The Role of Digital Financial Literacy in Enhancing Financial Inclusion Among Informal Entrepreneurs in Zambia

Abstract

Digital financial literacy is widely seen as a vital element in advancing financial inclusion, especially among informal entrepreneurs who depend on mobile and digital financial services. Despite the increasing prevalence of digital payment systems, numerous informal business proprietors in Zambia have difficulties in efficiently employing digital financial instruments. This research examines the impact of digital financial literacy on improving financial inclusion for informal enterprises in Lusaka, Zambia. A mixed-methods strategy was employed to collect data from 350 informal traders in several markets. Research demonstrates that digital financial literacy substantially affects financial inclusion, with digital knowledge (β = 0.52, p < 0.05), mobile banking utilization (β = 0.44, p < 0.05), and confidence in digital platforms (β = 0.39, p < 0.05) identified as key determinants. The study advocates for specialized financial literacy initiatives, enhanced digital infrastructure, and regulatory assistance to promote digital financial inclusion.