This study investigates the mediating roles of financial literacy and financial inclusion in the relationship between fintech and MSME financial performance in Denpasar City. Employing a quantitative associative design, the research utilized an online questionnaire to collect data from 130 MSMEs using fintech services, selected through snowball sampling. Data analysis was performed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS version 3. The results indicate that while fintech does not directly and significantly impact MSME financial performance, it significantly and positively influences both financial literacy and financial inclusion. Crucially, financial literacy was found to have a positive and significant effect on MSME financial performance, and it significantly mediated the relationship between fintech and MSME financial performance. Conversely, financial inclusion did not have a significant effect on MSME financial performance, nor did it significantly mediate this relationship. These findings highlight the critical importance of enhancing financial literacy among MSMEs to maximize the benefits of fintech adoption and improve their financial performance.
Damayanti et al. (2025) studied this question.