Fintech and financial inclusion enhancing access to financial services

Abstract

This study investigates the how Fintech and Financial Inclusion enhancing access to financial services in Nepal, with a focus on the mediating role of digital financial literacy (DFL). Primary data were acquired from 385 FinTech users in Kathmandu Valley using structured questionnaires using a quantitative method with descriptive and causal study designs. Trust, service quality, perceived security, social influence, performance expectancy, and effort expectancy are among the key drivers explored, with FinTech use (FU) serving as the independent variable and financial inclusion (FI) as the dependent variable. Mediation study with PROCESS Macro (Model 4) demonstrates that FinTech adoption is highly associated with digital financial literacy and financial inclusion. Although digital financial literacy is a major predictor of financial inclusion, its mediation effect on the association between FinTech use and financial inclusion is non-significant. Trust, service quality, and effort anticipation positively impact financial inclusion, accounting for 32.7% of the variation (R² = 0.327). The total model is highly significant (F = 30.573, p < 0.001). These findings emphasize the independent importance of FinTech adoption and digital financial literacy in enhancing financial inclusion, and they recommend that stakeholders promote both aspects concurrently to optimize inclusive access to financial services in Nepal.

Keywords: Financial Inclusion, Financial Technology (FinTech), Digital Financial Literacy, Trust, Service Quality, Effort Expectancy, Mediation Analysis, Nepal