Digital Financial Literacy and Financial Inclusion as Determinants of MSME Financial Resilience in the Service Sector: Perceived Financial Risk as Moderator

Abstract

Economic volatility and post-pandemic inflationary shifts require Micro, Small, and Medium Enterprises (MSMEs) in the service sector to develop robust financial resilience to prevent liquidity crunches and business failure. While financial technology (fintech) provides broader capital access, its operational success depends heavily on entrepreneurs’ digital competencies and risk perceptions. This study investigates the impact of digital financial literacy and financial inclusion on MSME financial resilience in the service sector, while assessing the moderating role of perceived financial risk. A causal quantitative survey was conducted among 170 service entrepreneurs (automotive repair, beauty salons, printing services, catering, and local logistics) in Manado. The empirical data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. The findings confirm that digital financial literacy (β = 0.412, p < 0.001) and financial inclusion (β = 0.328, p < 0.001) significantly enhance financial resilience. Moreover, perceived financial risk acts as a significant negative moderator on the relationship between digital financial literacy and financial resilience (β = -0.165, p = 0.006). This implies that heightened anxieties over financial cyber fraud and predatory online lending attenuate the positive contribution of digital literacy toward building enterprise resilience. The model explains 56.4% of the variance in financial resilience (R² = 0.564). Strategic implications emphasize the necessity of targeted cybersecurity literacy training and emergency cash flow governance for service entrepreneurs.