Investigating the determinants of Digital Financial Inclusion in South Africa

Abstract

Digital Financial Inclusion has emerged as a prominent global agenda, necessitating an exploration of the transformative influence of technology on financial service accessibility. Previous research has attempted to uncover the true factors that impact Digital Financial Inclusion, however, there is further opportunity to better understand the underlying factors. To contribute to the body of knowledge, this study seeks to uncover factors of successful Digital Financial Inclusion that may contribute towards the implementation of key strategies. To achieve this goal, the study employs a multidimensional financial inclusion framework that explores the impact of access, barriers, and usage on Digital Financial Inclusion. Additionally, it expands the framework to include digital readiness and financial literacy, enhancing the depth of the investigation. Utilising a quantitative approach, data for the study was obtained through a self- administered online survey, yielding 231 valid responses for analysis. The Structural Equation Model (SEM) was used to investigate the relationship between user readiness, financial literacy, barriers, access, usage, and Digital Financial Inclusion. The findings indicate insufficient statistical evidence to suggest a significant relationship between user readiness, access and barriers, and Digital Financial Inclusion. However, the study underscores that financial literacy and usage have a positive and significant influence on Digital Financial Inclusion. To enhance Digital Financial Inclusion, financial literacy and usage should be leveraged as key drivers for adoption. Additionally, policy makers, financial service providers and technology developers need to focus on targeted interventions, and inclusive regulatory frameworks