Best Practice Synthesis for Designing Literacy Inclusive Digital Financial Products in Microfinance Contexts

Savings and Credit Co-operative Societies (Saccos) in Kenya have realised a tremendous growth in the subsector and are investing huge amount of their scarce financial resources in digital technology to enhance services delivery and offer a wide variety of products and services range, increased membership mobilisation and size, ensure better structure and effective financial performance. Digital financial Services as used in the Saccos industry is as a result of Information Communication Technology revolution commonly referred to as digital commerce. Many Saccos are steadily changing from manual banking system of operations to providing digital Financial (e-banking) services that include internet banking, M-banking and Automated Teller machine support. The adoption of digital financial Services by the Saccos is a strategic attempt to deal with increased cut throat competition from traditional banking institutions and non-banking financial institutions, to cut costs and add value to their services in order to optimise benefits to the shareholders. Despite the fact that Saccos have rapidly adopted digital financial services to provide services, and that they drive a huge section of the financial sector savings of the economy, they have experienced various challenges such as uncertainty and risk due to digital financial services. The study sought to establish the influence of digital financial services on the financial performance of SACCOs in Kakamega County, Kenya. The specific objectives was to determine the effect of the mobile banking, internet banking, use of credit cards and digital funds transfer on the financial performance of SACCOs in Kakamega County, Kenya. The research was guided by three theories of innovation and technology: Diffusion of Innovation Theory, The Theory of Task-Technology Fit Theory and the Technological context, Organisational context and Environmental context Theory.The study used a descriptive research design. The population of study were staff at the three SACCOs operating in Kakamega County. This consisted of 162 respondents who are the staff of the SACCOs. A sample of 49 respondents was taken which forms 30% of the target population which shall be evenly spread across the three SACCOs. The primary data was collected by use of self-administered semi-structured questionnaire.Collected data was analysed through descriptive and inferential statistics by the use of SPSS. Findings were presented by use of tables, frequencies, percentages, means and standard deviation.The study found that the financial performance of the SACCOs was significantly influenced by the digital financial services instituted by the SACCO managements. They demonstrated to have reliable mobile banking system where most of their customers had enrolled on the mobile banking platform and most of customer queries and updates were sorted via the mobile platform.Given the limitations and findings of this study, the researcher recommends that since there exists a positive relationship between digital financial services and bank performance and that e-banking has brought services closer to bank customer’s hence improving banking industry performance, SACCOs must also enhance the dynamics of the sector and embrace digital banking fully and extensively. Mobile banking faces various challenges among them being, system delays by the mobile money transfer service providers, slow processing of transactions, high transactions costs, limit on the amount of money that can be withdrawn in a day and fraud.

Purpose: This study evaluates the impact of digital financial tools and services on financial inclusion for small-scale businesses, focusing on the Kozhikode district in Kerala, India. Financial inclusion is recognised as an enabler of economic growth and poverty reduction. Literature highlights that mobile banking, fintech, and digital payment platforms can transform access to finance for underserved firms. However, barriers such as low digital literacy, high transaction costs, and weak infrastructure often hinder the adoption of these innovations.Methodology: Following a descriptive research design, a structured questionnaire was administered to 57 small-scale business owners across retail, agriculture, manufacturing, and service sectors. Descriptive and inferential statistics (percentage distributions, t-tests, and chi-square tests) were used to analyse the data.Findings: The findings indicate that 73.7% of businesses held formal bank accounts (formal inclusion), while 26.3% remained excluded. Most (91.2%) reported using digital financial services regularly, with mobile banking apps as the most preferred platform. Common challenges included high transaction costs, poor internet connectivity, and limited digital literacy. Statistical tests found no significant differences in perceptions by gender, age, or education (p>0.05), suggesting similar experiences across demographic groups.Implications: This study underscores the pivotal role of financial services, especially digital tools, in empowering small-scale businesses, particularly in underserved areas. Financial inclusion promotes economic stability, reduces poverty, and supports entrepreneurship by enhancing access to credit, savings, and insurance. The research highlights the need for inclusive policies and infrastructure to ensure effective adoption of digital finance, improve service delivery, and lower transaction costs. Practical insights can guide policymakers and financial institutions in fostering a supportive ecosystem that boosts small business growth and contributes to broader socioeconomic development.

