From Literacy to Inclusion: The Essential Role of Financial Self-Efficacy

Naseem Al Rahahleh ()
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Naseem Al Rahahleh: King Abdulaziz University, Saudi Arabia

Review of Development Finance Journal, 2024, vol. 14, issue 2, 78-93

Abstract: Focusing on the developing economy of Saudi Arabia, this study examines the impact of financial self-efficacy on the relationship between financial literacy and financial inclusion in the demand-side context. Using a quantitative approach, the study presents the first account of this relationship as it functions in the focal country. The association between financial literacy and financial inclusion is investigated on a quantitative basis via multiple hypotheses tested with partial least-squares structural equation modeling (PLS-SEM) as the methodology. The investigation is based on quantitative data collected from 887 respondents randomly selected using an online survey questionnaire designed specifically for this study. A significant positive relationship is found between financial literacy and financial inclusion. In particular, self-efficacy is identified as a significant predictor of financial inclusion and a partial mediator between financial literacy and financial inclusion.

Keywords: PLS-SEM; Financial literacy; Financial inclusion; Self-efficacy; Investment; Factor analysis; Mediator (search for similar items in EconPapers)
JEL-codes: G20 G40 G41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ3:v:14:y:2024:i:2:p:78-93

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