This research delves into the effectiveness of attaining financial accessibility by exploring the influence of key factors such as digitalization, technology, and usage as drivers of financial accessibility (FA). The study uniquely examines the influence of these drivers on sustainable development, specifically considering the mediating role of financial education. The primary objective is to assess whether financial education enhances the influence of FA drivers on sustainable development. The study gauges sustainable development by evaluating customers' perspectives of FA's achievement in attaining Sustainable Development Goals (SDGs) such as poverty alleviation, gender equality, and industrial growth. The findings suggest the significance of digitalization, FinTech, and usage as substantial drivers of FA. The research evaluates both the direct influence of FA drivers on sustainable development and their indirect influence through the mediating effect of financial education.
Top1. Introduction
Globally, there is a growing emphasis on financial accessibility (FA), particularly in developing economies, to boost financial expansion and reduce poverty. Nevertheless, significant inequalities persist on a global scale regarding access to financial services (Demirgüç-Kunt, and Klapper, 2013). Numerous studies have underscored the potential of financial exclusion to impede individuals from leading normal lives, with Carbo et al., (2007) establishing a strong causal link between financial access and social exclusion. This perspective is supported by Claessens (2006). Pandey et al., (2022) assessed our progress toward financial inclusivity by looking into the effects of financial initiatives, financial literacy, and drivers of financial inclusion on long-term, sustainable growth. Digitalization, technology, and usage are taken into consideration as FI drivers. Investigating the influence of the drivers on sustainable growth via the mediating effect of financial literacy, the study takes a different approach. According to Basu et al., (2023) seventy percent of rural farmers lack bank account access, and eighty percent lack loan access.
Even with an agreement among researchers regarding financial accessibility as a fundamental support for sustainable development, the prevalence of these disparities remains evident. Bhanot et al., (2012) emphasized regional disparities and identified limited Financial Inclusion in northeastern India. They highlighted the potential roles of SHGs (self-help groups) and literacy in enhancing accessibility. Numerous nations increasingly rely on microfinance institutions to address the limited reach of financial services in underserved areas and sectors (Fujimoto and Aladdin, 2014). Gwalani and Parkhi, (2014) suggested that a more innovative and sophisticated growth model is needed given India's diversity and widespread diversification. Sharma, (2016) indicated that the main dimensions of FI include accessibility, Bank branch coverage, and cost-effectiveness of financial or banking offerings. In developing economies, rural populations, due to inadequate infrastructure and challenging economic conditions, experience reduced availability of economic offerings (Maria, 2016). Liu and Walheer, (2022) emphasize the significance of catch-up impact for nations with reduced levels of financial inclusion, noting that while governments have improved the FI climate globally, more substantial efforts are necessary. Consequently, sustainable development goals have been implemented to address sustainable societal development and financial inclusiveness.
Numerous studies highlight financial illiteracy and poverty as key hindrances to accessing official financial offerings. Financial education, defined as possessing knowledge of fundamental financial concepts, plays a crucial role in acquiring skills for financial efficiency (Lusardi et al, 2017; Huston, 2010). Huang et al., (2013) emphasize the importance of financial knowledge and competencies in providing both the “capability to take action” and the “chance to take action.” Given the efforts to boost FA and economic development in India, particularly through initiatives like “Pradhan Mantri Jan Dhan Yojana (PMJDY)”, understanding the perceptions of bank customers regarding the success of these measures and their connection to sustainable growth is crucial (Poonam and Chaudhry, 2016).