HOW DIGITAL FINANCIAL LITERACY AFFECTS i-FINTECH ADOPTION AMONG BUMIPUTERA SMEs IN SELANGOR, MALAYSIA

Abstract

i-FinTech is devoted to companies or entrepreneurs that combine financial services with recent, advanced technologies that comply with Shariah. However, it is unfortunate that the rapid development of i-Fintech service has not been accompanied by an increase of digital financial literacy. This study aims to identify the extent of i-Fintech adoption and the level of digital financial literacy. Further, this study also intends to identify how digital financial literacy may affects i-FinTech adoption among SMEs’ entrepreneurs in Selangor, Malaysia. A quantitative technique was employed through the use of 88 surveys distributed using convenience sampling method to Bumiputera SMEs’ entrepreneurs. The data is analysed using standard multiple regression. The result shows that majority of the entrepreneurs are moderately agreed to adopt i-FinTech in their business, but the level of digital financial literacy was still low. The result also shows that i-Fintech adoption is positively and significantly influence by knowledge of digital financial products/services and knowledge of digital financial risk control. Contrary, awareness of digital financial risks is negatively influenced i-FinTech adoption. These results indicate that the level of digital financial literacy can guide the SMEs’ entrepreneurs in making decisions related to i-Fintech adoption. It is suggested that digital financial literacy needs attention because it has been overlooked in the National Strategy for Financial Literacy 2019-2023. The government, therefore, need to formulate a Comprehensive Digital Financial Literacy Blueprint together with a workable strategy to implement it.