The Influence of Digital Finance on Financial Inclusion: A Case Study of Rural Women in Kenya

Abstract

This study investigates the transformative influence of digital finance on the financial inclusion of rural women in Kenya. Despite rural women being the backbone of the rural economy, they often face significant barriers to accessing traditional banking services, including geographical distance, lack of collateral, and socio-cultural norms. The advent of digital financial services (DFS), such as mobile money (M-Pesa), micro-lending platforms (M-Shwari), and digital savings groups, have the potential to overcome these obstacles and significantly enhance their financial participation. This research employs a cross-sectional descriptive design on a sample of 1000 rural Kenyan women purposively selected. Using the partial Least Squares Structural Equation Model (PLS SEM) and the chi-Square test of independence the study established the relationship that exists between adoption and usage if digital payment systems and access and usage of formal financial services. The findings indicate a strong positive relationship between the use of digital financial systems and increased financial inclusion among rural Kenyan women. The study highlights that digital finance not only provides a convenient and secure way to save and transact but also serves as a gateway to formal financial services and entrepreneurial opportunities. The study emphasizes the need for targeted policies and digital literacy programs to ensure that this digital revolution effectively and equitably empowers rural women, bringing them into the financial inclusion bracket.