The digital economy is rapidly expanding globally, with the potential to significantly boost socio-economic development, particularly in developing countries. The banking industry is significantly investing on introducing digital financial services especially in developing countries like Ethiopia ultimately to achieve financial inclusion goals. Hence, this study was aimed to investigate the effect of digital financial services (DFS) for financial inclusion in Ethiopia. For this purpose, secondary data was collected from the National Bank of Ethiopia, the study specifically focused on seventeen commercial banks (panel units) from the year 2014/15 to 2023/24. The random effect model was applied to estimate the effect of explanatory variables on the variable of interest based on Hausman test results and after testing all possible assumptions of the model. Accordingly, the finding revealed that Mobile banking, ATMs, POS terminals, and Mobile Wallet Banking all has a positive and significant effect on the number of financial accounts in Ethiopia. These services are driving financial inclusion by increasing access to banking services and facilitating the opening of accounts. Internet banking appears to have a negative impact on the number of accounts, which might reflect limited access to or use of internet banking in Ethiopia, possibly due to issues like connectivity or low digital literacy. The authors propose that enhancing the adoption of digital financial services (DFS) in both rural and urban areas could play a crucial role in advancing financial inclusion. They argue that such an increase would directly support the financial inclusion strategies of policymakers and banking practitioners. By improving access to digital financial tools, individuals in these regions often underserved by traditional banking systems could be integrated into the formal financial sector.

PurposeFinancial inclusion plays an essential role in today’s modern era. There has been a growing recognition that financial inclusion is an important enabler in poverty reduction. It is an essential tool in enabling inclusive growth and reducing poverty. This study aims to identify the barriers that limit customers to use digital financial services (DFS) in Pakistan. Second, this study aims to spread awareness of DFS and benefits of digital financial inclusion and services to retain customers in Pakistan. Third, the study purposes to retain old customers toward DFS in Pakistan.Design/methodology/approachThis study is qualitative phenomenology study. The data were collected through interviews (i.e., online or face-to-face, depending on participants convenience). The sample comprised respondents with different age and different nature of work. Before conducting actual interviews, the interview questions were validated by three experts working in the State Bank of Pakistan in the relevant field. The interviews took from those individuals who were have digital financial account, but not using it due to some reasons. Data analysis carried out by using the NVivo software to deliver the themes after analyzing the data by querying, visualizing and coding.FindingsThe study categorized s6 themes as second order themes including dependency, illiteracy, lack of trust, cost, lack of access to financial services and financial instability by emerging 16 subject themes as 1st order themes. It including financial illiteracy, digital illiteracy, lack of knowledge, depend on spouse, depend on parents/children, depend on siblings, fear, security issues, privacy issues, lack of internet access, lack of account access, unemployment, low income, high expenses, other cost and transaction cost. These barriers limit DFS adoption and its use. This study found that 90% respondents were financial illiterate and 80% respondents do not have the knowledge of new recent e-payment system.Originality/valueHowever, this study contributes to reducing these barriers and spreading knowledge about financial inclusion and DFS. From a managerial perspective, additional attention needs to be devoted to the adoption of financial inclusion and innovation in DFS.

The world of finance has long been shrouded in complexity, creating an impediment for the economically vulnerable and less powerful populations in developing and emerging economies who lack the resources or knowledge to access it. However, with the evolving digital landscape coupled with digital financial innovation, these barriers are beginning to crumble. From digital banking apps to mobile money platforms, digitization is revolutionizing access to financial services like never before. Digital financial services (DFS) have emerged as a critical enabler of financial inclusion, bridging the longstanding gaps in access, usage, and affordability of financial services that previously existed in traditional brick-and-mortar financial systems. In Liberia, where access to financial services is limited or unavailable for the population residing in rural and semi-urban areas of the country, digital financial services provide a vital lifeline for financial inclusion. Through a descriptive correlation quantitative research design, this study examines the impact of digital financial services adoption on financial inclusion in Liberia from 2011 to 2024. Using secondary cross-sectional data collected from the central bank of Liberia's annual reports (2016-2024) and the World Bank's Findex global database (2011-2024), the study results show a direct positive correlation between digital financial services and financial inclusion in Liberia, characterized by a shift towards digital financial services and an increase in banked individuals. The research findings also highlight that the adoption rate of digital financial services has increased considerably, thereby expanding financial inclusion in Liberia from 18.18% in 2011 to 52.21% in 2024. Notwithstanding, despite the DFS's potential to enhance financial inclusion in Liberia, the study identified several challenges and limitations hindering the widespread adoption of digital financial services in Liberia. These include inadequate digital public infrastructure (DPI), limited financial and digital literacy, security and privacy concerns, and regulatory and policy issues. Thus, the paper recommends that the Government of Liberia should augment Liberia's digital public infrastructure (DPI), strengthen the digital regulatory framework, enhance financial and digital literacy programs, and promote stakeholders' collaboration for more comprehensive financial inclusion through digital financial services in Liberia.

