Integrating Financial Technology, Behavioral Finance, and UTAUT to Develop a Sustainable Finance and Circular Economy-Based Digital Financing Ecosystem for Generation Z MSMEs

Abstract

The rapid advancement of financial technology (FinTech) has created new opportunities to enhance financial accessibility and sustainability for Micro, Small, and Medium Enterprises (MSMEs). However, digital financing adoption among Generation Z entrepreneurs is influenced by technological, behavioral, and sustainability-related factors. This study aims to examine an integrated digital financing ecosystem by combining Financial Technology, Behavioral Finance, the Unified Theory of Acceptance and Use of Technology (UTAUT), Sustainable Finance, and Circular Economy. A quantitative approach was employed using a cross-sectional survey of 396 Generation Z MSME owners in Indonesia. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that the proposed model is valid, reliable, and effectively explains digital financing adoption. Performance expectancy emerged as the strongest factor influencing behavioral intention, followed by financial technology, sustainable finance, effort expectancy, circular economy, behavioral finance, social influence, and facilitating conditions. Furthermore, behavioral intention significantly promotes the actual use of digital financing services. These findings suggest that successful digital financing adoption requires not only technological readiness but also behavioral awareness, institutional support, and sustainability orientation. The study extends the UTAUT framework by integrating behavioral and sustainability perspectives and provides practical implications for developing inclusive and sustainable digital financing ecosystems for Generation Z MSMEs.