Digital Financial Knowledge and Its Influence on Lending Application Adoption

Authors

  • R. Bhuvaneshwari Faculty of Management, SRM Institute of Science and Technology, Kattankulathur, Tamil Nadu-603203, India.
  • Vinitha K. Faculty of Management, SRM Institute of Science and Technology, Kattankulathur, Tamil Nadu-603203, India.

DOI:

https://doi.org/10.48161/qaj.v5n2a1683

Abstract

Digital lending services have introduced new risks for users. As digital financial services become more widespread, individuals especially younger generations have adapted to these technologies. However, for lower-income groups, financial well-being remains a critical concern, as governments struggle to meet their necessities. This study examines the relationships between financial knowledge (FK), digital finance (DF), financial attitude (FA), decision-making (DM), awareness (AW), and financial behavior (FB) in the context of digital lending applications. The research is grounded in Theory of Reasoned Action (TRA) and Theory of Planned Behavior (TPB) to understand user adoption and financial decision-making. The study employs a primary data collection approach, surveying frequent users of digital lending platforms. AMOS was used in this study to examine the structural relationships between financial knowledge, digital financial literacy, financial attitude, awareness, decision-making, financial behavior (mediator), and financial satisfaction (dependent variable). SEM in AMOS was chosen over traditional regression techniques because It allows for simultaneous testing of multiple relationships in one model. It can handle latent variables (e.g., financial behavior, financial attitude). It assesses direct, indirect, and mediating effects more effectively than simple regression. A sample of 180 respondents was gathered through an online survey. To analyze the data, the study utilizes (NCA) and (fsQCA). NCA is applied to identify essential factors that must be present for financial satisfaction, while fsQCA explores various configurations of financial knowledge, digital finance, and financial behavior that contribute to financial satisfaction. These methods offer a comprehensive, non-linear approach that extends beyond traditional regression-based models. Findings indicate that financial knowledge, digital finance, decision-making, awareness, and financial behavior are positively associated with financial satisfaction, while financial attitude negatively influences financial satisfaction. By integrating NCA and fsQCA, this study provides a deeper understanding of how fintech services impact financial well-being, offering practical implications for policymakers and fintech providers.

Downloads

Download data is not yet available.

References

DAF Pamela, D. U. F. F. I. N. (2018). *G20/OECD INFE Policy Guidance-Digitalisation and Financial Literacy*.

Normawati, R., & Santoso, E. E. (2023). Digital Financial Literacy Pada Millennial: Pendekatan Knowledge, Attitude Dan Behaviour (KAB Model). Journal Ilmiah Mahasiswa Manajemen, Bisnis dan Akuntansi (JIMMBA), 5(1), 44-62.

Prasad, H., Meghwal, D., & Dayama, V. (2018). Digital financial literacy: A study of households of Udaipur. Journal of Business and Management, 5, 23-32.

Morgan, P. J., Huang, B., & Trinh, L. Q. (2019). The need to promote digital financial literacy for the digital age. IN THE DIGITAL AGE.

Ali, H., Purwandi, L., Nugroho, H., Ekoputri, A., & Halim, T. (2017). The urban middle-class millennials Indonesia: financial and online behaviour. Jakarta: PT Alvara Strategi Indonesia.

Normawati, R., Rahayu, S., & Worokinasih, S. (2021, May). Financial knowledge, digital financial knowledge, financial attitude, financial behaviour and financial satisfaction on millennials. In ICLSSEE 2021: Proceedings of the 1st International Conference on Law, Social Science, Economics, and Education, ICLSSEE 2021, March 6th 2021, Jakarta, Indonesia (Vol. 317). European Alliance for Innovation.

Arifin, A. Z. (2018). Influence factors toward financial satisfaction with financial behaviour as intervening variable on Jakarta area workforce.

Kunal, K., Ramprakash, K. R., & Prasad, A. (2025). Enhancing Livelihoods through Digital Finance: A Study on the Impact of FinTech Adoption on the Financial Performance of Hawkers. Qubahan Academic Journal, 5(1), 565-579.

Falahati, L., Sabri, M. F., & Paim, L. H. (2012). Assessment a model of financial satisfaction predictors: Examining the mediate effect of financial behaviour and financial strain. World Applied Sciences Journal, 20(2), 190-197.

De Bassa Scheresberg, C. (2013). Financial literacy and financial behaviour among young adults: Evidence and implications. Numeracy, 6(2), 5.

Saurabh, K., & Nandan, T. (2018). Role of financial risk attitude and financial behaviour as mediators in financial satisfaction: Empirical evidence from India. South Asian Journal of Business Studies, 7(2), 207-224.

