Ramadhani Prasetyo

Click, Borrow, Grow: The Silent Rise of Small Biz in the Digital Era Figure 1 : Financial Inclusion (Modefin, 2019) Introduction Financial inclusion (FI) is the process of ensuring that individuals, households, and businesses in a community have adequate access to formal financial services and products such as transactions, credit cards, payments, savings, and insurance, which are delivered in a sustainable manner sustainably (Cicchiello et al., 2021). Financial inclusion refers to all efforts taken to remove all types of barriers many barriers that are evaluated based on price and non-price factors in order to maximize the advantages and access to services provided by formal financial institutions for the community. Financial integration refers to the process of assurance that everyone, especially those who have been overturned and marginalized population groups, have access to affordable and appropriate financial servicesaffordable financial services. The aim The goal is to enable people with tools like savings accounts, credit, insurance, and digital payment options to help them join the formal financial system, manage their finances and build economic resilience (Grant, 2024). Financial inclusion can encourage entrepreneurship and expand business. With the availability of credit, investment, safe savings and effective payment small. Small business can grow, create jobs and contribute economic progress. Access to insurance increases resilience by delivering safeguards against unexpected risks and financial disturbances, giving individuals reassurance and enabling business owners to pursue opportunities with enhanced assurance. By integrating additional more individuals and organizations into the formal economic framework, financial inclusion enhances economic engagement, elevates productivity, and establishes the groundwork for equitable and sustainable economic advancement (Elizabeth Price, 2025). Economic understanding of MSMEs promotes management and access to financial products. Financial integration is seen as a process that promotes the access, availability and benefits of the formal financial system for all economic actors (Sarma, 2012). The community is in great demand for financial services, particularly in relation to basic financial services, such as non-payment transactions, savings, loan or financing, transfers, and insurance companies. Financial services currently dominate banks as the institution that provides financial services and payments. To meet these needs, an agency programme was formed that worked with the programme along with the MSME player and participated took part in Integrated Financial Services as a 1 provider. In addition to deepening financial services aimed at lower classes (Susanto and Widiyastuti, 2020). How Digital Financial Inclusion Can Boost MSMEs to the Next Level Figure 2 : Financial Inclusion of MSMEs (Debashis Bandyopadhyay, 2023) Micro, Small, and Medium Enterprises (MSMEs) are small-scale businesses, but this sector is very important for the Indonesian economy, such as the creation of new jobs and the utilization use of the surrounding community which support the level of progress of the Indonesian economy (Ramadani et al., 2025). a. Flexibility and Effectiveness of Fintech Solutions as a Substitute for UMKM Funding MSMEs in different nations, such as Indonesia, frequently often encounter major obstacles when trying to obtain funding from official financial organizations because of rigid rules and complicated procedures. Conventional banks demand guarantees and thorough paperwork, which many small business owners do not possesshave, leading them to be viewed as "unbackable." (Al-huda et al., 2023). In this situation, financial technology has come up as a new way to manage money that gives answers by creating a loan application system that is easier and faster. b. Safer and Validated Transactions Gaining access to funds and tapping into the economic opportunities that can arise from it has become an important focus for the Indonesian government in its economic planning. Financial technology is likely to be very important in this area. Fintech tools, like digital wallets, assist individuals in obtaining help individuals to obtain financial resources for their everyday transactions. Digital wallets make it easier for people to manage money using their smartphones and have transformed the way money is sent and received (Vincent Henry Iswaratioso, 2024). Digital wallets have the potential to reach individuals outside of the conventional markets, offering financial services to many who are new to it. The Central Bank of Indonesia, which oversees the national payment systems, has forecasted that digital wallets can effectively serve those without bank accounts or those who have limited banking access. The government’s national approach to financial inclusion has indicated that various groups can now engage in the economy due to these innovative solutions. 2 c. Drive technological innovation towards more advanced technological innovation. Digital inclusive finance encourages technological advancements in businesses that operate at various levels of technology, but the backing for high-tech companies remains inadequate. An analysis of differences discovered that there are notable variations in how digital financial inclusion impacts different areas; the central and western regions show more effective results in using digital inclusive finance to boost business innovation than the eastern region (Sun and Zhang, 2024). Challenges in Implementing Digital Financial Inclusion in Developing MSMEs One of the most important sectors for the development of the economy in Indonesia is Micro, Small, and Medium Enterprises (MSMEs). But this sector often faces various problems, especially in financial management in these MSMEs. Important difficulties involve not understanding financial conceptsideas, relying on manual bookkeeping that may have mistaken, restricted access to official financial services, and using very little digital technology. These issues can cause businesses to operate less run less effectively, make decisions without decide without enough information, and have a hard time competing in the marketcompeting. Digital financial solutions appear as new methods to tackle these issues. By using digital technology, MSMEs can boost their work efficiency, speed up transactions, aid in making strategic choices, and increase their access to official financial services (Alamsyah, Yulianti and Nurhayati, 2024). Statistics of MSME Growth in Indonesia The MSME sector shows the highest growth in Indonesia. In 2019, the total number of MSMEs registered in Indonesia was around 65.5 million units. This figure increased went up significantly by 1.98% compared to the previous year which reached 64.2 million units. If explained in detailexplained, the total number of micro businesses recorded in 2019 was 64.6 million. With the number of small businesses as many as 798.7 thousand units and medium businesses as many as 65.5 thousand units (Sumaryadi, 2022). No- Year- Total of MSMEs in Indonesia- - Table 1. Table data on the growth of MSMEs in Indonesia (Sumaryadi, 2022) Total of MSMEs Indonesia- 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 0 Figure 3. Column Chart of Growth MSMEs in Indonesia from table data source by (Sumaryadi, 2022) Conclusions Including digital finance is essential to empowering MPM by increasing access to financial resources thanks to more flexible and effective traditional banks, such as innovations in financial technology. These developments help small businesses overcome the challenges they often face, especially the lack of guaranteed and complicated bank processes. In addition, digital tools such as e-portfolios make financial transactions safer, faster and easier for people who are not yet included in the formal financial system. MSMEs can increase operational efficiency, improve financial decisionmaking, and participate take part more actively in the formal economy by implementing digital financial services, which also encourage innovation in various regions, albeit but to differing degrees. However, issues like low financial literacy and reliance on manual. 4 Bibliography Al-huda, R. et al. (2023) “Digital-Based MSME Program Marketing Communication Adaptation,” 4(2), pp. 973–984. Alamsyah, W., Yulianti, R. and Nurhayati, R. (2024) “Digital Financial Strategies in Managing SMEs to Maximize Profitability,” pp-. Cicchiello, A.F. et al. (2021) “Financial inclusion and development in the least developed countries in Asia and Africa,” Journal of Innovation and Entrepreneurship, 10(1). Available at: https://doi.org/10.1186/s-. Debashis Bandyopadhyay (2023) Financial Inclusion of MSMEs - whither way ?, knnindia. 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