Enhancing SME Financial Performance and Business Sustainability through Financial Technology and Digital Marketing: The Role of Digital Financial Literacy

Abstract

The rapid advancement of digital technology has significantly transformed the business landscape, particularly for Small and Medium Enterprises (SMEs). Financial Technology (Fintech) and Digital Marketing have emerged as strategic tools that enable SMEs to improve financial management, expand market reach, and enhance business competitiveness. However, the effectiveness of these technologies largely depends on the level of Digital Financial Literacy possessed by business owners. This study aims to analyze the effects of fintech and digital marketing on the financial performance and business sustainability of SMEs in Greater Malang (Malang City, Malang Regency, and Batu City), with digital financial literacy acting as a mediating variable. This research employs a quantitative approach using explanatory research methods. Data will be collected from SME owners in Greater Malang through structured questionnaires using a five-point Likert scale. The sampling technique applied is purposive sampling, targeting SMEs that actively utilize fintech services and digital marketing platforms. The data will be analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine both direct and indirect relationships among the variables. The study is expected to contribute to the development of an integrative model that explains how digital financial literacy strengthens the impact of fintech and digital marketing on SME financial performance and business sustainability. The findings are anticipated to provide practical recommendations for SME owners, policymakers, and related stakeholders in enhancing digital capabilities and financial literacy to support sustainable business growth in the digital economy era.