Škreblin Kirbiš, I., Vehovec, M., & Galić, Z. (2017). Relationship between financial satisfaction and financial literacy: Exploring gender differences. Društvena istraživanja: časopis za opća društvena pitanja, 26(2), 165-185.

Riitsalu, L., & Murakas, R. (2019). Subjective financial knowledge, prudent behaviour and income: The predictors of financial well-being in Estonia. International Journal of Bank Marketing, 37(4), 934-950.

Ramalho, T. B., & Forte, D. (2019). Financial literacy in Brazil–do knowledge and self-confidence relate with behaviour? RAUSP Management Journal, 54(1), 77-95.

Awan, A. W., & Jamali, J. A. (2016). Impact of corporate governance on financial performance: Karachi stock exchange, Pakistan. Business and Economic Research, 6(2), 401-411.

Budiati, I. et al. (2018). Profil Generasi Millennial Indonesia, pp. 1–153.

Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296-316.

Angeles, I. T. (2022). The moderating effect of digital and financial literacy on the digital financial services and financial behaviour of MSMEs. Review of Economics and Finance, 20, 505–515.

Lyons, A. C., Kass-Hanna, J., Liu, F., Greenlee, A. J., & Zeng, L. (2020). Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa (No. 1098). ADBI Working Paper Series.

Normawati, R., Rahayu, S., & Worokinasih, S. (2021, May). Financial knowledge, digital financial knowledge, financial attitude, financial behaviour and financial satisfaction on millennials. In ICLSSEE 2021: Proceedings of the 1st International Conference on Law, Social Science, Economics, and Education, ICLSSEE 2021, March 6th 2021, Jakarta, Indonesia (Vol. 317). European Alliance for Innovation.

Jennah, H. U. X. L. E. Y. (2022). *OECD/INFE Toolkit for Measuring Financial Literacy and Financial Inclusion 2022*.

Tony, N., & Desai, K. (2020). Impact of digital financial literacy on digital financial inclusion. International Journal of Scientific and Technology Research, 9(1), 1911-1915.

Ajzen, I. (1991). The Theory of planned behaviour. Organizational Behaviour and Human Decision Processes.

Garg, N., & Singh, S. (2018). Financial literacy among youth. International Journal of Social Economics, 45(1), 173-186.

Atkinson, A., Monticone, C., & Mess, F. A. (2016). OECD/INFE international survey of adult financial literacy competencies. Technical Report.

Rajna, A., Ezat, W. S., Al Junid, S., & Moshiri, H. (2011). Financial management attitude and practice among the medical practitioners in public and private medical service in Malaysia. International Journal of Business and Management, 6(8), 105.

Coşkuner, S. (2016). Understanding Factors Affecting Financial Satisfaction the Influence of Financial Behaviour Financial Knowledge and Demographics. Imperial Journal of Interdisciplinary Research (IJIR), 2(5).

Xiao, J. J., & Porto, N. (2017). Financial education and financial satisfaction: Financial literacy, behaviour, and capability as mediators. International Journal of Bank Marketing, 35(5), 805-817.

Hasibuan, B. K., Lubis, Y. M., & HR, W. A. (2018, January). Financial literacy and financial behaviour as a measure of financial satisfaction. In 1st Economics and Business International Conference 2017 (EBIC 2017) (pp. 503-507). Atlantis Press.

Wattles, W. D. (2007). The Science of Getting Rich. USA: Springer.

Arifin, A. Z. (2017). The influence of financial knowledge, control and income on individual financial behaviour.

Keuangan, O. J. (2013). Developing Indonesian Financial Literacy Index. DEFINIT. Asia.

Liu, S., Gao, L., Latif, K., Dar, A. A., Zia-Ur-Rehman, M., & Baig, S. A. (2021). The behavioral role of digital economy adaptation in sustainable financial literacy and financial inclusion. Frontiers in Psychology, 12, 742118.

Aristei, D., & Gallo, M. (2021). Financial knowledge, confidence, and sustainable financial behavior. Sustainability, 13(19), 10926.

Häubl, G., & Trifts, V. (2000). Consumer decision making in online shopping environments: the effects of interactive decision aids. Marketing Science, 19(1), 4-21.

Gu, S., Slusarczyk, B., Hajizada, S., Kovalyova, I., & Sakhbieva, A. (2021). Impact of the covid-19 pandemic on online consumer purchasing behavior. Journal of Theoretical and Applied Electronic Commerce Research, 16(6), 2263-2281.

Mustafa, W. M. W., Islam, M. A., Asyraf, M., Hassan, M. S., Royhan, P., & Rahman, S. (2023). The effects of financial attitudes, financial literacy and health literacy on sustainable financial retirement planning: the moderating role of the financial advisor. Sustainability, 15(3), 2677.

Fan, L. (2021). A conceptual framework of financial advice-seeking and short-and long-term financial behaviors: an age comparison. Journal of Family and Economic Issues, 42(1), 90-112.

