A New Framework for Amplifying Business Performance of SMEs in Riau Province through Digital Finance and Financial Literacy M. Hasmil Adiya, Masyuri Hamidi, Rida Rahim, Fajri Adrianto
Institut Bisnis dan Teknologi Pelita Indonesia, Universitas Andalas
Abstract
The development of SMEs has had a significant impact on economic policy in Indonesia, with SMEs in Riau Province being a job creation solution. However, some areas need improvement. First, SMEs in Riau Province face challenges in their performance, as evidenced by declining profitability and the need to maintain their business. Second, implementing digital finance among SMEs in this region faces obstacles because several companies are still in the early stages of utilizing computer and internet technology in their business processes. Third, financial literacy in Riau Province must be improved, especially regarding microfinance and FinTech institutions. Fourth, a lower level of adaptive resilience among SMEs hinders their ability to cope with external issues such as the ongoing Covid-19 pandemic. Lastly, the sustainable competitive advantage of SMEs in Riau Province requires improvement, as only a few companies are involved in the partnership strategy. In short, this new framework proposes integrating digital finance, increasing financial literacy, fostering adaptive resilience, and developing sustainable competitive advantage as key factors for improving the business performance of SMEs in Riau Province. The findings of this research are expected to provide valuable insights and guidance for stakeholders involved in supporting and encouraging the growth of SMEs in the regions.
Keywords: SMEs, Riau Province, Business Performance
