The Mediating Influence of Financial Literacy between the Financial Inclusion and Sustainable Development
Keywords:
Financial inclusion, financial literacy, sustainable developmentAbstract
The goal of this study was to examine the mediating effect of financial literacy on the financial inclusion and sustainable development in Bangladesh. On the basis of questionnaire survey, a PLS SEM model was used with 359 collected data samples from the residents of Dhaka in Bangladesh. The results found financial inclusion positively impacts the sustainable development by both direct and indirect effects. The findings of this study provides a useful contribution and practical implication for the government and financial institutions.
References
Adah, A., & Abu, A. S. (2019). Financial Inclusion and Sustainable Development in Nigeria: An Empirical Diagnosis. In Proceedings of the In Proceedings of the NOUN Conference on Nigerian Sustainable Economic Development, Abuja, Nigeria.
Aguera, P. (2015). Inclusion financière, Croissance et Réduction de la Pauvreté. In Proceedings of the Conférence Régionale CEMAC, Brazzaville, Congo.
Alaimo, L. S., Ciacci, A., & Ivaldi, E. (2020). Measuring sustainable development by non-aggregative approach. Social Indicators Research, 157(1), 101-122. https://doi.org/10.1007/s11205-020-02357-0
Alshebami, A. S., & Al Marri, S. H. (2022). The impact of financial literacy on entrepreneurial intention: The mediating role of saving behavior. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.911605
Alshebami, A. S., & Aldhyani, T. H. (2022). The interplay of social influence, financial literacy, and saving behaviour among Saudi youth and the moderating effect of self-control. Sustainability, 14(14), 8780. https://doi.org/10.3390/su14148780
Amidžić, G., Massara, A., & Mialou, A. (2014). undefined. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2407529
Atkinson, A., & Messy, A. (2012). Measuring financial literacy. OECD Working Papers on Finance, Insurance and Private Pensions. https://doi.org/10.1787/5k9csfs90fr4-en
ATMACA, A. C., KIRAY, S. A., & PEHLİVAN, M. (2019). Development of a measurement tool for sustainable development awareness. International Journal of Assessment Tools in Education, 6(1), 80-91. https://doi.org/10.21449/ijate.518099
Avom, D., & Bobbo, A. (2018). Réglementation de l’industrie bancaire et exclusion financière dans la Communauté économique et monétaire de l’Afrique centrale. Afrique contemporaine, N° 266(2), 175-190. https://doi.org/10.3917/afco.266.0175
Babajide, A. A., Adegboye, F. B., & Omankhanlen, A. E. (2015). Financial inclusion and economic growth in Nigeria. International Journal of economics and financial issues, 5(3), 629-637.
Bank, W. (2017). The Global Findex Database 2017. Washington, DC, USA. Available online: https://globalfindex.worldbank.org/ (accessed on 23 February 2022)
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth, 12(1), 27-49. https://doi.org/10.1007/s10887-007-9010-6
Benaim, A., Collins, A., & Raftis, L. (2008). Social dimension of sustainable development: guidance and application.
Berry, J., Karlan, D., & Pradhan, M. (2018). The impact of financial education for youth in Ghana. World Development, 102, 71-89. https://doi.org/10.1016/j.worlddev.2017.09.011
Bongomin, G. O., Munene, J. C., Ntayi, J. M., & Malinga, C. A. (2018). Exploring the mediating role of social capital in the relationship between financial intermediation and financial inclusion in rural Uganda. International Journal of Social Economics, 45(5), 829-847. https://doi.org/10.1108/ijse-08-2017-0357
Castells‐Quintana, D., Royuela, V., & Thiel, F. (2019). Inequality and sustainable development: Insights from an analysis of the human development index. Sustainable Development, 27(3), 448-460. https://doi.org/10.1002/sd.1917
Chikalipah, S. (2017). What determines financial inclusion in sub-Saharan Africa? African Journal of Economic and Management Studies, 8(1), 8-18. https://doi.org/10.1108/ajems-01-2016-0007
Chow, W. S., & Chen, Y. (2011). Corporate sustainable development: Testing a new scale based on the Mainland Chinese context. Journal of Business Ethics, 105(4), 519-533. https://doi.org/10.1007/s10551-011-0983-x
Coventry, K. R., & Garrod, S. C. (2004). Saying, seeing and acting: The psychological semantics of spatial prepositions. Psychology Press.
