Financial Literacy as a Key to Financial Inclusion: A Multidimensional Analysis and Insights from Below Poverty Line Households

This study examined the multifaceted effects of financial literacy on the inclusion of economically disadvantaged populations. Structural equation modelling with smart partial least squares (PLS) was employed to analyze the effects of financial literacy on financial inclusion. This study reveals that financial literacy exerts a multi-dimensional influence on households’ financial inclusion below the poverty threshold. Additionally, it indicates that improved access to financial services is correlated with increased usage of these resources. This study shows that access to financial services and financial literacy play a significant role in increasing households’ use of financial products, thereby promoting greater financial inclusion.