Investigating the effect of financial literacy on financial inclusion: Mediating role of financial technology

Ellen Rusliati, Agus Supandi Soegoto, Dwi Martutiningrum, Dudung Ahmad Suganda, Difi Dahliana, Yulinda Yulinda, Pascalina Van Sweet Sesa

Article ID: 5193
Vol 8, Issue 7, 2024

VIEWS - 1772 (Abstract)

Abstract


This research aims to analyze the relationship between financial literacy variables and financial inclusion, the relationship between financial literacy variables and financial technology, and the relationship between financial technology variables and financial inclusion. The analysis of this research is to learn more about how financial literacy and the use of financial technology influence financial inclusion. This type of research is associative quantitative. Next, the relationship between these variables is explained using statistical formulas. Consequently, the term for this research is “quantitative research”. The study population is the number of people who use financial services. For this sampling, the purposive random sampling method was used. The following criteria are determined in sampling: 1) Minimum age 17 years, this is intended to take the minimum age standard in sampling and is considered capable of understanding the contents of the questionnaire statements. 2) Have ever used financial services. In this study, 11 question items were used to measure 3 variables, so this study used the largest range, namely 231 respondents. The intervention variable will be used as a reference for the Partial Least Square (PLS) method to analyze this research data. This study uses a causal model (causal modelling, relationships, and influence) or path analysis. The hypothesis that will be discussed in this research is tested using the Structural Equation Model (SEM), which is operated with Smart PLS. The results of this research show that financial literacy has a positive and significant impact on financial inclusion in society. Financial literacy has a positive and significant impact on financial technology. financial technology has a positive and significant impact on financial inclusion, financial technology can offset the impact of financial literacy on financial inclusion. The results of this research are used as input for the community so that they pay more attention to their internal human resources related to financial products that can be used for investment. With knowledge of the right financial products, it is hoped that they can create good financial behaviour so that an awareness of the importance of carrying out good financial planning. For financial institutions, it is hoped that this can increase easy access to financial products and services, in particular credit for businesses as additional capital for the community.


Keywords


financial literacy; financial inclusion; financial technology; SMEs; SEM, Indonesia

Full Text:

