From Literacy to Loans: Unlocking Msmes Financing Through Quality of Financial Reporting

Micro, Small, and Medium Enterprises (MSMEs) are a fundamental pillar and the main driver of the economy in Indonesia. However, the majority of MSMEs face a significant constraint that hinders their growth and competitiveness: limited access to formal financing. This study aims to analyze the role of Financial Report Quality as a mediating variable in the relationship between Financial Literacy and Ease of Access to Financing for MSMEs. This research is causal associative and explanatory in nature and employs a cross-sectional design. The research population consists of MSMEs fostered by Rumah BUMN Sumsel, and based on purposive sampling, a sample of 50 MSMEs was obtained. The analysis technique used is Structural Equation Modeling (SEM) with the assistance of SmartPLS 4.0 software. The research results indicate that financial literacy has a significant influence on the ease of access to financing for MSMEs. Similarly, financial literacy also has a significant influence on the quality of financial reporting. This study has proven that the quality of financial reporting has a significant influence on the ease of access to financing. Consequently, the mediating effect of this variable is proven.