Predictors of Digital Financial Inclusion among the Youths: An Empirical Evidence of Kampala-Uganda

Abstract

The study aimed to investigate the relationship between ICT usage, financial literacy, and digital financial inclusion among the youth in Kampala, Uganda. It primarily aimed to address the existing gap in understanding how these two variables, ICT usage and financial literacy, serve as predictors of digital financial inclusion, particularly among young populations who are often financially excluded. The investigation employed a cross-sectional research design, utilizing primary data collected through structured questionnaires from 294 youths in Kampala. Descriptives, correlation, and regression analyses were used to assess the relationships between ICT usage, financial literacy, and digital financial inclusion. The study’s key findings revealed that both ICT usage and financial literacy have significant positive effects on digital financial inclusion. Specifically, ICT usage and financial literacy were found to explain 42% of the variation in
digital financial inclusion. The remaining 58% could be attributed to other factors not included in this study. The findings pose significant implications for policymakers and stakeholders involved in financial inclusion initiatives. The study highlights the critical role that ICT plays in extending financial services to previously underserved populations, particularly in regions with limited access to traditional banking infrastructure. Moreover, the findings underscore the need to integrate financial literacy programs into digital financial
inclusion strategies. This approach would not only enhance youths’ capacity to use digital financial tools but also improve their financial well-being by fostering better financial decision-making, saving, and investment behaviors. This study contributes to the body of nowledge by providing further support for the relationship between ICT Usage, financial literacy, and digital financial inclusion among youth. It further unveils a new model that suggests and demonstrates that digital financial inclusion is primarily predicted by ICT Usage and financial literacy, which has not been explored in the digital financial inclusion literature, especially among youth in the context of developing countries. This adds to the Technology Acceptance Model and Systems Theory of Financial Inclusion, which emphasize the importance of technology and financial education in enhancing access to financial services.