Digital Financial Literacy and Its Influence on Investment Decision-Making among SMEs

Authors

  • Andiena Nindya Putri Institut Teknologi Dan Bisnis STIKOM, Bali, Indonesia
  • Putu Saroyini Piatrini Universitas Udayana, Bandung, Indonesia

DOI:

https://doi.org/10.38035/gijea.v4i4.975

Keywords:

Digital Financial Literacy, Financial Behavior, Investment Decision-Making, SMEs, PLS-SEM

Abstract

This study examines the influence of digital financial literacy on investment decision-making among small and medium enterprises (SMEs) in Bali, with financial behavior acting as a mediating variable. The increasing adoption of digital financial services among SMEs highlights the importance of financial literacy in supporting effective business investment decisions. This research aims to analyze the direct and indirect relationships between digital financial literacy, financial behavior, and investment decision-making. The study employed a quantitative approach using a survey method. Data were collected from 98 SME owners and managers in Bali who actively use digital financial services such as mobile banking, QRIS, e-wallets, and online payment platforms. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) through SmartPLS. The results indicate that digital financial literacy has a positive effect on financial behavior and investment decision-making. Financial behavior also positively influences investment decision-making and partially mediates the relationship between digital financial literacy and investment decision-making. The findings suggest that SMEs with higher levels of digital financial literacy tend to demonstrate better financial behavior, which contributes to more effective and rational investment decisions. This study contributes to the literature on digital finance and SME development by emphasizing the importance of improving digital financial literacy to strengthen investment capability and business sustainability among SMEs in Bali.

References

Abdul kareem, A. A., Fayed, Z. T., Rady, S., Amin El-Regaily, S., & Nema, B. M. (2023). Factors Influencing Investment Decisions in Financial Investment Companies. Systems, 11(3), 146. https://doi.org/10.3390/systems11030146

Abreu, M., Mendes, V., & Coutinho dos Santos, M. (2025). Financial Literacy, Financial Resilience and Participation in Securities Markets: Evidence from Portugal. Journal of Risk and Financial Management, 18(12), 677. https://doi.org/10.3390/jrfm18120677

Aristei, D., & Gallo, M. (2021). Financial Knowledge, Confidence, and Sustainable Financial Behavior. Sustainability, 13(19), 10926. https://doi.org/10.3390/su131910926

Azis, F., Tahir, T., S, M., Azis, M., & Hasan, M. (2025). Entrepreneurial Literacy and Financial Behavior Among Indonesian Mompreneurs: Insights from a Knowledge-Based Innovation Perspective. Journal of Risk and Financial Management, 18(11), 622. https://doi.org/10.3390/jrfm18110622

Bawalle, A. A., Lal, S., Nguyen, T. X. T., Khan, M. S. R., & Kadoya, Y. (2024). Navigating Time-Inconsistent Behavior: The Influence of Financial Knowledge, Behavior, and Attitude on Hyperbolic Discounting. Behavioral Sciences, 14(11), 994. https://doi.org/10.3390/bs14110994

Foster, B., Sukono, & Johansyah, M. D. (2022). Analysis of the Effect of Financial Literacy, Practicality, and Consumer Lifestyle on the Use of Chip-Based Electronic Money Using SEM. Sustainability, 14(1), 32. https://doi.org/10.3390/su14010032

Kang GL, Park CW, Jang SH. A Study on the Impact of Financial Literacy and Digital Capabilities on Entrepreneurial Intention: Mediating Effect of Entrepreneurship. Behav Sci (Basel). 2024 Feb 8;14(2):121. doi: 10.3390/bs14020121. PMID: 38392474; PMCID: PMC10886005.

Kicova, E., Michulek, J., Ponisciakova, O., & Fabus, J. (2025). When Financial Awareness Meets Reality: Financial Literacy and Gen Z’s Entrepreneurship Interest. International Journal of Financial Studies, 13(3), 171. https://doi.org/10.3390/ijfs13030171

Kunjal, D. (2026). From Access to Ability: The Impact of Financial Inclusion on Financial Knowledge, Capabilities, and Literacy Among Gen Z University Students in South Africa. Journal of Risk and Financial Management, 19(3), 174. https://doi.org/10.3390/jrfm19030174

Mishra, D., Agarwal, N., Sharahiley, S., & Kandpal, V. (2024). Digital Financial Literacy and Its Impact on Financial Decision-Making of Women: Evidence from India. Journal of Risk and Financial Management, 17(10), 468. https://doi.org/10.3390/jrfm17100468

Nogueira, M. C., Almeida, L., & Tavares, F. O. (2025). Financial Literacy, Financial Knowledge, and Financial Behaviors in OECD Countries. Journal of Risk and Financial Management, 18(3), 167. https://doi.org/10.3390/jrfm18030167

Purnamasari, E. D., Anggraini, L. D., & Faradillah. (2025). Influence of FinTech Paylater, Financial Well Being, Behavioral Finance, and Digital Financial Literacy on MSME Sustainability in South Sumatera. Journal of Risk and Financial Management, 18(12), 682. https://doi.org/10.3390/jrfm18120682

Setiawan, B., Rani, S., Emilda, E., Arifin, F., & Utami, D. (2026). Understanding FinTech Adoption Drivers for Digital Financial Sustainability in Urban and Rural MSMEs. Risks, 14(4), 77. https://doi.org/10.3390/risks14040077

Sobaih, A. E. E., & Elshaer, I. A. (2023). Risk-Taking, Financial Knowledge, and Risky Investment Intention: Expanding Theory of Planned Behavior Using a Moderating-Mediating Model. Mathematics, 11(2), 453. https://doi.org/10.3390/math11020453

Sundarasen, S., Rajagopalan, U., & Ibrahim, I. (2025). Money Matters: A Contemporary Review of Young Adults’ Financial Behavior. Societies, 15(11), 304. https://doi.org/10.3390/soc15110304

Tandilino, C., Pontoh, G. T., Darmawati, D., & Indrijawati, A. (2025). Digital Financial Inclusion as a Mediator of Digital Financial Literacy and Government Support in MSME Performance. International Journal of Financial Studies, 13(4), 199. https://doi.org/10.3390/ijfs13040199

Yamaguchi, M., Ogura, K., Himeno, Y., Shiiku, A., Nagahama, H., Nabeshima, H., Kuramoto, Y., Khan, M. S. R., & Kadoya, Y. (2025). The Association of Financial Knowledge, Attitude, and Behavior with Investment Loss Tolerance: Evidence from Japan. Risks, 13(10), 204. https://doi.org/10.3390/risks13100204

Downloads

Published

2026-09-29

How to Cite

Putri, A. N., & Piatrini, P. S. (2026). Digital Financial Literacy and Its Influence on Investment Decision-Making among SMEs. Greenation International Journal of Economics and Accounting, 4(4), 1102–1110. https://doi.org/10.38035/gijea.v4i4.975

Issue

Vol. 4 No. 4 (2026): Greenation International Journal of Economics and Accounting (September - October 2026)

Section

Articles

License

Copyright (c) 2026 Andiena Nindya Putri, Putu Saroyini Piatrini

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright :

Authors who publish their manuscripts in this journal agree to the following conditions:

  1. Copyright in each article belongs to the author.
  2. The author acknowledges that the GIJEA has the right to be the first to publish under a Creative Commons Attribution 4.0 International license (Attribution 4.0 International CC BY 4.0).
  3. Authors can submit articles separately, arrange the non-exclusive distribution of manuscripts that have been published in this journal to other versions (for example, sent to the author's institutional repository, publication in a book, etc.), by acknowledging that the manuscript has been published for the first time at GIJEA.