Fintech Adoption Drivers for Innovation for SMEs in Indonesia

Round 1

Reviewer 1 Report

- The paper evaluates the governance issues of Fintech in Indonesia. But, there is nothing to be noteworthy in that it concludes with very common-sense-type of findings, "The present study suggests that policymakers could foster the expansion of Fintech business infrastructure to improve access to financial services for SMEs in developing economies" -> Without this kind of findings and/or suggestions, anybody can say that Fintech is important! What the readers want to know is the difficulties and problems on the Fintech industries and policies as well as its solution as troubleshooting implications. Otherwise, the paper is "useless".

- English should be supported by "the Certificate of professional English proof reading service" of MDPI or other American companies. For example, the title, "Fintech Adoption Drivers and Innovation for SMEs in Indonesia" is really terrible because it does not give clear, precise, appropriate implications of the paper. Change it with "Fintech Adoption Drivers for Innovation of SMEs in Indonesia", -> similar, but totally different. Likewise, all the sentences are not "understandable" for global readers. Ask for professional help!

- "Introduction" does not show the research question clearly. Make it more clear, precise research objective. By the way, there are confusing in literature review in 1. introduction and 2. Literature review. Rewrite all more logically. 

- Figure 1 seems to be nice, but it shows "terrible misunderstanding in causal relationship among the variables". Make it more logically with inputs, middle intermediator(s) and outputs more clearly. Refer Y.J. Shin et al. (2019, Sustainability 2019, 11, 5351; doi:10.3390/su11195351).

- In the social science research, the most important issue is not the accpeted variables, but rejected variable(s). If the Table 7 reveals that five out of six direct hypotheses are supported except financial literacy (H3a), then, the paper should clarify why H3a is rejected and how the government policy should be changed for this rejected variable. Likewise, make it clearly for all rejected and/or marginally accepted variables as well as the weak variables with relatively low coefficient estimates.

- I cannot find any trial and errors of Indonesian practice in the conclusion. 

Does it mean Indonesia is wonderful in Fintech? Otherwise, explain more in details for Indonesian government to be considered more precisely.

Author Response

Dear Reviewer,

Thank you very much for your valuable comments and suggestions. We have revised our manuscript entitled “Fintech Adoption Drivers and Innovation for SMEs in Indonesia - Manuscript ID: JOItmC-2042941” according to the comment, as shown below:

Point 1

The paper evaluates the governance issues of Fintech in Indonesia. But, there is nothing to be noteworthy in that it concludes with very common-sense-type of findings, "The present study suggests that policymakers could foster the expansion of Fintech business infrastructure to improve access to financial services for SMEs in developing economies" -> Without this kind of findings and/or suggestions, anybody can say that Fintech is important! What the readers want to know is the difficulties and problems on the Fintech industries and policies as well as its solution as troubleshooting implications. Otherwise, the paper is "useless".

Response point 1

Thank you very much for your comment and we have explained the difficulties and problems on the Fintech industries in Indonesia as well as provide a solution to government to address this issue. It is explained in the research implication section.

Due to the collateral and capital issue, financial institution will charge higher interest to mitigate the potential future risk of credit from SMEs. From the perspective of a Fintech company, the challenge arises due to the higher cost of capital to allocate credit for SMEs, causing them less competitive compared to existing financial firms that have collaborated with the government in providing interest subsidies for financing SMEs. Therefore, the government need provide a collaboration platform for Fintech companies by providing interest subsidies to SMEs and facilitating appropriate policies to create fair business environment for all financial industry companies. Furthermore, research findings indicate that the government support can influence user innovativeness (SMEs owners), by developing Fintech business infrastructure to provide opportunities for SMEs to experience using Fintech services, which are not yet equitably distributed in many developing countries. This finding is also align with individual innovativeness theory state that, "openness to experience develops curiosity and willingness to learn and experience new things among individuals that leads to innovation" (Goldsmith, 1991; Hurt et al., 1977). As a result, developing countries' demographic competitive advantage must be prepared by accelerating the expansion of the Fintech business ecosystem and developing Fintech infrastructure to encourage the transformation of SMEs in maximizing access to financial services in a responsible and sustainable way.

Point 2

English should be supported by "the Certificate of professional English proof reading service" of MDPI or other American companies. For example, the title, "Fintech Adoption Drivers and Innovation for SMEs in Indonesia" is really terrible because it does not give clear, precise, appropriate implications of the paper. Change it with "Fintech Adoption Drivers for Innovation of SMEs in Indonesia", -> similar, but totally different. Likewise, all the sentences are not "understandable" for global readers. Ask for professional help

Response point 2

Thank you very much for your suggestion and we have agreed to revise the title to “Fintech Adoption Drivers for Innovation of SMEs in Indonesia”. In addition, we also asked for help from a professional native English-speaking editor to check grammar, punctuation, and spelling. The certificate of language editing is attached.

Point 3

Introduction" does not show the research question clearly. Make it more clear, precise research objective.

Response point 3

Thank you for your feedback and we have revised the research question in the introduction sections.

This study investigates Fintech adoption drivers for SMEs in Indonesia by extending TAM with financial literacy, user innovativeness, government support, and trust during the COVID-19 pandemic in Indonesia.

