FINTECH ADOPTION: THE ROLE OF FINANCIAL LITERACY, TRUST AND USER INNOVATIVENESS IN MSMES IN SAMPANG

Abstract

The rapid development of financial technology has changed how financial services are provided, especially for micro, small, and medium enterprises (MSMEs). However, the adoption of fintech among MSMEs on Madura Island is still relatively low, so further studies are needed on the factors influencing adoption decisions. This study examines the influence of financial literacy and trust on fintech adoption among MSMEs in Sampang Regency, Madura, with user innovativeness as a mediating variable. This study uses a quantitative approach with primary data collected from 100 MSME fintech users through a structured questionnaire. The analysis technique used is Structural Equation Modeling with the Partial Least Squares (SEM-PLS) approach to four primary constructs: financial literacy, trust, user innovativeness, and fintech adoption. The study results show that financial literacy does not directly affect fintech adoption but has an indirect effect through user innovativeness. It shows that financial literacy alone is insufficient without an innovative attitude towards technology. Meanwhile, trust does not have a significant effect, directly or indirectly, reflecting concerns about data security and preferences for conventional financial practices. In contrast, user innovativeness is shown to play a significant role in driving fintech adoption. Theoretically, this study integrates three primary constructs into one fintech adoption model and emphasizes the importance of the mediating role of innovativeness. These results support the need for digital financial education that encourages innovativeness, expands access to technology, and public policies that build trust in fintech services.