Peran Literasi Keuangan Dan Inklusi Keuangan Terhadap Pertumbuhan Usaha Mikro Dan Kecil Di Kabupaten Ngawi

Abstract

This study aims to analyze the role of financial literacy and financial inclusion in the growth of Micro and Small Enterprises (MSEs) in Ngawi Regency, East Java. The primary focus of this research is to evaluate how the accessibility of financial services and the financial knowledge capacity of entrepreneurs drive the escalation of their business scale. Using a quantitative approach, data were collected through questionnaires distributed to 307 MSE entrepreneurs who are customers of Microfinance Institutions (MFIs) employing the Grameen Bank business model. Data analysis was performed using Structural Equation Modeling (SEM) based on Partial Least Square (PLS). The results indicate that financial inclusion has a positive and significant effect on MSE growth, confirming that access to capital is a major driver of business liquidity. Conversely, financial literacy shows a positive but insignificant effect, indicating a gap between theoretical understanding and managerial implementation in the field. Another interesting finding reveals a "Fintech Paradox," where financial technology is found to weaken the influence of financial decisions on business growth due to impulsive consumption behavior. This study concludes that massive financial inclusion must be accompanied by the strengthening of digital literacy to ensure sustainable MSE growth. It is recommended that the government and MFIs integrate digital education programs into capital distribution schemes to mitigate the risk of misusing productive funds.