A Financial Resilience Pathway Model for Sustainable Tribal Livelihoods: Evidence from Tribal Households in Odisha Using PLS-SEM

Abstract

Background: This study examines the role of financial inclusion in promoting sustainable livelihoods among tribal households in Odisha, with a specific focus on the mediating role of financial resilience. Over the period, financial inclusion initiatives have expanded rapidly in rural India.  But their effectiveness in ensuring long-term livelihood sustainability remains uncertain. Aim: The study addresses this gap by analysing how inclusive finance, digital financial access, and financial capability jointly influence livelihood outcomes through financial resilience and develops and tests a financial resilience pathway model. Methodology: The study is based on primary data collected from 400 tribal households across selected tribal-dominated districts of Odisha using a structured questionnaire. Responses were measured on a five-point Likert scale. The study adopted a quantitative research design and employed SPSS 27 and PLS-SEM with mediation analysis. Descriptive statistics, reliability and validity tests, exploratory factor analysis, correlation analysis, and structural modelling were used to examine direct and mediating relationships among the variables. Results: The results reveal that inclusive finance, digital financial inclusion, and financial capability have a significant positive impact on financial resilience. Among these, financial capability emerged as the strongest predictor, indicating the importance of financial knowledge and behavioural competence in strengthening household stability. Financial capability emerged as the strongest predictor of financial resilience and in turn, significantly influences sustainable livelihood outcomes, including income stability, risk absorption capacity, and livelihood continuity. The mediation analysis also confirms its crucial intermediary role in translating financial access into sustainable livelihood outcomes. The findings suggest that access to financial services alone is insufficient unless supported by resilience-building mechanisms. Conclusion: The study concludes that sustainable tribal livelihoods depend not merely on financial inclusion but on the development of financial resilience. Strengthening financial capability and promoting responsible use of financial services are essential for ensuring long-term livelihood security. The study offers a finance-driven perspective on rural development and provides empirical evidence to support resilience-based policy interventions. Implications: The findings offer valuable insights for policymakers, financial institutions, and development agencies in designing inclusive financial strategies that enhance resilience and promote sustainable livelihoods among tribal communities.