📈 economics

The mediating role of digital financial inclusion in enhancing sustainable performance among people with disabilities in Indonesia

Grounded in the resource-based view, this study of 170 entrepreneurs with disabilities in Indonesia demonstrates that financial literacy and access to financial services enhance sustainable business performance primarily by fostering digital financial inclusion, which serves as a critical mediating mechanism for advancing inclusive entrepreneurship.

Original authors: Ahmad Idris, Lina Saptaria, Arni Surwanti

Published 2026-10-01

📖 5 min read🧠 Deep dive

CC BY 4.0

Original authors: Ahmad Idris, Lina Saptaria, Arni Surwanti

Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). ✨ This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer

In the landscape of modern economics, a growing body of work examines how people with disabilities navigate the business world. For decades, researchers have understood that running a successful enterprise requires more than just a good idea; it demands the ability to manage money, secure loans, and plan for the future. This concept, often called financial literacy, is the knowledge and skill set needed to make sound decisions with cash and credit. Closely tied to this is the idea of access to finance, which refers to the practical ability to walk into a bank or log onto a website to get the funds necessary to grow a business. In recent years, a third element has emerged as a critical bridge between these two: digital financial inclusion. This is not merely about having a bank account, but about the capacity to use digital tools—like mobile banking apps and online payment systems—to manage money effectively. When these elements come together, they can determine whether a small business survives or thrives. The question of how these factors interact for people with disabilities is particularly urgent, as this group often faces unique barriers that can stall their economic independence.

A team of researchers in Indonesia set out to explore exactly how these pieces fit together for entrepreneurs with disabilities. They focused on a specific group of 170 business owners across three regions: East Java, Central Java, and Yogyakarta. These were not hypothetical figures but real people managing real businesses, ranging from food and fashion to agriculture and creative services. The researchers wanted to see if knowing how to handle money and having access to loans would lead to better business outcomes, and whether using digital financial tools acted as the crucial link that made it all work. They surveyed these entrepreneurs, asking detailed questions about their financial knowledge, their ability to get funding, their use of digital banking, and the long-term stability of their companies. The goal was to map the path from financial knowledge to a business that can endure over time.

The study found a clear and positive chain of events. First, the researchers confirmed that when entrepreneurs with disabilities possess stronger financial knowledge, they are much more likely to use digital financial services. Similarly, those who have better access to traditional financing are also more likely to engage with digital platforms. It appears that understanding money and having the means to get it encourages people to embrace the digital tools available to them. This engagement with digital finance, in turn, has a direct and powerful impact on the sustainability of their businesses. The data showed that entrepreneurs who actively use these digital systems are better equipped to keep their businesses running steadily, maintain consistent income, and even contribute positively to their local communities.

Crucially, the research revealed that digital financial inclusion is not just a helpful side effect; it is the mechanism that connects financial knowledge and access to finance with long-term success. In other words, having money skills and access to loans helps a business owner succeed largely because it empowers them to use digital tools effectively. The study measured this relationship with high confidence, showing that the link between financial capabilities and business survival is significantly strengthened when digital inclusion is present. The findings suggest that for people with disabilities in Indonesia, the path to a resilient business is paved by learning about money, securing access to funds, and then leveraging digital platforms to manage it all.

The researchers also noted the specific demographics of the group they studied to provide context for their findings. The majority of the respondents were women, and most fell into the 40 to 49 age group, suggesting a cohort with substantial life and business experience. Physically, the most common disability among the participants was a physical impairment, though the group included individuals with hearing, visual, and other types of disabilities. Their businesses were diverse, with a significant portion operating in the culinary sector, followed by fashion and services. Many of these businesses had been running for more than ten years, indicating that the study captured a group of established entrepreneurs rather than just those starting out. This diversity in the sample helped ensure that the results reflected a broad range of experiences within the disability community.

The implications of these findings extend beyond the numbers. The study suggests that to support the economic independence of people with disabilities, efforts must go beyond simply offering loans. It is essential to build financial literacy programs that are tailored to the specific needs of this group, teaching them not just the basics of budgeting but also how to navigate digital platforms. Financial institutions and technology providers have a role to play as well, needing to design apps and services that are accessible to everyone, regardless of their physical or cognitive abilities. By removing barriers to digital access and ensuring that financial education is inclusive, society can help more people with disabilities build businesses that last. The research indicates that when these conditions are met, the result is not just a business that survives, but one that contributes to a more inclusive and equitable economy.

