ARTIFICIAL INTELLIGENCE-ENABLED FINANCIAL SERVICES AND FINANCIAL INCLUSION AMONG RURAL MSMES

Abstract

Financial inclusion remains a major challenge for rural micro, small, and medium enterprises (MSMEs) in Indonesia despite the rapid advancement of digital financial technologies. This study aims to examine the effect of artificial intelligence-enabled financial services on financial inclusion among rural MSMEs in Indonesia. The study employed a quantitative approach using survey data collected from 200 rural MSME owners in Tanjung Morawa Village, Medan, Indonesia. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The study findings indicate that the adoption of artificial intelligence-enabled financial services has a positive and significant effect on financial inclusion, demonstrating good predictive capability of the research model. The findings further reveal that AI-enabled financial services improve access to formal financial services, enhance transaction efficiency, and support better financial management among rural MSME owners. These results highlight the importance of developing AI-based financial solutions to strengthen financial inclusion and promote more inclusive rural economic development in Indonesia. The study also contributes to the growing body of literature on digital finance and provides practical implications for policymakers, financial institutions, and financial technology providers in designing more inclusive and sustainable financial services for rural MSMEs