From Fintech Perceptions to Financial Inclusion: The Mediating Roles of Digital and Financial Literacy Among Women Microentrepreneur in Indonesia

The perceived accessibility and usefulness of financial technology (fintech) do not always translate into greater financial inclusion. This study aims to investigate the interplay between fintech perceptions and financial inclusion through the mediating roles of digital and financial literacy. Data were gathered from 202 female microentrepreneurs in Yogyakarta, Indonesia. Results from Partial Least Squares Structural Equation Modelling (PLS-SEM) suggest that both literacies considerably mediate the link between perceptions of fintech and financial inclusion. Direct tests indicate that fintech perceptions significantly contribute to enhanced digital and financial literacy. Both forms of literacy also are positively associated with financial inclusion. Conversely, the direct connection between fintech perception and financial inclusion was insignificant. These emphasize the vital role of individual capabilities in explaining the interaction between fintech perceptions and financial inclusion. This study expands the application of the capability approach in the fintech and financial inclusion literature by positioning digital and financial literacy as two distinct personal conversion factors. It also implies that the availability of fundamental access to financial services does not necessarily result in identical stages of the inclusion, especially when users' digital and financial capabilities differ.