ABSTRACT
This research analyzes the effect of financial inclusion in the performance of MSMEs and examines the role of efficiency and financial flexibility as a mediation. The Simple Random Sampling technique was used with a total of 100 respondents and analyzed using the Partial Least Square (PLS) method. The results showed that financial inclusion affected the performance of MSMEs, either directly or through mediation, namely efficiency and financial flexibility. Both of them had a positive effect on the relationship between financial inclusion and the performance of MSMEs. Moreover, the increase in financial inclusion had a major impact on improving the performance of MSMEs through efficiency rather than financial flexibility. Therefore, increasing access to financial services for MSMEs will enhance the performance of MSMEs through improving efficiency in the form of a financial services approach for MSME
