MSME Success Key: Capital Access and Digital Payments Drive Performance and Business Sustainability

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FORMOSA NEWS

The performance and long-term sustainability of Micro, Small, and Medium Enterprises (MSMEs) are heavily influenced by ease of access to capital and the adoption of digital payment systems. Recent research conducted by Kurnia Khoirunnisa and Lela Nurlaela Wati from the Muhammadiyah University of Technology Jakarta between May and July 2025 reveals that both factors play a crucial role in strengthening long-term business competitiveness. This study serves as a vital guide amid fierce digital economic competition, providing practical guidance for business actors and policymakers in formulating sustainable MSME development strategies.

The MSME sector has long been recognized as the backbone of Indonesia's economy due to its massive contribution to job creation and economic stability. Nevertheless, business owners frequently face classical hurdles, such as limited access to formal financing and slow adoption of financial technology. Without proper capital management and transaction efficiency, the long-term survival of these businesses remains vulnerable to environmental business changes.

To address this issue, the study employed a quantitative approach involving 375 MSME owners in Indonesia as respondents. Data collection was conducted using an online questionnaire with a six-point Likert scale to minimize neutral response bias, while the data analysis utilized Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4.0.

Based on the thorough analysis, several key findings were identified:

• Access to capital exerts a positive and significant effect on both the performance and sustainability of MSMEs.
• The use of digital payments enhances operational efficiency, directly impacting business performance and continuity.
• Business performance functions crucially as a mediating variable that bridges the effects of capital access and digital payments on long-term sustainability.
• The combination of capital access and digital payments collectively explains 35.2% of the variance in MSME performance, while together with performance, they explain 63.3% of the variance in business sustainability.

These findings indicate that MSME success does not rely solely on the availability of funds, but rather on how effectively these funds and digital technologies are converted into operational productivity. Through enhanced financial and digital literacy, business actors are expected to optimize transaction technology and funding sources to expand market share and secure future business continuity.

Author Profiles

• Kurnia Khoirunnisa – Researcher and academic at the Muhammadiyah University of Technology Jakarta.
• Lela Nurlaela Wati – Lecturer and researcher at the Muhammadiyah University of Technology Jakarta with expertise in management and business.

Research Sources:

• Article Title: The Effects of Access to Capital and Digital Payments on MSME Performance and Sustainability
• Journal Name: International Journal of Management Analytics (IJMA)
• Publication Year: 2025
• DOI: https://doi.org/10.59890/ijma.v4i3.35