–254). https://doi.org/10.1108/S1571-038620180000025010
Hair, J. F., Black, Jr, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate Data Analysis. In Pearson New International Edition.
Huang, R. H. (2018). Online P2P Lending and Regulatory Responses in China: Opportunities and Challenges. European Business Organization Law Review, 19(1), 63–92. https://doi.org/10.1007/s40804-018-0100-z
Iskandar. (2022). UMKM Wajib Masuk Ekosistem Digital, Ini Alasannya. Liputan6. https://www.liputan6.com/tekno/read/5121792/umkm-wajib-masuk-ekosistem-digital-ini-alasannya
Kilay, A. L., Simamora, B. H., & Putra, D. P. (2022). The Influence of E-Payment and E-Commerce Services on Supply Chain Performance: Implications of Open Innovation and Solutions for the Digitalization of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(3). https://doi.org/10.3390/joitmc8030119
Königstorfer, F., & Thalmann, S. (2020). Applications of Artificial Intelligence in commercial banks – A research agenda for behavioral finance. Journal of Behavioral and Experimental Finance, 27, 100352. https://doi.org/10.1016/j.jbef.2020.100352
Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(1), 35–46. https://doi.org/10.1016/j.bushor.2017.09.003
Maiti, M., & Ghosh, U. (2023). Next-Generation Internet of Things in Fintech Ecosystem. IEEE Internet of Things Journal, 10(3), 2104–2111. https://doi.org/10.1109/JIOT.2021.3063494
Purba, M. I., Simanjutak, D. C. Y., Malau, Y. N., Sholihat, W., & Ahmadi, E. A. (2021). The effect of digital marketing and e-commerce on financial performance and business sustainability of MSMEs during COVID-19 pandemic in Indonesia. International Journal of Data and Network Science, 5(3), 275–282. https://doi.org/10.5267/j.ijdns.2021.6.006
Rita, M. R., Nugrahanti, Y. W., & Kristanto, A. B. (2021). Peer-To-Peer Lending, Financial Bootstrapping and Government Support: the Role of Innovation Mediation on Msme Performance. Economic Horizons, 23(3), 247–261. https://doi.org/10.5937/ekonhor2103259R
Rogers, E. M., Singhal, A., & Quinlan, M. M. (2014). Diffusion of innovations. In An integrated approach to communication theory and research (pp. 432–448). Routledge.
Santia, T. (2022). 20 Persen UMKM Bangkrut di 2021, Sebagian Mampu Bangkit. https://www.liputan6.com/bisnis/read/4895832/20-persen-umkm-bangkrut-di-2021-sebagian-mampu-bangkit
Sunardi, R., Suhud, U., Purwana, D., & Hamidah, H. (2021). Examining the Factors Contributing to Fintech Peer-to-peer Lending Adoption. Journal of Information Systems Engineering and Business Intelligence, 7(2), 91. https://doi.org/10.20473/jisebi.7.2.91-101
Tang, Y. M., Chau, K. Y., Hong, L., Ip, Y. K., & Yan, W. (2021). Financial innovation in digital payment with wechat towards electronic business success. Journal of Theoretical and Applied Electronic Commerce Research, 16(5), 1844–1861. https://doi.org/10.3390/jtaer16050103
Wang, J., Xu, H., & Ma, J. (2015). Financing the Underfinanced: Online Lending in China. https://doi.org/10.1007/978-3-662-46525-7
Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks? —An analysis based on big data. Research in International Business and Finance, 55, 101338. https://doi.org/10.1016/j.ribaf.2020.101338