Cultural liberty and human development. (2004). Human Development Report 2004, 13-25. https://doi.org/10.18356/495d889c-en
Cumming, D., Johan, S., & Zhang, M. (2014). The economic impact of entrepreneurship: Comparing international datasets. Corporate Governance: An International Review, 22(2), 162-178. https://doi.org/10.1111/corg.12058
Dupas, P., & Robinson, J. (2013). Savings constraints and Microenterprise development: Evidence from a Field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163-192. https://doi.org/10.1257/app.5.1.163
Enowbi Batuo, M., & Asongu, S. A. (2015). The impact of liberalisation policies on income inequality in African countries. Journal of Economic Studies, 42(1), 68-100. https://doi.org/10.1108/jes-05-2013-0065
Fernandes, D., Lynch, J. G., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8), 1861-1883. https://doi.org/10.1287/mnsc.2013.1849
Fine, B. (2004). Economics and ethics: Amartya Sen as point of departure. The New School Economic Review, 1(1).
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.1177/002224378101800104
GAUDECKER, H. V. (2015). How does household portfolio diversification vary with financial literacy and financial advice? The Journal of Finance, 70(2), 489-507. https://doi.org/10.1111/jofi.12231
Gautier, T. T., Luc, N. N., & Djimoudjiel, D. (2020). Dynamic analysis of determinants of financial inclusion in Cameroon. European Scientific Journal ESJ, 16(01). https://doi.org/10.19044/esj.2020.v16n1p106
Gefen, D., & Straub, D. (2005). A practical guide to factorial validity using PLS-graph: Tutorial and annotated example. Communications of the Association for Information Systems, 16. https://doi.org/10.17705/1cais.01605
Geraldes, H. S., Gama, A. P., & Augusto, M. (2022). Reaching financial inclusion: Necessary and sufficient conditions. Social Indicators Research, 162(2), 599-617. https://doi.org/10.1007/s11205-021-02850-0
Hair, J. F., Hult, G. T., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R. Sage Publications: Thousand Oaks. https://doi.org/10.1007/978-3-030-80519-7
Hasan, M., Le, T., & Hoque, A. (2021). How does financial literacy impact on inclusive finance? Financial Innovation, 7(1). https://doi.org/10.1186/s40854-021-00259-9
Hasan, M. M., Popp, J., & Oláh, J. (2020). Current landscape and influence of big data on finance. Journal of Big Data, 7(1). https://doi.org/10.1186/s40537-020-00291-z
Hasan, M. M., Yajuan, L., & Khan, S. (2020). Promoting China’s inclusive finance through digital financial services. Global Business Review, 23(4), 984-1006. https://doi.org/10.1177/0972150919895348
Henseler, J., Ringle, C. M., & Sarstedt, M. (2014). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115-135. https://doi.org/10.1007/s11747-014-0403-8
Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Fed. Res. Bull., 89, 309.
Hogarth, J. M. (2007). The Federal Reserve System’s role in economic and financial literacy–rationale, activities, and impact. und Wirtschaftswachstum Human Capital and Economic Growth, 145.
Holzmann, R. (2010). Bringing financial literacy and education to low and middle income countries. https://doi.org/10.1596/27828
Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance. Journal of Small Business and Enterprise Development, 25(6), 985-1003. https://doi.org/10.1108/jsbed-01-2018-0021
HUSTON, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296-316. https://doi.org/10.1111/j.1745-6606.2010.01170.x
Kaur, H., & Bansal, P. (2020). Mediating role of utilization of financial products and services on the relationship between financial access and MSMEs growth in India. SEDME (Small Enterprises Development, Management & Extension Journal): A worldwide window on MSME Studies, 47(3), 261-278. https://doi.org/10.1177/09708464211042430
Kenny, D. A., Korchmaros, J. D., & Bolger, N. (2003). Lower level mediation in multilevel models. Psychological Methods, 8(2), 115-128. https://doi.org/10.1037/1082-989x.8.2.115
Kezar, A., & Yang, H. (2010). The importance of financial literacy. About Campus: Enriching the Student Learning Experience, 14(6), 15-21. https://doi.org/10.1002/abc.20004
Khan, I., Khan, I., Sayal, A. U., & Khan, M. Z. (2021). Does financial inclusion induce poverty, income inequality, and financial stability: Empirical evidence from the 54 African countries? Journal of Economic Studies, 49(2), 303-314. https://doi.org/10.1108/jes-07-2020-0317
Kim, D., Yu, J., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1-14. https://doi.org/10.1016/j.ribaf.2017.07.178
Klapper, L., El-Zoghbi, M., & Hess, J. (2016). Achieving the sustainable development goals: The role of financial inclusion. Washington, DC: CGAP.
