Exploring the Power of Financial Self-efficacy in Acceleration of Financial Inclusion among Adults


  • Yusra Shehzadi PhD Scholar, Institute of Business Management, Karachi, Pakistan.
  • Kiran Jameel Assistant Professor, Institute of Business Management, Karachi, Pakistan.




Digital Consumer Protection, Financial Self-efficacy, Financial Literacy, Financial Inclusion, Pakistan


The problem of financial exclusion still persists in the fifth most populous state of the world, i.e., Pakistan which pose a significant threat to the Pakistan’s economic development. This research applies the idea of financial inclusion in an effort to examine the factors that contribute to adults' levels of financial inclusion. One of the variables that will be used in this investigation is financial self-efficacy, which will serve as a mediator. Using a method known as purposive sampling, this study collects data from a total of 406 adult inhabitants of Pakistan over the course of five months, beginning in January 2023 and ending in May 2023. The survey itself is in the form of a questionnaire. For the purpose of scale validation, confirmatory factor analysis was used, whereas structural equation modeling was performed for the purpose of testing hypotheses. A bootstrap method based on percentiles and a confidence interval of 95% was used to test mediation. According to the findings of the research, a person's level of financial self-efficacy serves as an essential and substantial mediator between the association between 1) Financial literacy and financial inclusion, and 2) Digital consumer protection and financial inclusion. In addition, it was shown that an increase in financial literacy, the utilization of mobile money, and digital consumer protection all substantially led to an increase in financial inclusion. The findings of the research give significant advice for policymakers to enhance financial inclusion in the context of developing countries by enhancing financial literacy programs and implementing strong consumer data protection laws. This may be accomplished by improving financial inclusion in the context of developing countries.


AFI. (2015). Maya Declaration Report: Commitments into Action. Kuala Lumpur, Malaysia: Alliance for Financial Inclusion. Retrieved from https://www.afi-global.org/sites/default/files/publications/maya_report_2015-final.pdf

Akakpo, A. A., Amidu, M., Coffie, W., & Abor, J. Y. (2022). Financial literacy, financial inclusion and participation of individual on the Ghana stock. Cogent Economics & Finance. doi:https://doi.org/10.1080/23322039.2021.2023955

Apiors, E. K., & Suzuki, A. (2022). Efects of Mobile Money Education on Mobile Money Usage: Evidence from Ghana. The European Journal of Development Research.

Arestoff, F., & Venet, B. (2017). Learning to walk before you run : Financial Behavior. Hal Open Science.

Atlas, S. A., Lu, J., Micu, P. D., & Porto, N. (2019). Financial Knowledge, Confidence, Credit Use, and Financial Satisfaction. Journal of Financial Counseling and Planning.

Awanis, A., Lowe, C., Andersson-Manjang, S. K., & Lindsey, D. (2022). State of the Industry Report on Mobile Money 2022. GSM Association.

Bandura, A. (2012). Social cognitive theory. In Handbook of theories of social psychology (pp. 349–373). Sage Publications Ltd.

Beresford, J., & Sellas, T. (2023). Generations defined by name, birth year, and ages in 2023. Retrieved from Beresford Research: https://www.beresfordresearch.com/age-range-by-generation/

Bongomin, G. O., & Ntayi, J. M. (2020). Mobile money adoption and usage and financial inclusion: mediating effect of digital consumer protection. DIGITAL POLICY, REGULATION AND GOVERNANCE.

Bongomin, G. O., Munene, J. C., & Yourougou, P. (2020). Examining the role of financial intermediaries in promoting financial literacy and financial inclusion among the poor in developing countries: Lessons from rural Uganda. Cogent Economics & Finance.

Bongomina, G. O., Ntayi, J. M., Munene, J. C., & Malinga, C. A. (2017). Mobile Money and Financial Inclusion in Sub-Saharan Africa: the Moderating Role of Social Networks. JOURNAL OF AFRICAN BUSINESS.

Caruana, J. (2016). Financial inclusion and the fintech revolution: implications for supervision and oversight. Bank for International Settlements.

Castri, S. d., & Gidvani, L. (2014). “Enabling Mobile Money Policies in Tanzania. A ‘Test and Learn’ Approach To Enabling Market-Led Digital Financial Services. GSMA-Mobile Money for the Unbanked.

