Evaluating the impact of digital and financial literacy on MSME performance

The objective of this study was to determine the critical success factors that contribute to the performance of micro-, small, and medium-sized enterprises (MSMEs) in the context of digital and financial literacy. This study employed the total interpretive structural modeling approach to construct a hierarchical model of important success elements and analyze their direct and indirect interconnections. This article specifies six success factors that impact the performance of MSMEs, with the consideration of their effects and value generation leading to enhanced performance. The results indicate that entrepreneurial orientation and digital literacy are the primary components of the developed model, with all factors collectively contributing to overall performance. By identifying and categorizing key components within the strategic model, the study provides MSME founders with a systematic way to enhance business competency, which has significant consequences for business growth and success. The hierarchical model developed in this research assists policy makers and practitioners in improving the performance of MSMEs.