THE EFFECT OF FINTECH ADOPTION AND FINANCIAL LITERACY ON MSME SUSTAINABILITY PERFORMANCE: MEDIATED BY ACCESS TO FINANCE IN INDONESIA FINAL PROJECT By Mazida Faza Khalisha 19021148 Undergraduate Program School of Business and Management Institut Teknologi Bandung 2024 i This page is intentionally left blank. ii THE EFFECT OF FINTECH ADOPTION AND FINANCIAL LITERACY ON MSME SUSTAINABILITY PERFORMANCE: MEDIATED BY ACCESS TO FINANCE IN INDONESIA Mazida Faza Khalisha ID No: 19021148 Bachelor of Management School of Business and Management Institut Teknologi Bandung Supervisor: Taufik Faturohman, Ph.D ABSTRACT The Indonesian government already recognizes micro, small, and medium enterprises (MSME's) as crucial elements in achieving the 2045 goal of becoming a high-income country through sustainable development, encompassing environmental, economic, and social aspects. However, previous research in Indonesia has not adequately identified how financial technology adoption and financial literacy have an effect on MSME sustainability performance, nor has it explored how access to finance can mediate the effect of financial technology adoption and financial literacy on MSME sustainability performance. The research aims to examine the effects of financial technology adoption, financial literacy, and access to finance on MSME sustainability in terms of environment, economic, and social performance, as well as the significance of the mediation variable of access to finance in addressing the gap. The research employs a quantitative approach, using an online survey questionnaire with 279 Indonesian MSME respondents. This research measured the respondents' responses to each item or statement using a seven-point Likert scale. Then, the effect on the variables is analyzed using partial least squares structural equation modeling. The research reveals that financial technology adoption and financial literacy have a significant effect on access to finance. Further, financial technology adoption and access to finance have a significant effect on MSME sustainability performance, particularly in relation to environmental, economic, and social aspects. However, financial literacy has an insignificant effect on three aspects of MSME sustainability performance. On top of that, the findings indicate that access to finance mediates the effect of financial technology adoption and financial literacy on MSME sustainability performance in environmental, economic, and social aspects. Therefore, the research findings may be helpful in raising awareness among regulatory authorities and MSME about the importance of financial technology adoption, financial literacy, and access to finance in achieving MSME sustainability performance. Keywords: Financial Technology Adoption, Financial Literacy, Access to Finance, Sustainability Performance, Micro Small and Medium Enterprises (MSMEs) iii This page is intentionally left blank. iv PENGARUH ADOPSI TEKNOLOGI KEUANGAN DAN LITERASI KEUANGAN TERHADAP KINERJA KEBERLANJUTAN UMKM: MEDIASI OLEH AKSES KEUANGAN DI INDONESIA Mazida Faza Khalisha ID No: 19021148 Sarjana Manajemen Sekolah Bisnis dan Manajemen Institut Teknologi Bandung Pembimbing: Taufik Faturohman, Ph.D ABSTRAK Pemerintah Indonesia telah menyadari bahwa usaha mikro, kecil, dan menengah (UMKM) merupakan elemen penting dalam mencapai tujuan 2045 menjadi negara berpenghasilan tinggi melalui pembangunan berkelanjutan yang mencakup aspek lingkungan, ekonomi, dan sosial. Namun, penelitian sebelumnya di Indonesia belum secara memadai mengidentifikasi bagaimana adopsi teknologi keuangan dan literasi keuangan berpengaruh terhadap kinerja keberlanjutan UMKM, serta peran akses terhadap keuangan sebagai mediator hubungan tersebut. Penelitian ini bertujuan untuk mengkaji pengaruh adopsi teknologi keuangan, literasi keuangan, dan akses keuangan terhadap keberlanjutan UMKM, yang ditinjau dari kinerja lingkungan, ekonomi, dan sosial, serta signifikansi peran mediasi akses keuangan. Penelitian ini menggunakan pendekatan kuantitatif dengan melibatkan 279 responden UMKM Indonesia melalui kuesioner survei online. Penelitian ini mengukur respon dari responden terhadap setiap item atau pernyataan dengan menggunakan skala Likert tujuh poin. Kemudian, pengaruh terhadap variabel-variabel tersebut dianalisis dengan menggunakan PLS-SEM. Hasil penelitian menunjukan bahwa adopsi teknologi keuangan dan literasi keuangan berpengaruh signifikan terhadap akses keuangan.