Digital financial inclusion, interoperability, and vulnerable population in Ghana: analysing the threshold effect of financial literacy

Purpose This paper investigates the interconnectedness of financial literacy, interoperability, and digital financial inclusion (DFI), and their impact on vulnerable populations in Ghana. Design/methodology/approach Drawing on a unique panel household-level survey of 2,697 the study employs step-by-step regression to analyse the relationships of interest, and the method of moments quantile regression (MMQR) to evaluate the levels at which financial literacy improves the DFI and ameliorates vulnerability. Findings The findings of this paper are as follows. First, digital financial inclusion improves when households who are financially literate make payments to a network other than their networks (interoperability). Second, the improvement in households' vulnerability in Ghana can be explained by households having access to a wide range of digital financial services. Finally, we find that individuals with higher levels of financial literacy are more likely to adopt and effectively use digital financial services to improve their livelihoods, thereby reducing their vulnerability. Originality/value This study provides empirical evidence on how financial literacy and interoperability jointly drive digital financial inclusion and reduce vulnerability offering actionable insight for policymakers and financial service providers in emerging economies.