Empowering women entrepreneurs: the role of financial literacy, inclusion, and access in enhancing MSE’s performance and sustainability via women development program in Indonesia

Financial inclusion is critical to supporting women’s entrepreneurial endeavors in today’s changing financial landscape. Despite representing the majority of micro and small businesses (SMEs) in Indonesia, women entrepreneurs continue to confront challenges to their development and sustainability. Supply-side discrimination, low financial literacy, restricted access to formal institutions, and a low demand for capital all hinder their ability to obtain finance, which is frequently biased against male entrepreneurs. This study looks at how financial literacy, financial inclusion, and financial access affect entrepreneurial development, firm performance, and sustainability among Indonesian women entrepreneurs. Five hundred forty-two responses were collected from women entrepreneurs during June–July 2024 and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that financial inclusion (β = 0.524) and financial literacy (β = 0.296) significantly improve financial access, which positively affects women’s entrepreneurial development (β = 0.484) and business performance (β = 0.383). Women’s entrepreneurial development also contributes to performance (β = 0.364), strongly affecting business sustainability (β = 0.502). Notably, the model explains 55.8% of the variance in women-owned SMEs’ business sustainability (R2 = 0.558), the highest among all endogenous constructs. This study enhances existing knowledge by emphasizing the interrelated roles of financial literacy, inclusion, and access in shaping women’s entrepreneurial ecosystems. This highlights the necessity for specific policies and initiatives aimed at tackling structural obstacles and gender inequalities in the financial sector. Enhancing these components can enable women entrepreneurs, improve SME performance, and foster sustainable, inclusive economic growth in Indonesia.