Article
“FinTech Adoption and Its Impact on Financial Inclusion: Evidence from Low- and Middle-Income Households in India”
Financial inclusion is still a priority development issue in India, and recent progress in financial technology (FinTech) has the potential to reduce longstanding gaps in access and usage among low- and middle-income households (LMIH). This research explores the effect of FinTech adoption on financial inclusion and tests how digital financial literacy and perceived trust mediate this relationship. A cross-sectional quantitative survey was employed to collect data from LMICHs from five Indian regions that were analysed by means of Structural Equation Modelling (SEM). The results of the study show that FinTech adoption has a strong positive impact on financial inclusion, thus supporting a novel approach to understanding access to finance, namely digital financial services emerging as an enabling tool for inclusive finance. This direct effect is, however, strengthened by means of dual mediation: digital financial literacy improves users’ ability to use FinTech services effectively, and perceived trust increases the confidence that the users place in the security and safety of internet transactions. Overall, these pathways also partially mediate the FinTech–financial inclusion pathway, indicating that lack of access is not the only barrier preventing financial empowerment and usage depth. The research contributes to the theoretical debate by connecting technology adoption and inclusion frameworks; it brings forth that financial inclusion is meaningful not just in technological access, but also in the user’s capacity and trust. Implications: The findings have policy and practical implications, characterising the importance of user education, cyber-safety protections, and inclusive digital financial solutions to promote a more equitable involvement of disadvantaged households in the Indian digital finance system.