Driving Sustainable Digital Financial Transformation through Financial Literacy, Financial Technology, Green Accounting, and ESG: Evidence from Endek and Songket Weaving MSMEs in Bali

Made Ayu Jayanti Prita Utami; Nyoman Indah Kusuma Dewi; I Putu Okta Priyana; Gede Sedana  Wibawa Yasa; Ni Putu Rita Sintadevi

doi:10.59261/inkubis.v8i3.436

Authors

Made Ayu Jayanti Prita Utami Politeknik Negeri Bali
Nyoman Indah Kusuma Dewi Politeknik Negeri Bali
I Putu Okta Priyana Politeknik Negeri Bali
Gede Sedana Wibawa Yasa Politeknik Negeri Bali
Ni Putu Rita Sintadevi Politeknik Negeri Bali

DOI:

https://doi.org/10.59261/inkubis.v8i3.436

Keywords:

ESG, Financial Literacy, Financial Technology, Green Accounting, Sustainable Digital Financial Transformation, Traditional MSMEs

Abstract

Background: The convergence of digitalization and sustainability creates challenges for Micro, Small, and Medium-sized Enterprises (MSMEs), particularly traditional creative enterprises that must adopt technological developments while maintaining business sustainability and cultural values. However, the contribution of financial capabilities, technology adoption, and environmental practices to Sustainable Digital Financial Transformation (SDFT) remains underexplored.

Objective: This study investigates how Financial Literacy, Financial Technology, and Green Accounting influence Environmental, Social, and Governance (ESG) performance and SDFT, while also examining ESG as a potential mediator in the relationships between these factors and SDFT among Endek and Songket weaving MSMEs in Jembrana Regency, Bali.

Methods: A quantitative explanatory approach with a cross-sectional survey design was adopted in this study. Structured questionnaires were administered to 100 owners and managers of Endek and Songket weaving MSMEs, who were selected through purposive sampling. The collected data were subsequently analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.

Results: Financial Literacy and Financial Technology have positive and significant effects on ESG, whereas Green Accounting has no significant effect. Financial Literacy, Financial Technology, and Green Accounting have no direct significant effects on SDFT, while ESG has a positive and significant effect on SDFT. However, ESG does not serve as a statistically significant mediator of the relationships between the three predictor variables and SDFT.

Conclusion: Sustainable Digital Financial Transformation requires more than financial knowledge, financial technology adoption, and environmental practices. ESG emerges as a critical direct driver of SDFT, underscoring the need to embed environmental stewardship, social value creation, and robust governance mechanisms.

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