MSMES’ Digital Competence and Financial Literacy Analysis in East Java, Indonesia

Abstract

MSMEs play critical role for Indonesian economy as they make up 99.99% of national business. However, in the current digital era, their digital skills and financial literacy are restricted. This paper's primary objective is to investigate the financial literacy and digital competency of Indonesian MSMEs, specifically in the province of East Java, through the application of a SWOT (strengths, weaknesses, opportunities, and challenges) analysis. The province of East Java's 507 MSMEs that have embraced digitization and are spread across 38 districts/cities (kabupaten/kota) provided survey data for this study. The characteristics of MSMEs, as outlined in four SWOT spectrums, highlight the benefits and drawbacks for MSMEs in East Java with regard to their digital competency and financial literacy. Based on the results of the analysis, 15 strategies can be a reference for stakeholders in improving the digital competence and financial literacy of MSMEs.