Digital Financial Literacy and Its Impact on Financial Decision-Making of Women: Evidence from Nepal

Abstract

Background: Digital financial literacy (DFL) has also become a significant predictor of financial inclusion and better financial decision making especially by women in developing economies. In Nepal, though there is an upward trend in the accessibility of digital financial services, including mobile banking and online payments, women still experience structural, social, and technological challenges that restrict their successful engagement in financial services. Digital financial literacy and its impact on the financial decisions of women is thus a critical concept that should be understood to enable gender-focused financial development.

Purpose: This paper will discuss how digital financial literacy affects women in terms of financial decisions in Nepal and the purposes of financial attitude, financial accessibility, perceived behavioral control, and subjective norms in influencing financial decisions.

Design/Methodology/Approach: The survey data of 386 women in urban, semi-urban and rural regions of Nepal was used to adopt a quantitative cross-sectional research design. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze the data to determine the reliability of measurements, validity, and hypothesized structural relationships between the variables.

Findings: The findings indicate that there is no significant direct impact of digital financial literacy on financial decision-making. Nevertheless, financial accessibility, perceived behavioral control, financial attitude, and subjective norms play an important role in the financial decisions of women, but financial accessibility proves to be the most powerful predictor.

Conclusion: The conclusion of the study is that to enhance the financial decision-making of women in Nepal, it is necessary to increase not only digital financial literacy but also the financial accessibility, trust in using financial services, and conducive social conditions to advance women financial empowerment.

Keywords: Digital financial literacy, women’s financial decision-making, financial accessibility, perceived behavioral control, Nepal