Analysis of the Role of Agricultural Technology Adoption and Access to Financial Inclusion on the Development of Rural Areas in Indonesia

Rural areas in Indonesia support approximately one-third of the national population but continue to face challenges related to productivity, welfare, and infrastructure. Although agricultural technology adoption and financial inclusion have independently been associated with improved rural welfare, empirical evidence integrating both factors remains limited in the Indonesian context. This study aims to analyze the effects of agricultural technology adoption and financial inclusion on rural development and to examine the mediating role of financial inclusion in the relationship between agricultural technology adoption and rural development. A quantitative approach was employed using a cross-sectional survey of 300 smallholder farmers in several rural provinces of Indonesia. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The measurement model was assessed through indicator reliability, composite reliability, convergent validity, and discriminant validity using the Fornell–Larcker criterion and HTMT. The structural model was evaluated using path coefficients, bootstrapping with 5,000 resamples, R², and Q². The results show that agricultural technology adoption has a positive and significant effect on rural development (? = 0.312; p < 0.001). Financial inclusion also has a positive and significant effect on rural development (? = 0.458; p < 0.001). Furthermore, financial inclusion partially mediates the relationship between agricultural technology adoption and rural development, with an indirect effect of ? = 0.247 (p < 0.001). These findings indicate that technology adoption can generate greater rural development benefits when supported by access to formal financial services, credit, savings, and digital financial services.