Utilization of Digital Financial Applications in Financial Management for MSMEs in Pangkalpinang City

Abstract

Digital transformation has encouraged the adoption of digital financial applications as a solution to improve the quality of financial management among Micro, Small, and Medium Enterprises (MSMEs). However, in-depth studies examining the experiences of MSME actors in utilizing such applications through a qualitative approach, particularly in Pangkalpinang City, remain limited. This study aims to analyze the utilization of digital financial applications in MSME financial management in Pangkalpinang City, identify the perceived benefits, and explore the challenges and adaptation strategies involved in their implementation. The study employed a descriptive qualitative approach with purposive sampling, involving MSME owners or managers who had used digital financial applications for at least six months. Data were collected through in-depth interviews, observation, and documentation, and were analyzed using the interactive model of Miles, Huberman, and Saldaña. The findings indicate that digital financial applications are utilized for transaction recording, cash flow management, financial reporting, and monitoring business financial conditions. Their use provides several benefits, including improved administrative organization, greater efficiency in financial reporting, reduced recording errors, improved decision-making quality, and enhanced financial literacy among MSME actors. The challenges encountered include low digital literacy, limited utilization of application features, persistent manual recording habits, and limitations in devices and technical assistance. MSME actors address these challenges through self-directed learning, training, experience sharing, and gradual adoption of digital applications. The study concludes that digital financial applications play an important role in improving the quality of MSME financial management in Pangkalpinang City, supported by enhanced digital literacy and continuous assistance.