Abstract

This study aims to analyze the influence of financial literacy and digital literacy on financial management among Micro, Small, and Medium Enterprises (MSMEs) in Baubau City. This research employed a quantitative approach using primary data collected through questionnaires distributed to 100 MSME owners selected through purposive sampling. Data were analyzed using multiple linear regression with the assistance of SPSS software. The results indicate that financial literacy has a positive and significant effect on MSME financial management (t = 2.407; Sig. = 0.018), suggesting that the higher the level of financial knowledge and capability possessed by business owners, the better their financial management practices. Digital literacy also has a significant positive effect on MSME financial management (t = 5.344; Sig. = 0.000), indicating that the utilization of digital technology by business owners increasingly supports financial management activities in addition to marketing and communication functions. Simultaneously, financial literacy and digital literacy have a significant effect on MSME financial management (F = 38.740; Sig. = 0.000), with a coefficient of determination (R²) of 44.4%, while the remaining 55.6% is influenced by other factors outside the research model. These findings highlight the importance of enhancing financial literacy and optimizing the utilization of digital technology to support more effective and sustainable financial management among MSMEs. Practically, the results imply that the Baubau City Government, through the Office of Industry, Trade, Cooperatives, and MSMEs, should prioritize integrated financial-digital literacy training and mentoring programs as a strategic policy intervention to strengthen MSME financial governance, reduce dependency on informal financial practices, and support the long-term competitiveness of the local MSME sector.