Koomson, I., Villano, R. A., & Hadley, D. (2019). Intensifying financial inclusion through the provision of financial literacy training: A gendered perspective. Applied Economics, 52(4), 375-387. https://doi.org/10.1080/00036846.2019.1645943
Kou, G., Olgu Akdeniz, Ö., Dinçer, H., & Yüksel, S. (2021). Fintech investments in European banks: A hybrid IT2 fuzzy multidimensional decision-making approach. Financial Innovation, 7(1). https://doi.org/10.1186/s40854-021-00256-y
KOÇAK, F., & BALCI, V. (2010). Doğada Yapılan Sportif Etkinliklerde Çevresel Sürdürülebilirlik. Ankara Üniversitesi Çevrebilimleri Dergisi, 213-222. https://doi.org/10.1501/csaum_0000000037
Levine, R. (2005). Chapter 12 finance and growth: Theory and evidence. Handbook of Economic Growth, 865-934. https://doi.org/10.1016/s1574-0684(05)01012-9
Lusardi, A., & Mitchell, O. (2011). Financial literacy and planning: Implications for retirement wellbeing. https://doi.org/10.3386/w17078
LUSARDI, A., & MITCHELL, O. S. (2011). Financial literacy around the world: An overview. Journal of Pension Economics and Finance, 10(4), 497-508. https://doi.org/10.1017/s1474747211000448
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44. https://doi.org/10.1257/jel.52.1.5
Lyons, A. C., & Kass-Hanna, J. (2019). Financial inclusion, financial literacy and economically vulnerable populations in the Middle East and North Africa. Emerging Markets Finance and Trade, 57(9), 2699-2738. https://doi.org/10.1080/1540496x.2019.1598370
López, T., & Winkler, A. (2019). Does financial inclusion mitigate credit boom-bust cycles? Journal of Financial Stability, 43, 116-129. https://doi.org/10.1016/j.jfs.2019.06.001
Magno, F., Cassia, F., & Ringle, C. M. (2022). A brief review of partial least squares structural equation modeling (PLS-SEM) use in quality management studies. The TQM Journal. https://doi.org/10.1108/tqm-06-2022-0197
Mago, S., & Chitokwindo, S. (2014). The impact of mobile banking on financial inclusion in Zimbabwe: A case for Masvingo province. Mediterranean Journal of Social Sciences. https://doi.org/10.5901/mjss.2014.v5n9p221
Mahato, J., & Jha, M. K. (2023). Does financial inclusion promote sustainable livelihood development? Mediating effect of microentrepreneurship. Journal of Financial Economic Policy, 15(4/5), 485-499.
Markus, K. A. (2012). Principles and practice of structural equation modeling by Rex B. Kline. Structural Equation Modeling: A Multidisciplinary Journal, 19(3), 509-512. https://doi.org/10.1080/10705511.2012.687667
Maturana, G., & Nickerson, J. (2018). Teachers teaching teachers: The role of workplace peer effects in financial decisions. The Review of Financial Studies, 32(10), 3920-3957. https://doi.org/10.1093/rfs/hhy136
Maune, A., Matanda, E., & Mundonde, J. (2020). . Does financial inclusion cause economic growth in Zimbabwe? An empirical investigation. Acta Univ. Danubius. Oeconomica, 16, 195-215.
Mbata, C. O. (2009). Traditional music in nation building. Alvan Journal of Music and Humanities, 1.
Morgan, P., & Pontines, V. (2014). Financial stability and financial inclusion. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2464018
Neaime, S., & Gaysset, I. (2017). Sustainability of macroeconomic policies in selected MENA countries: Post financial and debt crises. Research in International Business and Finance, 40, 129-140. https://doi.org/10.1016/j.ribaf.2017.01.001
Nyarko, E. S. (2018). Financial Inclusion, Financial Literacy and Inclusive Growth in Africa; University of Ghana: Accra, Ghana.
OECD. Progress of the Work of the Expert Subgroup on the Evaluation of Financial Education Programs–Consultant Analytical Note: A Framework for the Evaluation of Financial Education Programs; OECD Network on Financial Education, OECD, Mimeo: Paris, France. (2009).