D'acunto, F., & Rossi, A. G. (2023). Robo-advice: Transforming households into rational economic agents. Annual Review of Financial Economics, 15(1), 543-563.

Nayak, R. (2018). A conceptual study on digitalization of banking-issues and challenges in rural India. International Journal of Management, IT and Engineering, 8, 186-191.

Aron, J. (2018). Mobile money and the economy: a review of the evidence. The World Bank Research Observer, 33(2), 135-188.

Mahmood, M. A., Bagchi, K., & Ford, T. C. (2004). On-line shopping behavior: cross-country empirical research. International Journal of Electronic Commerce, 9(1), 9-30.

Panos, G. A., & Wilson, J. O. (2020). Financial Literacy and Responsible Finance in the FinTech Era: capabilities and Challenges. Taylor and Francis.

Brüggen, E. C., Post, T., & Schmitz, K. (2019). Interactivity in online pension planners enhances engagement with retirement planning–but not for everyone. Journal of Services Marketing, 33(4), 488-501.

Hentzen, J. K., Hoffmann, A. O., & Dolan, R. M. (2022). Which consumers are more likely to adopt a retirement app and how does it explain mobile technology-enabled retirement engagement? International Journal of Consumer Studies, 46(2), 368-390.

Beal, D. J., & Delpachitra, S. B. (2003). Financial literacy among Australian university students. Economic Papers, 22(1), 65–78.

Mason, C. L. J., & Wilson, R. M. S. (2000). Conceptualising financial literacy. Loughborough: Business school, Loughborough University.

Baker, K., & Nofsinger, J. (2010). Behavioral Finance: Investors, Corporations, and Markets.

Bauer, J. W., Braun, B., & Olson, P. D. (2000). Welfare to well-being framework for research, education, and outreach. Journal of Consumer Affairs, 34(1), 62–81.

Hilgert, M. A., Hogarth, J. M., & Beverly, S. (2003). Household financial management: The Connection Between Knowledge and Behavior.

Huston, S. J. (2010). Measuring financial literacy. *Journal of Consumer Affairs, 96-316*.

Ajzen, I. (1985). From intentions to actions: A theory of planned behavior. In J. Kuhl & J. Beckmann (Eds.), Action control (pp. 11–39). Springer.

Sahni, D. (1994). Financial attitudes and the investment behavior of individual investors: A study of Delhi. Finance India, 8(4), 1092–1104.

Kamil, N. N., Abdul-Rahim, H., & Nawi, N. M. (2014). Factors influencing the youth's borrowing behaviour: Evidence from Malaysia. Asian Social Science, 10(2), 210–220.

Xiao, J. J., & Wu, J. (2008). Applying the Theory of Planned Behavior to retain credit counseling clients. Journal of Financial Counseling and Planning, 19(2), 36–48.

Denan, Z., Ismail, R., & Othman, M. S. (2015). Financial literacy and financial behavior among university students: Evidence from Malaysia. International Journal of Business.

Ashraf, R., & Ibrahim, Y. (2013). The impact of financial attitude and knowledge on borrowing behavior: A case of Malaysian households. International Journal of Social Sciences and Humanity Studies, 5(1), 115–124.

Magendanz, D., Tustin, D., & Esterhuyzen, E. (2017). Modelling the behavioural intention of South African low-income consumers to use formal banking services. Southern African Business Review, 21(1), 162–182.

Normawati, N., Fauziah, F., & Zakaria, N. (2021). The influence of financial literacy, attitude and behaviour on financial satisfaction: A case study among millennials. International Journal of Academic Research in Business and Social Sciences, 11(2), 123–137.

Abdallah, A. M., Zakaria, N., & Ishak, S. (2024). Exploring financial awareness and decision-making in digital finance: Evidence from emerging markets. Journal of Financial Innovation and Digital Economy, 8(1), 45–62.

Hoyle, R. H. (1995). The structural equation modeling approach: Basic concepts and fundamental issues. In R. H. Hoyle (Ed.), Structural equation modeling: Concepts, issues, and applications (pp. 1–15). Sage Publications.

Field, A. (2009). Discovering statistics using SPSS (3rd ed.). Sage Publications.

Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.).

Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis (6th ed.).

Daaire, A. M., Ramayah, T., & Ahmad, N. H. (2008). An assessment model for ERP system implementation. Journal of Business and Policy Research, 3(2), 178–189.

Published

2025-05-23

How to Cite

Bhuvaneshwari , R. ., & K., V. (2025). Digital Financial Knowledge and Its Influence on Lending Application Adoption. Qubahan Academic Journal, 5(2), 322–338. https://doi.org/10.48161/qaj.v5n2a1683

Issue

Section

Articles