FINTECH AND FINANCIAL INCLUSION IN SMES OF AFGHANISTAN: EXPLORING THE MEDIATED MODERATION OF DIGITAL FINANCIAL LITERACY

Abstract

This study examines at how FinTech adoption affects financial inclusion (FI) among small and medium-sized firms (SMEs) in Afghanistan, which has uncertain infrastructure, low digital penetration, and limited financial access. Based on the Technology Acceptance Model (TAM) and digital inclusion frameworks, the study investigates how perceived ease of use (PEOU), perceived security (PS), service quality (SQ), and trust (TR) influence FinTech adoption. It delves deeper into the mediating and moderating role of digital financial literacy (DFL) in the relationship between FinTech adoption and FI. Structured surveys were used to collect data from SMEs, which were then analyzed using structural equation modeling (SEM) in SmartPLS to evaluate eight hypotheses. The study revealed that all four antecedent factors have significant effects on FinTech adoption: PEOU (β = 0.212, t = 4.823, p < 0.001), PS (β = 0.213, t = 4.860, p < 0.001), SQ (β = 0.154, t = 3.461, p = 0.001), and TR. These findings emphasize the significance of user-friendly interfaces, solid data security, consistent service delivery, and providers' trust, particularly in low-literacy, high-risk contexts such as Afghanistan. Adopting FinTech strengthens digital financial literacy (β = 0.483, t = 14.956, p < 0.001), leading to greater financial inclusion. DFL mediates (β = 0.159, t = 6.847, p < 0.001) and moderates (β = 0.287, t = 7.620, p < 0.001) the association between FinTech and FI, magnifying FinTech's impact on access to financial services. These findings indicate the critical role of DFL as a bridge and catalyst for expanding FI through FinTech. The study demonstrates that simply implementing digital financial tools is insufficient without overcoming the digital skills gap. For policymakers, the findings show the need for integrated strategies that combine secure and accessible FinTech platforms with targeted training activities. Prioritizing usability, trust, and educational support is critical for FinTech providers seeking to increase their reach. Overall, this study advances our understanding of how technological, behavioral, and educational factors interact to promote inclusive finance in fragile, underbanked environments such as Afghanistan.

Keywords: FinTech adoption, Financial Inclusion, SMEs, Mediation, Moderation.