Analysis of the Financial Performance of MSMEs in the Culinary Sector With the Influence of Financial Literacy and the Use of Financial Technology in the City of Medan

Abstract

Understanding financial literacy is crucial in overcoming financial challenges for MSME actors, to manage finances effectively and make decisions based on accurate financial information. Financial literacy has an influence and impact on the financial performance of MSMEs, in addition to financial literacy, the application of financial technology (Fintech) is also an important factor in improving the financial performance of MSMEs. This study aims to evaluate whether financial literacy and the use of financial technology affect the financial performance of MSMEs in the culinary sector in Medan City. The method used is quantitative descriptive, with primary and secondary data as sources of information. Primary data was obtained by distributing questionnaires to respondents (MSMEs in the culinary sector). The method used is Structural Equation Modelling (SEM) based on Partial Least Square (PLS) using SEM PLS 4. The results of the study show that: (1) financial literacy has a non-positive and insignificant influence on the financial performance of MSMEs in the culinary sector of MSMEs in Medan City, and (2) The use of financial technology also has no positive and insignificant effect on the financial performance of MSMEs in the culinary sector in Medan City.