This study investigates how Financial Literacy and Digital Innovation
contribute to the performance of Micro, Small, and Medium Enterprises
(MSMEs). It fills a gap in empirical research concerning the effects of
financial literacy and digital innovation on MSME growth. A conceptual
framework grounded in agency theory has been established. The
research involved distributing 200 questionnaires to MSME
stakeholders in Sidenreng Rappang District, South Sulawesi. Data was
gathered through surveys and analyzed using multiple regression to
evaluate the influence and interaction of these two factors on MSME
performance. Hypotheses were tested via multiple linear regression to
assess how independent variables affect the dependent variable. The
results show that both financial literacy and digital innovation have a
significant individual impact on MSME performance. Moreover, the
interaction of financial literacy and digital innovation also positively
influences MSME performance. These findings are anticipated to offer
valuable insights for policymakers in crafting programs that enhance
MSME growth through improved financial literacy and digital
innovation. Additionally, academics can further contribute to the
advancement of new theories and knowledge in this area.Keywords:
Financial Literacy, Digital Innovation, SME Performance.