Point 4

By the way, there are confusing in literature review in 1. introduction and 2. Literature review. Rewrite all more logically

Response point 4

Thank you for your feedback and we have managed the introduction and literature review to be more logical.

Literature Review

Despite the TAM has been applied by many previous studies and has proven empirically reliable to examine technology adoption (Wang, 2021; Thathsarani and Jianguo, 2022), Shachak et al. (2019) documented that other dimensions are needed to explore to provide comprehensive perspective in adopting new technology. Therefore, several studies extend TAM with several new variables such as technology anxiety and family support (Zheng and Li, 2020); social influence and perceived risk (Billanes and Enevoldsen, 2021); self-efficacy and perceived playfulness (Zhang et al. 2022) to name few. With reference to previous literature and recommendations from Fintech practitioners in Indonesia, this study incorporates several variables, including financial literacy, user innovativeness, government support, and trust, as additional dimensions of TAM (perceived usefulness and perceived ease of use).

Point 5

Figure 1 seems to be nice, but it shows "terrible misunderstanding in causal relationship among the variables". Make it more logically with inputs, middle intermediator(s) and outputs more clearly. Refer Y.J. Shin et al. (2019, Sustainability 2019, 11, 5351; doi:10.3390/su11195351).

Response point 5

Thank you for your comment and we have revised the Figure 1.

"(figure 1 in attachment)"

Point 6

In the social science research, the most important issue is not the accepted variables, but rejected variable(s). If the Table 7 reveals that five out of six direct hypotheses are supported except financial literacy (H3a), then, the paper should clarify why H3a is rejected and how the government policy should be changed for this rejected variable. Likewise, make it clearly for all rejected and/or marginally accepted variables as well as the weak variables with relatively low coefficient estimates.

Response point 6

Thank you for your comment and we have revised the explanation to clarify the rejection hypothesis of financial literacy (H3a) and explain the government policy response in addressing the rejected finding.

Surprisingly, financial literacy is not directly related to Fintech adoption for SMEs in Indonesia. This finding indicates that even though SMEs have an understanding of financial literacy, this does not directly affect the intention to adopt digital financial services, however, SMEs' innovation is required as a bridge to Fintech adoption. As a result, the government needs to establish an ecosystem that facilitates SMEs' innovation and creativity in order to encourage them to adopt Fintech.

Point 7

I cannot find any trial and errors of Indonesian practice in the conclusion. Does it mean Indonesia is wonderful in Fintech? Otherwise, explain more in details for Indonesian government to be considered more precisely.

Response point 7

Thank you very much for your recommendation and we have modified the conclusion.

Indonesia is the 4^th largest population with approximately 270 million people and separated by more than sixteen thousand islands provides an opportunity for Fintech to provide financial access. The opportunity for Fintech to develop market share and reach unbanked population in rural area is often constrained by technology infrastructure, which is still concentrated in big cities. Therefore the government needs to build technology infrastructure as a way to accelerate the growth and innovation of SMEs through inexpensive and near real-time financial services offered by Fintech.

Thank you for your comments and suggestions, we look forward to hearing back from you at your earliest convenience.

Best regards,

Authors

Author Response File: Author Response.pdf

Reviewer 2 Report

Dear author(s),
I appreciate your work; all the parts in the paper are adequate, from the introduction to the summary. It was interesting to read your opinion in the paper.

Best wishes for your future publications

Author Response

Dear Reviewer,

Thank you very much for your valuable comments and suggestions. We have revised our manuscript entitled “Fintech Adoption Drivers and Innovation for SMEs in Indonesia - Manuscript ID: JOItmC-2042941” according to the comment, as shown below:

Thank you very much for your comments and suggestions, 

Best regards,

Authors

Reviewer 3 Report

Fintech Adoption Drivers and Innovation for SMEs in Indonesia

 This article investigates the factors driving the intention to appeal to fintech services of SMEs in Indonesia. The study uses an extended TAM model and uses data from surveying 415 SMEs through online questionnaires. The results point to the fact that perceived usefulness, perceived ease to use, government support, trust, and user innovativeness to have a direct positive effect on the intention of SMEs to adopt Fintech.

The paper is quite straightforward and easy to read. The research questions are clear, there is a coherent presentation throughout the paper. The literature supporting the research is adequate. The conclusions make sense based on the results of the empirical analysis.

However, my main objection related to this research is related to the quality of the sample used – namely the 415 SMEs. There aren’t much details about how the sample was chosen and how representative are the firms that responded to the questionnaires. What about their geographical dispersion, the sector of the economy represented and so on. The results could be relevant for the sample used but how much is this relevant at a country level.  

This is a critical point of the research, which should be clarified rigorously before going forward. In my view, it is very important to have a representative sample or, if not, limit the conclusions to the firms with the same characteristics.

Author Response

Dear Reviewer,

Thank you very much for your valuable comments and suggestions. We have revised our manuscript entitled “Fintech Adoption Drivers and Innovation for SMEs in Indonesia - Manuscript ID: JOItmC-2042941” according to the comment, as shown below:

Thank you for your comments and suggestions, we look forward to hearing back from you at your earliest convenience.

Best regards,

Authors

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

The revised paper reflects well the comments of the reviewers, and thus it is now acceptable for the publication as it is.

Reviewer 3 Report

The authors clarified my concerns. I do not have other issues to raise.