It has become a critical strategy in terms of increasing financial inclusion in developing countries, combating poverty, reducing economic development and income inequality (Demirgüç-Kunt et al., 2018). In this context, Digital Financial Services (DFH) supports inclusiveness by providing a strong alternative for individuals who do not have access to traditional banking systems (Ozili, 2018). Digital vehicles such as mobile banking, digital wallets, credit services over the internet and fintech applications facilitate the integration of individuals living in low -income and rural areas into the financial system (GSMA, 2021). In this study, the impact of digital financial services on financial inclusion in developing countries was examined by literature screening method. The studies discussed; It shows that factors such as the development of digital infrastructure, regulatory frames, digital literacy level and gender inequality significantly affect the inclusion levels (Sahay et al., 2020). Furthermore, it has been found that the spread of digital financial instruments provides economic benefits at micro and macro level (Lukogga, 2020). This article argues that digital financial transformation should be considered as an inclusive development model in developing countries and provides strategic suggestions for policy makers.

Financial inclusion is increasingly recognized as a cornerstone of inclusive economic growth and poverty alleviation, especially in developing economies. In Nepal, the expansion of digital financial services (DFS)—including mobile banking, digital wallets, and interoperable payment systems—has transformed access to financial products, particularly for rural and marginalized populations. This paper examines how DFS has driven financial inclusion in Nepal between 2020 and 2025 by synthesizing secondary data from national policy frameworks, financial inclusion indices, and empirical research. Results indicate that the proliferation of mobile and internet penetration, coupled with strong regulatory initiatives such as the National Payment System Development Strategy and Retail Payment Strategy, has elevated account ownership and usage among adults from 58% in 2017 to 83% in 2023. DFS has also narrowed gender and geographic divides, facilitated remittance digitization, and enhanced resilience among low-income households. Despite these advances, challenges persist in digital literacy, affordability, cybersecurity, and gendered social barriers. The study concludes that inclusive DFS growth in Nepal depends on continued investment in digital infrastructure, regulatory innovation, and targeted literacy programs to ensure equitable access and sustainable impact.

As digital financial services (DFS) become increasingly important in personal financial management, understanding their implications for individual well‐being is critical. Although prior research has focused on financial inclusion and digital finance access, less is known about the mechanisms through which DFS influence broader well‐being outcomes. This study examines the relationship between DFS use, financial well‐being, and life satisfaction, with financial well‐being conceptualized as a mediating factor. Data were drawn from a sample of 1552 Korean adults aged 25–59 who completed an online survey and provided valid responses for analysis. Financial well‐being was assessed with the Consumer Financial Protection Bureau's financial well‐being scale, and life satisfaction was measured using Cantril's ladder and the feeling thermometer. Mediation analyses reveal that DFS use is positively associated with financial well‐being, which in turn significantly influences life satisfaction. Importantly, the relationship between DFS use and life satisfaction is fully mediated by financial well‐being, with no significant direct effect once financial well‐being is accounted for. This mediation pathway is driven primarily by transactional DFS—such as mobile banking, payments, and credit card management—rather than investment‐oriented DFS. These findings suggest that the well‐being benefits of DFS arise from the ways digital services enable individuals to manage routine financial matters more effectively. This study highlights the importance of designing inclusive DFS platforms that enhance financial well‐being as a pathway to improving life satisfaction.

Financial inclusion has become an important objective for both developed and developing economies, as access to financial services plays a significant role in economic growth and social development. In recent years, Financial Technology (FinTech) has emerged as a transformative force in improving financial accessibility, affordability, and efficiency. This research paper examines the role of FinTech in promoting financial inclusion through digital financial services such as mobile banking, digital wallets, online lending platforms, and digital payment systems. The study is entirely based on secondary data collected from journals, research articles, government reports, books, and reliable online sources. The paper highlights how FinTech solutions have helped underserved and unbanked populations gain access to formal financial systems, especially in rural and remote areas. It also discusses the major benefits, challenges, and future opportunities associated with FinTech adoption. The findings of the study indicate that FinTech has significantly contributed to expanding financial services, increasing digital transactions, and improving financial literacy, thereby supporting inclusive economic development. However, issues related to cybersecurity, digital literacy, and regulatory frameworks continue to remain major concerns. The study concludes that with proper policies, technological infrastructure, and awareness initiatives, FinTech can become a powerful tool for achieving sustainable financial inclusion.