CGAP. (2018). Transforming Pakistan’s Digital Finance Landscape.

Chao, X., Kou, G., Peng, Y., & Viedmade, E. H. (2021). Large-scale group decision-making with non-cooperative behaviors and heterogeneous preferences: An application in financial inclusion. European Journal of Operational Research, 271-293.

Chin, W. W. (1998). Commentary: Issues and opinion on structural equation modeling. MIS quarterly, vii-xvi.

Christians, C. G. (2010). The Ethics of Privacy. In C. Meyers, Journalism Ethics: A Philosophical Approach. Oxford Scholarship Online.

Collier, J. (2020). Applied Structural Equation Modeling using AMOS. New York: Routledge.

Fanta, A., & Mutsonziwa, K. (2021). Financial Literacy as a Driver of Financial Inclusion in Kenya. Journal of Risk and Financial Management, 1-13.

Farivar, S., Wang, F., & Yuan, Y. (2021). Opinion leadership vs. para-social relationship: Key factors in influencer marketing. Journal of Retailing and Consumer Services.

Farrell, Lisa, T. R., & Risse, L. (2016). The significance of financial self-efficacy in explaining women’s personal finance behaviour. Journal of Economic Psychology, 85-99.

GFLC. (2022). S&P Global Finlit Survey. Retrieved from gflec.org: https://gflec.org/initiatives/sp-global-finlit-survey/

Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 84–96.

Group, T. W. (2017). Global Financial Inclusion (Global Findex) Database 2017. United States: Development Research Group, Finance and Private Sector Development Unit.

Haenlein, M., & Kaplan, A. M. (2004). A Beginner's Guide to Partial Least Squares Analysis. Understanding Statistics, 283-297.

Haidar, S., & Fang, F. (. (2019). English language in education and globalization: a comparative analysis of the role of English in Pakistan and China. Asia Pacific Journal of Education , 165-176.

Hair, J. F., Babin, B. J., Anderson, R. E., & Black, W. C. (2019). Multivariate Data Analysis, 8th edition. INDIA: CENGAGE .

Hasan, M., Le, T., & Hoque, A. (2021). How does fnancial literacy impact on inclusive fnance? Financial Innovation, 1-23.

Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance: An analysis of enterprises in the UK. Javed Hussain, Samuel Salia, Amin Karim.

Jabbar, A. (2023). E-commerce laws and their challenges in Pakistan. Retrieved from pakistantoday: https://www.pakistantoday.com.pk/2023/02/05/e-commerce-laws-and-their-challenges-in-pakistan

Kanta, M. J., & Arifin, A. Z. (2022). Financial Protection and Literacy to Financial Inclusion Usage Electronic Transaction. Advances in Social Science, Education and Humanities Research.

Karandaaz. (2023, 02 10). Karandaaz Press Releases. Retrieved from https://karandaaz.com.pk/: https://karandaaz.com.pk/media-center/news-events/k-fis-2022-shows-that-financial-inclusion-in-pakistan-increased-by-9-percentage-points-between-2020-and-2022/

Kemp, S. (2022). Digital 2022. Retrieved from datareportal.com: https://datareportal.com/reports/digital-2022-pakistan

Khan, I. (2023). Pakistan’s Gender Gap in Adoption and Usage of Mobile Money Wallets. Karandaaz Pakistan.

Khawar, S., & Sarwar, A. (2021). Financial literacy and financial behavior with the mediating effect of family financial socialization in the financial institutions of Lahore, Pakistan. Future Business Journal .

Kikulwe, E. M., Fischer, E., & Qaim, M. (2014). Mobile Money, Smallholder Farmers, and Household Welfare in Kenya. PLoS ONE .

Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration, 1-10.

Koomson, I., Villano, R. A., & Hadley, D. (2019). Intensifying financial inclusion through the provision of financial literacy training: a gendered perspective. Applied Economics.

Limbu, Y. B., & Sato, S. (2019). Credit card literacy and financial well-being of college students: A moderated mediation model of self-efficacy and credit card number. International Journal of Bank Marketing.

Lopez, T., & Winkler, A. (2018). The challenge of rural financial inclusion – evidence from microfinance. Applied Economics, 50(14), 1555-1577.

