From knowledge to prosperity: Financial literacy driving women entrepreneur led-small medium enterprises through technology innovation

Women-led businesses play a vital role in driving economic growth by generating employment, reducing poverty, and fostering innovation, particularly in emerging economies such as Indonesia. Despite this contribution, women entrepreneurs continue to encounter significant barriers in accessing financial resources, which constrain firm growth and long-term sustainability. While prior studies have explored financial literacy, empirical evidence remains limited on how pathways linking financial literacy, access to credit, and business performance operate in women-led MSMEs. Research focusing on ultra-micro women-owned firms, which are highly vulnerable to financial shocks, remains scarce, underscoring a critical empirical gap. This study adopts a quantitative design using nonprobability purposive sampling, targeting women MSME owners who utilize FinTech services for their businesses. Data were collected from 597 female entrepreneurs through an electronic survey. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to test hypothesized relationships and mediating effects. Results reveal that financial literacy significantly enhances financial inclusion, which subsequently improves access to credit. Financial intermediaries strengthen these pathways by reducing financing constraints and broadening access to financial services for women-led enterprises. Their role amplifies the positive impact of financial inclusion and credit access on business performance. The study contributes to the literature by emphasizing the pivotal role of financial intermediaries in connecting financial literacy, financial inclusion, and performance outcomes. Findings indicate a need to expand financial capability programs and reinforce digital financial services to improve financial access and support the sustainable growth of women-led MSMEs in Indonesia. • Financial inclusion drives finance access, intermediaries, and performance for women-led MSMEs. • Financial literacy enhances inclusion for women-led MSMEs in emerging economy. • FinTech intermediaries substantially boost performance of women-led MSMEs. • Financial inclusion has strongest direct effect on women-led MSMEs performance. • FinTech intermediaries mediate financial inclusion and access to performance pathways.