This study examines the key factors influencing financial literacy, digital literacy, and digital infrastructure in the adoption of digital financial services (DFS) within Tharparkar District. Despite the increasing significance of DFS in promoting financial inclusion, uptake in rural and underdeveloped areas remains low due to socio-economic and infrastructural constraints. A quantitative research design was employed, using summary statistics, multiple regression analysis, Pearson correlation analysis, and ANOVA to analyse primary data collected from 211 respondents. The study explores the relationship between financial literacy, digital literacy, and DFS adoption, considering various demographic factors such as gender, age, and social rank. The findings indicate that both financial and digital literacy significantly influence individuals’ intention to adopt DFS, thereby enhancing confidence in mobile banking, online transactions, and e-wallet usage. However, weak digital infrastructure, including slow internet connectivity and limited digital service providers, poses a significant barrier, particularly in rural regions of Tharparkar. Additionally, the study identifies gender disparities in DFS adoption, with women facing challenges due to lower digital literacy and restrictive cultural norms. The study emphasizes the need for targeted policy interventions, financial education programs, and digital infrastructure development to bridge the digital divide and promote financial inclusion in rural areas. Addressing these barriers can improve economic participation and enhance financial access for marginalized communities in Tharparkar. This research contributes to the understanding of the factors influencing DFS adoption in rural areas, providing insights into the role of literacy and infrastructure in enhancing financial inclusion, particularly for underserved populations in Tharparkar District.

Khera et al. (2022) provides a novel measurement of digital financial inclusion using a three-stage principal component approach (PCA) for 52 emerging market and developing economies. Based on this new index, they have found that the adoption of digital financial services has been a key driver of financial inclusion, and countries/regions in Africa and Asia and regions have achieved greater progress. They also warn against a digital divide and call for policies to close the gap. The novelty of this new index rests on three characteristics: it is focused; it is comprehensive, and it utilizes the PCA approach. This index focuses on the payment aspects of financial inclusion, and considers the “access” and “usage” aspects of both digital and traditional aspects of financial inclusion. The three-stage PCA approach first extracts the supply-side and demand-side aspects of financial inclusion for both traditional and digital financial services, then extracts the principal components of the access and usage indices for the traditional and digital financial inclusion, respectively, and finally builds up a comprehensive index encompassing all these subcomponents. The constructed index provides a good chance to measure the level of the adoption of digital financial services in a specific country, and hence provides an instrument for evaluating the policy implications of financial inclusion, especially digital financial inclusion. For example, the subindex provides a chance to evaluate the severeness of the digital divide and the risk of financial exclusion. The indices show wide variations in digital financial inclusion across countries, whether it is mainly driven by a reluctance in constructing more digital financial infrastructure due to financial constraints, or a distrust of digital technology will need further investigation. Overall, this index has great potential for deepening our understanding of the relationships between comprehensive financial inclusion, digital financial inclusion as well as traditional financial inclusion. In this aspect, Khera et al. (2022) may wish to provide more discussions so that the importance of subindices can be better appreciated. For example, Khera et al.’s Figures 1 and 2 indicate that African countries excel in digital financial inclusion, so it would be insightful to explain which of the access and the usage components are relevant in promoting the development in digital financial inclusion. Another example is Khera et al.’s Figure 3 that contains the interesting finding, namely, for countries with low traditional financial inclusion, the variance of traditional financial inclusion is larger than the variance of countries with high-traditional financial inclusion. This implies that efforts in pursuing digital financial inclusion vary more in countries with low levels of traditional financial inclusion. Some additional empirical evidences may also help to convince readers about the validity of this index. For example, Khera et al.'s (2022) Figure 3 ranks Mongolia as the most advanced country in terms of both comprehensive as well as digital financial inclusion, and their Figure 4 shows that Ghana ranks No. 1 in improvements of digital financial inclusion. Presentations of some statistics about access and usage, and the development in traditional financial inclusion between 2014 and 2017 of these two countries would be helpful. Some robustness checks may also help readers and users to appreciate the importance of this index. For example, one way to construct the index is to apply the PCA approach to all the variables in one stage instead of in three stages. Such a strategy can avoid the prediction errors caused by treating the first-stage and second-stage indices directly as raw data, and can also provide readers with a broader view about the financial inclusion status quo.

