Digital transformation of Pegadaian’s gold pawn services as a strategy to enhance financial inclusion and MSME competitiveness

Background: Digital transformation in the financial services sector has become a strategic approach to enhancing financial inclusion and micro, small, and medium-sized enterprises (MSME) competitiveness, particularly through non-bank institutions offering asset-based financing. In Indonesia, Pegadaian’s digital gold pawn services provide an accessible financial instrument for unbanked and underbanked communities. However, the role of digitalized pawn-based services in strengthening MSME competitiveness through financial inclusion mechanisms remains insufficiently explored. Methods: This study employs a qualitative descriptive approach using a systematic literature review of academic publications, policy documents, and institutional reports. The analysis integrates the frameworks of digital transformation, financial inclusion, and MSME capability development to synthesize empirical findings into a coherent analytical narrative. Findings: Digital gold pawn services expand access to formal financing, improve service transparency, accelerate transactions, and enhance financing predictability. Their contribution to financial inclusion extends beyond initial access to sustained usage and improved service quality. For MSMEs, competitiveness benefits primarily arise from liquidity stabilization, cost efficiency, temporal flexibility, and gradual capability development rather than immediate growth acceleration. Digital pawn services also help MSMEs manage cash flow volatility, reduce reliance on high-cost informal lenders, and foster financial discipline through repeated digital engagement. Conclusion: Pegadaian’s digital transformation represents a context-sensitive, capability-enhancing strategy that connects financial inclusion with sustainable MSME competitiveness. Its contribution is particularly evident in improving access to asset-based financing and supporting more effective financial management among underserved business communities. Novelty/Originality of this article: This study offers an integrated institutional perspective on digital gold pawn services as a non-bank, asset-based financing pathway linking digital transformation, financial inclusion, and MSME competitiveness. By examining these dimensions within an emerging market context, it extends the discussion of digital financial services beyond conventional banking and fintech models to highlight the potential role of digitalized pawn-based financing in sustainable MSME development.