EVALUATION OF SMART FINANCING IN THE CONTEXT OF MSMEs IN BARRU REGENCY IN INDONESIA: CHALLENGES AND OPPORTUNITIES

Abstract This research examines the adoption of smart financing technology in the MSMEs sector of Barru Regency, highlighting the factors that influence adoption and the barriers faced, and evaluates the implementation of smart financing for MSMEs in Barru Regency, highlighting the challenges of access to financing and opportunities for financial technology adoption. Using mixed methods, data was collected through surveys and interviews with 310 respondents to understand the perceptions, benefits, and barriers to using smart financing. Using the Diffusion of Innovation Theory (Rogers) approach, this research evaluated five main factors: relative advantage, compatibility, complexity, trialability, and observability. The results showed that the majority of MSMEs recognized the benefits of smart financing in improving efficiency and access to capital (mean = 3.95). However, the main challenges include the complexity of use (mean = 3.99) and the need for digital education (mean = 3.80). Key enabler factors include easy access to capital, government regulations, and social influence from other MSMEs that have successfully used them. There are some significant barriers, such as concerns over data security, high service costs, and limited digital infrastructure. To increase the adoption of smart financing, collaboration between the government, fintech providers, and MSMEs is needed through financial education and strengthening data security regulations. With the right strategy, smart financing has the potential to be an innovative solution for supporting the growth and competitiveness of MSMEs in the digital era.