The Influence of Financial Technology Experience on Digital Financial Inclusion: MVAS Perceived Usefulness as a Mediator among MFI Customers in Tanzania

Abstract

Based in the fact that Digital Financial Inclusion is a key factor for promoting economic development and reducing poverty in a developing country like Tanzania, this study aimed at examining how the experience with Financial Technology (FinTech) influences digital financial inclusion among MFI customers in Tanzania, with the mediation role of the perceived usefulness of Mobile Value-Added Services (MVAS). Technology Acceptance Model (TAM) provided the lens through which the key issues under investigation could be examined. Data collection was conducted using a survey-based questionnaire involving a sample of 283 MFI customers found in two regions of Tanzania (Dar Es Salaam and Arusha). The Partial Least Squares Structural Equation Modelling (PLS-SEM) was then used for data analysis. Findings of the study show that the experience with FinTech positively and significantly influences the adoption and usage of digital financial inclusion among MFI customers. The results also show that perceived usefulness of MVAs mediates significantly the relationship between experience with FinTech and digital financial inclusion. Based on these findings, it is recommended that MFIs, Mobile Network Operators (MNOs) and regulatory authorities (e.g., BOT, TRCA and AFI) cooperate in educating the customers to get the necessary skills about digital financial transactions and to motivate them to use it regularly to gain experience. These stakeholders should also ensure positive experiences with MVAS as it mediates well the relationship between experience with FinTech and digital financial inclusion. The study contributes to the literature on digital financial inclusion and provides practical implications for policymakers and practitioners alike.