Digital financial inclusion among SMEs in Pakistan: The role of regulatory support, financing barriers, and market opportunities, with digital financial literacy and trust as moderators
DOI:
https://doi.org/10.68065/joccd.05.01.166Keywords:
Digital Financial Inclusion, SMEs, Digital Financial Literacy, Trust, Regulatory Support, Financing Barriers, Market OpportunitiesAbstract
Digital financial inclusion has gained increasing attention in policy and academic discussions across developing economies. In Pakistan, small and medium enterprises (SMEs) play an important role in economic activity, yet many still struggle to gain meaningful access to, and make regular use of, digital financial services. This study examines how three conditions regulatory support, financing barriers, and market opportunities influence digital financial inclusion among SMEs, and whether digital financial literacy and trust alter the strength of these relationships. The framework draws on the Unified Theory of Acceptance and Use of Technology and Institutional Theory, comprising three direct relationships and six moderating relationships. Data were collected through a structured questionnaire completed by 620 managers and supervisors of SMEs in Karachi, Pakistan, and analyzed using partial least squares structural equation modelling in SmartPLS. Assessment of the measurement model confirmed acceptable reliability, convergent validity, and discriminant validity. The structural analysis showed that regulatory support and market opportunities are positively associated with digital financial inclusion, whereas financing barriers have a significant negative association. Digital financial literacy strengthens the effect of regulatory support and reduces the adverse effect of financing barriers, but does not moderate the market-opportunities relationship. Trust strengthens the effects of regulatory support and market opportunities, but does not moderate the financing-barriers relationship. Overall, the model explains a substantial proportion of the variation in digital financial inclusion.
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Copyright (c) 2026 Syed Ali Raza Rizvi, Dr. Danish Ahmed Siddiqui (Author)
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