The rapid advancement of digital financial services has reshaped the global financial ecosystem, offering enhanced accessibility and efficiency while also requiring users to possess a certain level of financial and digital literacy. This study aims to examine the impact of digital financial services on financial literacy in the city of Banjarmasin, South Kalimantan, Indonesia. Employing a quantitative research design, data were collected from 100 users of mobile and internet banking services at Bank Kalsel through structured questionnaires. Analysis was conducted using descriptive and simple linear regression methods. The findings reveal a strong positive relationship between digital financial services and financial literacy, with an elasticity coefficient of 8.172 and a correlation coefficient (R) of 0.662. The coefficient of determination (R² = 0.438) indicates that 43.8% of the variation in financial literacy is explained by digital financial services. These results underscore the importance of digital financial inclusion, technology adoption, and service quality in enhancing users' financial knowledge, skills, and behavior. The study recommends integrated efforts from the government, financial institutions, and digital service providers to develop inclusive, user-friendly, and secure digital platforms, supported by targeted financial education programs to promote financial empowerment and reduce socio-economic disparities in South Kalimantan.

PurposeThis paper aims at analysing the socio-economic characteristics, mobile phone ownership and banking behaviour as key determinants of digital financial inclusion in India.Design/methodology/approachThis study is based on the Global Findex Survey of the World Bank covering 3,000 adult individuals in India. Simple statistical tools such as descriptive statistics, chi-square test and regression analysis with a marginal effect have been used for the data analysis.FindingsAbout 35.2% of respondents have reported using digital financial services in the country. There is a significant association between the socio-economic profiles of individuals with the adoption of digital financial services in terms of gender, age, education, occupation and income. The marginal effect indicates that socio-economic factors, mobile phone ownership and banking behaviour of individuals towards borrowings and savings have indicated significant influence on digital financial inclusion. The analysis depicts that male with higher age, education, working status and higher income are more likely to adopt digital financial services. Further, individuals with mobile phone ownership and utilising banking in terms of borrowings and savings are more likely to adopt digital financial services.Practical implicationsAs digital banking services have emerged as a preferred channel for financial service delivery, this study provides timely insights on developing user driven-strategies for promoting digital financial services.Originality/valueSocio-economic characteristics, mobile phone ownership and banking behaviour are critical determinants of financial inclusion, so assessing its implications in the era of digitisation becomes imperative.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2022-0673.

Financial inclusion remains a significant challenge globally, especially in developing economies like Nigeria. The advent of digital financial services (DFS) has been touted as a potential solution to this challenge. However, the impact of DFS on financial inclusion is yet to be fully understood, and existing studies have yielded mixed findings. This study investigates the relationship between DFS and financial inclusion in Nigeria, with a focus on access, usage, efficiency, and inclusion. Using an ex post facto design with a quantitative approach, the study anchored on the vulnerable group theory analysed data obtained from the Statistical Bulletin of Central Bank of Nigeria for the period 2010–2023. The Ordinary Least Squares was used to run the regression analysis after carrying out several diagnostic checks. Our results show that Agency Banking, Automated Teller Machine transactions, Point of Sale Facilities, and Mobile Banking services can be powerful tools for promoting financial inclusion in Nigeria, but that USSD transactions have a minimal effect on financial inclusion in Nigeria suggesting that improved access, usage, and efficiency of these digital financial services instruments will enhance financial inclusion in Nigeria. The study contributes to the existing literature by providing insights to how DFS tools influence financial inclusion in the context of a developing economy like Nigeria. The originality of the study stems from its contributions to extant literature as it provides evidence of the positive influence of DFS on financial inclusion in Nigeria, a context that has received limited attention. The study findings also have important implications for policymakers and financial services providers that seek to promote financial inclusion through digital financial services.

This chapter explores digital financial inclusion strategies for rural and urban communities in Botswana, Namibia, South Africa, and Zimbabwe. Financial inclusion has taken centre stage in academic discourses due to its criticality in enhancing socio-economic development. Digital financial services refer to services that are made available through mobile phones and the internet. The World Bank indicates that in developing countries, more households own mobile phones as compared to those who access water and electricity which highlights high mobile penetration rates in developing countries. Digital financial services are key in enhancing financial inclusion, by including the previously marginalised people into the formal financial system. Statistics reveal that more than 60 percent of the global population now has access to digital financial services hence regulators and policymakers must focus on this burgeoning issue. Huge disparities are evident in the levels of digital financial inclusion between the rural and urban communities for the countries under study, largely because of the marginalisation of rural communities and their depressed spending patterns. Proposed digital financial strategies should, therefore, address this anomaly and include the rural communities into the manifold of digital services to ameliorate the vagaries of poverty rampant in rural communities.