FinTech and Financial Inclusion in SMEs of Afghanistan: Exploring the Mediated Moderation of Digital Financial Literacy and the Moderating Influence of Continued Usage Intention and Perceived Regulatory Support

Abstract

This study examines the effect of FinTech adoption on financial inclusion (FI) among small and medium-sized enterprises (SMEs) in Afghanistan, with a specific emphasis on the mediated moderation of digital financial literacy (DFL) and the moderating roles of continued usage intention (CUI) and perceived regulatory support (PRS). Using structural equation modeling (SEM), the results showed that FinTech use significantly increases FI (β = 0.170, p <.001). FinTech is positively influenced by perceived ease of use (PEOU), perceived security (PES), trust (TRS), and service quality (SRQ).  FinTech use strongly predicts DFL (β = 0.483, p <.001), which positively effects FI (β = 0.215, p <.001), confirming a partial mediation effect (indirect β = 0.104, p <.001). The moderation study indicates that CUI considerably enhances the relationship between DFL and FI (β = 0.190, p <.001), on the other hand, PRS does not significantly moderate the FinTech and FI relationship (β = 0.082, p =.070). The model has moderate to strong explanatory power, with R² values of 0.233 for DFL, 0.452 for FI, and 0.379 for FinTech use. All endogenous constructs had Q² values greater than 0.25, which supports predictive validity. These findings emphasize the importance of DFL and user engagement in altering FinTech adoption into meaningful financial outcomes for SMEs in weak economies. These findings can help FinTech developers, financial institutions, and policymakers design targeted strategies that improve SMEs' access to financial services, promote long-term FinTech use, and foster a more inclusive digital financial ecosystem in fragile contexts such as Afghanistan.

Keywords: FinTech adoption, Financial inclusion, SMEs, Digital financial literacy, Moderated mediation