Financial Technology Adoption Among MSMEs in Sarawak: An Extended TOE Conceptual Framework

Abstract

Micro, Small, and Medium Enterprises (MSMEs) constitute the economic backbone of Sarawak, driving employment, community resilience, and localized commercial growth. However, despite aggressive state-level digital initiatives such as the Sarawak Digital Economy Blueprint 2030, a substantial gap persists in the actual adoption of advanced Financial Technology (Fintech) solutions among local firms. Grounded in the Technology-Organization-Environment (TOE) framework, Diffusion of Innovation (DOI) theory, and Resource-Based View (RBV), this conceptual paper develops an extended structural model to evaluate the determinants of Fintech adoption and its subsequent impact on business performance. Crucially, the model introduces Financial Literacy and Trust as dual moderates that condition the relationship between TOE drivers and Fintech adoption. A quantitative methodology using Partial Least Squares Structural Equation Modeling (PLS-SEM) is proposed to test the hypothesized direct, moderating, and structural relationships using sample data from MSME business owners in Kuching, Sarawak. The proposed framework provides theoretical extensions to enterprise-level technology models while offering actionable insights for policymakers and financial institutions aiming to close regional digital divides.