Financial inclusion and its impact on performance of MSMEs with efficiency and financial flexibility as mediation: Empirical evidence from Malang City

This study analyzes the effect of financial inclusion on the performance of MSMEs and examines the role of mediation efficiency and financial flexibility. The simple random sampling technique was used with a total of 100 respondents and analyzed using partial least square (PLS). The results showed that financial inclusion had an effect on the performance of MSMEs, both directly and through mediation, namely, financial efficiency and flexibility. Increased financial inclusion has a major impact on improving the performance of MSMEs through efficiency, rather than through financial flexibility. Increasing access to financial services for MSMEs, which increases with increased efficiency in the form of a financial service approach to MSMEs, will improve the performance of MSMEs.