HOW DOES DIGITAL FINANCIAL LITERACY RELATE TO FINANCIAL PERFORMANCE OF MSMES TOURISM FIRM? THE MEDIATING ROLE OF FINANCIAL BEHAVIOR

Abstract

MSMEs play a significant role in the digital economy, highlighting the need for the government to focus on their development beyond financing, and to improve their digital literacy. This study investigates the impact of Digital Financial Literacy on the Financial Performance of MSMEs in Pancer Puger Beach, Jember, with a specific focus on the role of Financial Behavior in promoting this relationship. The study uses mixed method with an exploratory sequential design, combining qualitative data gathered from focus group discussions, in-depth interviews, and observations, with quantitative data collected through questionnaires from 120 MSMEs respondents obtained via snowball sampling which analyzed using the Partial Least Square. The result shows that (1) Digital Financial Literacy affects Financial Performance, (2) Digital Financial Literacy affects Financial Behavior, and (3) Financial Behavior affects Financial Performance of MSMEs while Financial Behavior serves as a mediator between Financial Literacy and Financial Performance. The findings suggest that tourism MSMEs can adapt and thrive in line with Indonesia's digital financialization.JEL: G41, L26, L83.