PDF


References


Asmana, Y., Tukiran, M., Sukardi, S., & Zainuddin, Z. (2024). Factors that influence banking performance: a narrative literature review. UJoST- Universal Journal of Science and Technology, 3(1), 69–73. https://doi.org/10.11111/ujost.v3i1.141 Asyik, N. F., Wahidahwati, W., & Laily, N. (2022). The Role of Intellectual Capital in Intervening Financial Behavior and Financial Literacy on Financial Inclusion. Wseas Transactions on Business and Economics, 19, 805–814. https://doi.org/10.37394/23207.2022.19.70 Bansal, S. (2014). Perspective of technology in achieving financial inclusion in rural India. Procedia Economics and Finance, 11, 472–480. Bhuvana, M., & Vasantha, S. (2019). Ascertaining the mediating effect of financial literacy for accessing mobile banking services to achieve financial inclusion. International Journal of Recent Technology and Engineering, 7(6), 1182–1190. Cohen, M., & Nelson, C. (2011). Financial literacy: A step for clients towards financial inclusion. Global Microcredit Summit, 14(17), 1–34. Desai, K., Umasankar, M., & Padmavathy, S. (2022). FinTech: Answer for Financial Literacy and Financial Inclusion in India. ECS Transactions, 107(1), 15317–15327. https://doi.org/10.1149/10701.15317ecst Gautam, R. S., Rastogi, S., Rawal, A., et al. (2022). Financial Technology and Its Impact on Digital Literacy in India: Using Poverty as a Moderating Variable. Journal of Risk and Financial Management, 15(7), 311. https://doi.org/10.3390/jrfm15070311 George, R. R., & Pathanamthitta, K. (2020). A Study on Digital Financial Literacy: A precedent for improved Financial Literacy and Financial Inclusion. Journal of Emerging Technologies and Innovative Research, 7(6), 1531–1547. Hapsari, A. A., & Puspitasari, D. M. (2024). The Influence of Financial Technology on the Advancement of Financial Inclusion in Micro, Small, and Medium Enterprises (MSMEs) in West Java. Accounting Studies and Tax Journal (COUNT), 1(1), 48–60. https://doi.org/10.62207/5v4t9q48 Hasan, M., Le, T., & Hoque, A. (2021). How does financial literacy impact on inclusive finance? Financial Innovation, 7(1). https://doi.org/10.1186/s40854-021-00259-9 Hasan, M., Noor, T., Gao, J., et al. (2022). Rural Consumers’ Financial Literacy and Access to FinTech Services. Journal of the Knowledge Economy, 14(2), 780–804. https://doi.org/10.1007/s13132-022-00936-9 Haudi, H., Rahadjeng, E. R., Santamoko, R., et al. (2022). The role of e-marketing and e-CRM on e-loyalty of Indonesian companies during Covid pandemic and digital era. Uncertain Supply Chain Management, 10(1), 217–224. https://doi.org/10.5267/j.uscm.2021.9.006 Hussein, H. (2020). The impact of financial technology on financial inclusion: the case of Egypt. IOSR Journal of Economics and Finance, 11(6), 35–51. Irman, M., Budiyanto, B., & Suwitho, S. (2021). Increasing Financial Inclusion Through Financial Literacy and Financial Technology on MSMEs. International Journal of Economics Development Research (IJEDR), 2(2), 126–141. https://doi.org/10.37385/ijedr.v2i2.273 Jaya, I. M. L. M. (2019). The Impact of Financial Inclusion on Public Financial Services Education through Financial Technology in Sleman Regency, Indonesia. Esensi: Jurnal Bisnis Dan Manajemen, 9(2), 155–174. https://doi.org/10.15408/ess.v9i2.13576 Juwaini, A., Chidir, G., Novitasari, D., et al. (2022). The role of customer e-trust, customer e-service quality and customer e-satisfaction on customer e-loyalty. International Journal of Data and Network Science, 6(2), 477–486. https://doi.org/10.5267/j.ijdns.2021.12.006 Khan, F., Siddiqui, M. A., & Imtiaz, S. (2022). Role of financial literacy in achieving financial inclusion: A review, synthesis and research agenda. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2034236 Kurniawan, W., & Soediantono, D. (2022). The Role of Digital Transformation and Leadership Style on Financial Performance of Defense Industries. Journal of Industrial Engineering & Management Research, 3(3), 111–119. https://doi.org/10.7777/jiemar.v3i3.291 Martini, M., Triharyati, E., & Rimbano, D. (2022). Influence Financial Technology, Financial Literacy, and Intellectual capital on financial inclusion in Micro, Small and Medium Enterprises (MSMEs). Ilomata International Journal of Tax and Accounting, 3(4), 408–420. https://doi.org/10.52728/ijtc.v3i4.572 Muhajir, M., Mukaromah, H., Fathudin, F., et al. (2022). The role of buzz and viral marketing strategic on purchase intention and supply chain performance. Uncertain Supply Chain Management, 10(2), 637–644. https://doi.org/10.5267/j.uscm.2021.11.002 Pandey, A., Kiran, R., & Sharma, R. K. (2022). Investigating the Impact of Financial Inclusion Drivers, Financial Literacy and Financial Initiatives in Fostering Sustainable Growth in North India. Sustainability, 14(17), 11061. https://doi.org/10.3390/su141711061 Rahadjeng, E. R., Pratikto, H., Mukhlis, I., et al. (2023). Analysis of Financial Technology, Financial Literacy, Financial Attitudes, on Mediated Business Performance Financial Inclusion and Self-Efficiency in Small Medium Industry (SMI) in Malang City, Indonesia. International Journal of Professional Business Review, 8(8), e03041. https://doi.org/10.26668/businessreview/2023.v8i8.3041 Sisharini, N., Hardiani, S., & Ratnaningsih, C. S. (2019). Increasing financial literacy and financial inclusion model to achieve MSMEs financial well being. International Journal of Scientific and Technology Research, 8(10), 314–317. Telukdarie, A., & Mungar, A. (2023). The Impact of Digital Financial Technology on Accelerating Financial Inclusion in Developing Economies. Procedia Computer Science, 217, 670–678. https://doi.org/10.1016/j.procs.2022.12.263 Wijayaa, O. Y. A., Sulistiyanib, S., Pudjowatic, J., et al. (2021). The role of social media marketing, entertainment, customization, trendiness, interaction and word-of-mouth on purchase intention: An empirical study from Indonesian smartphone consumers. International Journal of Data and Network Science, 231–238. https://doi.org/10.5267/j.ijdns.2021.6.011 Wufron, W., Susilawati, W., Akbari, R. A., & Hadita, A. (2023). The Financial Inclussion of The Garut District Society is Analyzed through Financial Literacy and The Use of Fintech. Jurnal Wacana Ekonomi, 22(3), 292–302.



DOI: https://doi.org/10.24294/jipd.v8i7.5193

Refbacks



Copyright (c) 2024 Ellen Rusliati, Agus Supandi Soegoto, Dwi Martutiningrum, Dudung Ahmad Suganda, Difi Dahliana, Yulinda, Pascalina Van Sweet Sesa

License URL: https://creativecommons.org/licenses/by/4.0/

This site is licensed under a Creative Commons Attribution 4.0 International License.