BEYOND FINANCIAL AWARENESS: FINANCIAL LITERACY, DIGITAL FINANCIAL SERVICE ADOPTION, AND FINANCIAL INCLUSION AMONG COLLEGE STUDENTS

Abstract

Digital credit, a fully digital way to reach people with limited access to financial services, is an important area where both of these issues emerge. This study sought to fill this gap by examining the relationships between financial literacy, digital financial service use and financial inclusion among college students in Kerala, looking at the mediating role of digital financial services use. The present research design is quantitative research model and descriptive-explanatory, where all the primary data were collected by using the structured questionnaire to 300 students (undergraduate and postgraduate) from selected colleges in Kerala. IBM SPSS Statistics 29 and SmartPLS 4 were used for data analysis. The models of measurement and structure were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) and analysis of direct and indirect relationships was carried out by using bootstrapping with 5000 resampling. The results indicate that Financial Literacy significantly and positively influences Digital Financial Service Adoption (β = 0.603, p < .001). Digital Financial Service Adoption, in turn, has a significant positive effect on Financial Inclusion (β = 0.701, p < .001). Adoption of digital financial services partly mediated the impact of financial literacy on financial inclusion, according to mediation analysis (β=0.423, p<.001). The outcomes demonstrate that knowledge of finance and capabilities can make more effectively to financial inclusion when students translate them into the practical use of digital financial services. This research emphasizes the need to combine financial literacy with digital financial readiness to enhance the sustainable financial inclusion of young adults