Okello Candiya Bongomin, G., & Ntayi, J. M. (2020). Mobile money adoption and usage and financial inclusion: Mediating effect of digital consumer protection. Digital Policy, Regulation and Governance, 22(3), 157-176. https://doi.org/10.1108/dprg-01-2019-0005
Onodugo, C., Onodugo, I., Ogbo, A., Okwo, H., & Ogbaekirigwe, C. (2021). Moderating role of social capital on the effect of financial behavior on financial inclusion. Problems and Perspectives in Management, 19(3), 502-512. https://doi.org/10.21511/ppm.19(3).2021.41
Ozili, P. K. (2020). Theories of financial inclusion. Uncertainty and Challenges in Contemporary Economic Behaviour, 89-115. https://doi.org/10.1108/978-1-80043-095-220201008
Paiella, M. (2016). Financial literacy and subjective expectations questions: A validation exercise. Research in Economics, 70(2), 360-374. https://doi.org/10.1016/j.rie.2015.11.004
Park, C., & Mercado, R. V. (2021). Financial inclusion. Financial Inclusion in Asia and Beyond, 98-128. https://doi.org/10.4324/9781003035916-4
Rahman, M. O. (2024). Influence of Social Capital on Promoting Sustainable Livelihood? Mediating Effect of Financial Inclusion. International Research Journal of Management and Social Sciences, 5(1), 202-216.
Rahman, O. M. (2023). The Impact of Microfinance on Poverty Alleviation and Employment Creation. International Research Journal of Management and Social Sciences,, 4(3), 509-527, 04(03), 509-527. https://doi.org/10.5281/zenodo.10504331
Ramachandran, D. R. (2011). Financial literacy - The demand side of financial inclusion. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1958417
Rieger, M. O. (2020). How to measure financial literacy? Journal of Risk and Financial Management, 13(12), 324. https://doi.org/10.3390/jrfm13120324
Ringle, C. M., Sarstedt, M., Mitchell, R., & Gudergan, S. P. (2020). Partial least squares structural equation modeling in HRM research. The International Journal of Human Resource Management, 31(12), 1617-1643. https://doi.org/10.1080/09585192.2017.1416655
Sarma, M. (2012). Index of Financial Inclusion–A measure of financial sector inclusiveness. Centre for International Trade and Development, School of International Studies Working Paper Jawaharlal Nehru University. Delhi, India.
Sarma, M., & Pais, J. (2010). Financial inclusion and development. Journal of International Development, 23(5), 613-628. https://doi.org/10.1002/jid.1698
Selim, J. (2015). Human development report 2015. New York: United Nations Development Programme.
Sha’ban, M., Girardone, C., & Sarkisyan, A. (2021). Cross-country variation in financial inclusion: a global perspective. In Financial Literacy and Responsible Finance in the FinTech Era (pp. 23-44). Routledge.
Sharma, D. (2016). Nexus between financial inclusion and economic growth. Journal of Financial Economic Policy, 8(1), 13-36. https://doi.org/10.1108/jfep-01-2015-0004
Shen, Y., Hueng, C. J., & Hu, W. (2019). Using digital technology to improve financial inclusion in China. Applied Economics Letters, 27(1), 30-34. https://doi.org/10.1080/13504851.2019.1606401
Sun, H., Yuen, D. C., Zhang, J., & Zhang, X. (2020). Is knowledge powerful? Evidence from financial education and earnings quality. Research in International Business and Finance, 52, 101179. https://doi.org/10.1016/j.ribaf.2019.101179
Swamy, V. (2014). Financial inclusion, gender dimension, and economic impact on poor households. World Development, 56, 1-15. https://doi.org/10.1016/j.worlddev.2013.10.019
Tampuri Jnr, M. Y., Kong, Y., Appiah, B., Asare, I., & Baidoo, P. (2021). Enhancing Financial Capability for Quality Access and Usage of Financial Services. International Journal of Advance Research and Innovative Ideas in Education (IJARIIE), 7.
UNCDF. (2015). Finance inclusive: Améliorer l’accès aux Services Financiers; United Nations Capital Development Fund: New York, NY, USA.
UNCTAD. (2015). Access to Financial Services as a Driver for the Post-2015 Development Agenda; UNCTAD: Geneva, Switzerland.
United Nations decade of education for sustainable development 2005–2014. (2011). Green Education: An A-to-Z Guide. https://doi.org/10.4135/9781412974615.n110
Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks? —An analysis based on big data. Research in International Business and Finance, 55, 101338. https://doi.org/10.1016/j.ribaf.2020.101338
World bank. (2008). Banking the Poor: Measuring Banking Access in 54 Economies; World Bank: Washington, DC, USA.
Zhai, T., & Chang, Y. C. (2018). Standing of environmental public-interest litigants in China: Evolution, obstacles and solutions. Journal of Environmental Law, 30(3), 369-397. https://doi.org/10.1093/jel/eqy011
Çera, G., Khan, K. A., Mlouk, A., & Brabenec, T. (2020). Improving financial capability: The mediating role of financial behaviour. Economic Research-Ekonomska Istraživanja, 34(1), 1265-1282. https://doi.org/10.1080/1331677x.2020.1820362
