Beware! Micro Enterprises in Indonesia and Neighbours Have Weak Financial Literacy
The ADB Institute (ADBI) has revealed that financial literacy among owners of micro enterprises in the ASEAN region is far lower than that of larger companies. Yet financial literacy has a strong influence on the development of digital finance adoption in a country.
“In a study covering seven member countries of the Association of Southeast Asian Nations (ASEAN) and 10 member countries of the Central Asia Regional Economic Cooperation (CAREC), owners of micro enterprises and self-managed family businesses were found to have lower financial literacy than owners of larger companies,” according to the ADB Institute report cited on Friday (3/4/2026).
ADBI assesses that this low financial literacy can be translated as vulnerability or weaker ability to manage cash flow, evaluate loan requirements, or respond to shocks.
Meanwhile, higher financial literacy is associated with increased use of fintech, which in turn supports business continuity and sales growth.
According to ADBI in its report, for many small companies, the benefits of fintech are not the innovation itself, but rather the speed and certainty, such as timely payments, income tracking, budgeting for inventory, and separating business and household finances.
“Data shows that supporting small enterprises in this region requires more than just cheap credit or better internet,” ADBI writes.
According to ADBI, this situation requires serious efforts to build capabilities through training, trust, and tools that simplify decision-making without hiding risks.
ADBI recommends that financial literacy programmes be combined with socialisation of usage and real impacts in those businesses. For example, training related to wages, money transfers, school payments, micro-insurance, or working capital needs.
“It is clear that digital finance can be a powerful engine of growth and inclusion, but only when people understand the tools and services offered to them and feel confident and empowered enough to use them.”