Small and medium enterprises (SMEs) are central to the global economy, yet they are constrained by uneven digital capability and financing frictions. This study examines financial inclusion’s (FI) effect on SMEs’ economic sustainability (ECOS) and social sustainability (SOCS) in the digital economy. It also investigates the mediating role of dynamic coordinating capability (DCC) and digital readiness’ (DR) moderating effect. Using survey data from 417 Malaysian SMEs, we apply a sequential analytics design: Partial Least Squares Structural Equation Modelling to test sufficiency (direct, mediation, moderation), followed by Necessary Condition Analysis and Importance-Performance Map Analysis to identify bottlenecks and managerial priorities. Results show that FI is not a sufficient predictor of ECOS but positively affects SOCS and strongly predicts DCC. DCC positively affects both ECOS and SOCS, and equally mediates FI’s effects on ECOS and SOCS. DR amplifies the DCC→ECOS link but not DCC→SOCS. NCA indicates DCC is a necessary condition for high ECOS, while FI and DCC are necessary for high SOCS. These findings reveal that access to finance is an enabling input whose sustainability payoff depends on coordination routines, with DR acting as a selective economic amplifier. Practically, SMEs should prioritise cross-unit coordination routines to translate finance into cost control, market strengthening, and profitability, while leveraging FI to bolster SOCS fundamentals. Policymakers should adopt the proposed Inclusion-Coordination-Readiness (ICR) policy framework, which recommends avoiding “credit-only” interventions and instead bundle finance with capability-building and targeted DR support, aligning SME initiatives that bolster Sustainable Development Goals.
Irikefe et al. (Fri,) studied this question.