Integrating digital financial solutions into MSME business models: assessment of MSME readiness for digital financial integration

The integration of digital financial solutions has become essential for enhancing the sustainability and competitiveness of Micro, Small, and Medium Enterprises (MSMEs), especially in developing economies. This study examined MSME readiness in terms of digital capability, financial literacy, infrastructure readiness, and strategic orientation in relation to the integration of digital financial systems. Using a quantitative, cross-sectional research design, data were collected from 189 MSMEs in Surigao del Sur, Philippines, and analyzed using descriptive statistics, correlation, and regression techniques. The findings revealed a strong positive relationship between MSME readiness and the level of digital financial integration. MSMEs with higher levels of readiness demonstrated greater improvements in business performance, operational efficiency, and financial stability, whereas those with lower levels of readiness gained only limited benefits. The results also indicated that full and systematic integration produced better outcomes than partial adoption. Overall, the study highlights that readiness is a key driver of successful digital transformation among MSMEs and emphasizes the need for targeted interventions to strengthen their capabilities and support sustainable digital finance adoption.