Technical Summary: The Mediating Role of Digital Financial Inclusion in Enhancing Sustainable Performance Among People with Disabilities in Indonesia

Problem Statement
Despite the global recognition of the rights of people with disabilities (PWDs) to participate in the entrepreneurial ecosystem, significant barriers persist. In Indonesia, where PWDs constitute approximately 5% of the population, financial inclusion remains critically low; as of 2020, 73.76% of PWDs lacked bank accounts. This exclusion hinders business sustainability, as PWD entrepreneurs face greater difficulties in accessing financial resources compared to their non-disabled counterparts. While existing literature addresses financial literacy and access to finance independently, there is a gap in understanding how these capabilities translate into sustainable performance within the specific context of disability entrepreneurship. Furthermore, the role of digital financial inclusion as a mediating mechanism linking financial capabilities to long-term business viability remains underexplored. This study addresses these gaps by investigating the relationships among financial literacy, access to finance, digital financial inclusion, and sustainable performance among PWD entrepreneurs in Indonesia.

Methodology
The study employs a quantitative research design grounded in the Resource-Based View (RBV) theory. Data were collected via a purposive survey of 170 PWD entrepreneurs across East Java, Central Java, and Yogyakarta. The sample included diverse disability profiles and business sectors, with a majority of respondents being female, aged 40–49, and operating businesses for over ten years.

The research model utilizes Structural Equation Modeling (PLS-SEM) analyzed through SmartPLS 4 software. The measurement model included four constructs:

Financial Literacy: Measured by knowledge, skills, awareness, and behaviors regarding financial management.
Access to Finance: Assessed through regulatory ease, ability, virtue, and integrity in obtaining loans and services.
Digital Financial Inclusion: Evaluated via bank account ownership, transaction frequency, access to credit, and platform trust.
Sustainable Performance: Defined by stability, resilience, environmental integration, and social impact.

The study validated the measurement model using Cronbach's alpha, Composite Reliability (CR), Average Variance Extracted (AVE), and discriminant validity tests (Fornell-Larcker criterion and HTMT ratio). The structural model was evaluated using path coefficients, t-statistics (via bootstrapping with 5,000 subsamples), and effect sizes ( $f^2$ ).

Key Results
The analysis confirmed all hypothesized relationships (H1–H7):

Direct Effects: Financial literacy ( $\beta=0.443$ ) and access to finance ( $\beta=0.480$ ) significantly and positively influence digital financial inclusion. Financial literacy ( $\beta=0.288$ ) and access to finance ( $\beta=0.267$ ) also directly and positively influence sustainable performance. Digital financial inclusion itself has a strong positive effect on sustainable performance ( $\beta=0.448$ ).
Mediation Effects: Digital financial inclusion acts as a significant mediator. It partially transmits the effects of financial literacy and access to finance onto sustainable performance. The indirect effects for both pathways were statistically significant ( $p < 0.01$ ), with 95% confidence intervals not encompassing zero.
Model Fit: The model explains 49.5% of the variance in digital financial inclusion ( $R^2=0.495$ ) and 58.2% of the variance in sustainable performance ( $R^2=0.582$ ). Effect size analysis indicated that financial literacy and access to finance have substantial effects on digital financial inclusion, while digital financial inclusion has a medium effect on sustainable performance. Notably, financial literacy has a minor effect on sustainable performance ( $f^2=0.088$ ).

Key Contributions
The paper makes three primary contributions to the literature:

Integration of Constructs: It extends the literature on disability entrepreneurship by integrating financial literacy, financial access, and digital inclusion into a unified framework for sustainable performance, addressing the fragmented nature of previous studies.
Mediating Mechanism: It identifies digital financial inclusion as a critical explanatory mechanism. The study demonstrates that financial capabilities do not only directly impact sustainability but also operate through the adoption and utilization of digital financial platforms.
Contextual Specificity: It provides empirical evidence specifically for PWDs in Indonesia, a demographic often excluded from general SME studies, highlighting the unique challenges and the transformative potential of digital platforms for this group.

Significance and Claims
The authors claim that the study underscores the transformative potential of digital platforms in promoting economic independence, social participation, and the long-term viability of businesses owned by PWDs. The findings suggest that while barriers to financial access persist, digital financial inclusion serves as a vital pathway to overcome these obstacles.

From a practical standpoint, the paper argues that strengthening financial literacy programs, expanding access to finance, and promoting inclusive digital ecosystems are essential for enhancing business resilience among PWDs. The authors propose that policymakers and financial institutions must tailor initiatives to the diverse needs of PWDs, including accessible training materials and the design of barrier-free digital interfaces. The study concludes that achieving sustainable performance for PWDs requires a holistic approach that leverages digital mediation to bridge the gap between financial capability and economic outcomes.

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