Lown, J. M. (2011). Outstanding AFCPE® Conference Paper: Development and Validation of a Financial Self-Efficacy Scale. Journal of Financial Counseling and Planning,.

Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics volume.

Lusardi, A., & Mitchell, O. (2007). Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education. Business Economics, 35-44.

Mazer, R., & Rowan, P. (2016). Competition in Mobile Financial Services: Lessons from Kenya and Tanzania. The African Journal of Information and Communication, 39-59.

Mindra, R., & Moya, M. (2017). "Financial self-efficacy: a mediator in advancing financial inclusion. Equality, Diversity, and Inclusion: An International Journal,.

Mindra, R., Moya, M., Zuze, L. T., & Kodongo, O. (2017). Financial self-efficacy: a determinant of financial inclusion. International Journal of Bank Marketing.

Mindra, R., Moya, M., Zuze, L. T., & Kodongo, O. (2017). Financial self-efficacy: a mediator in advancing financial inclusion. Equality, Diversity and Inclusion, 128-149.

Morshadul Hasan, T. L. (2021). How does financial literacy impact on inclusive finance? Financial Innovation.

Mugambi, A., Njunge, C., & Yang, S. C. (2014). Mobile-money benefits and usage: The case of M-PESA. IT Professional, 16-21.

Njoroge, P. (2016). Financial inclusion in Sub-Saharan Africa. Retrieved from bis.org: https://www.bis.org/review/r160907c.htm

Noor, N., Batool, I., & Arshad, H. M. (2020). Financial literacy, financial self-efficacy and financial account ownership behavior in Pakistan. Cogent Economics & Finance.

Oaten, M., & Cheng, K. (2007). Improvements in self-control from financial monitoring. Journal of Economic Psychology, 487-501.

Okeleke, K. (2019). The power of mobile to accelerate digital transformation in Pakistan. GSMA.

Ozili, P. K. (2020). Theories of Financial Inclusion. SSRN Electronic Journal .

PTA. (2022). Telecom Indicators. Retrieved from www.pta.gov.pk: https://www.pta.gov.pk/en/telecom-indicators

Rafique, S., Khan, N. R., Soomro, S. A., & Masood, F. (2022). Linking LMX and schedule flexibility with employee innovative work behaviors: mediating role of employee empowerment and response to change. Journal of Economic and Administrative Sciences.

Rashid, N. (2015). The Promise of Mobile Money in Pakistan. CGAP.

SBP. (2020). Financial Inclusion. Retrieved from www.sbp.org.pk: https://www.sbp.org.pk/finc/finc.asp

Sohail, H. (2021, 04 12). Financial Inclusion and the Increasing Gender Disparity. Retrieved from karandaaz.com.pk: https://karandaaz.com.pk/blog/financial-inclusion-increasing-gender-disparity/

Soumaré, I., Tchana, F. T., & Kengne, T. M. (2016). Analysis of the determinants of financial inclusion in Central and West Africa. Transnational Corporations Review, 8(4), 231-249.

Tay, L.-Y., Tai, H.-T., & Tan, G.-S. (2022). Digital financial inclusion: A gateway to sustainable development. Business and Economics.

Travis, Justin, A. K., Geden, M., & Bunde, J. (2020). Some stress is good stress: The challenge-hindrance framework, academic self-efficacy, and academic outcomes. Journal of educational Psychology.

Vitt, L. A., Anderson, C., Kent, J., Lyter, D. M., Siegenthaler, J. K., & War, J. (2018). Personal Finance and the Rush to Competence: Personal Finance and the Rush to Competence:. Middleburg, Virginia: Institute for Socio-Financial Studies.

Wang, X., & Guan, J. (2017). Financial inclusion: measurement, spatial effects and influencing factors. Applied Economics, 49(18), 1751-1762.

Weil, I. M. (2014). Mobile Banking: The Impact of M-Pesa in Kenya. Cambridge: National Bureau of Economic Research.




How to Cite

Shehzadi, Y., & Jameel, K. . (2023). Exploring the Power of Financial Self-efficacy in Acceleration of Financial Inclusion among Adults . Pakistan Journal of Social Sciences, 43(3), 459-474. https://doi.org/10.5281/zenodo.8425568