Financial Technology Adoption and Financial Inclusion of Underserved Groups in Commercial Banks in Nakuru County, Kenya.

Abstract

Financial inclusion, defined as the ability of individuals and businesses to access and effectively use affordable, appropriate and sustainable formal financial services, is vital for economic empowerment and resilience. Despite Kenya achieving an overall financial inclusion rate of 84.8% in 2024, disparities persist, particularly among women and rural youth, while only 18.3% of adults are financially healthy. Barriers such as low digital literacy, inadequate infrastructure, socio-cultural norms and limited trust in digital platforms constrain meaningful engagement with commercial bank services. Therefore, the purpose of this study was to examine the influence of financial technology (FinTech) adoption on the financial inclusion of women and youth customers of commercial banks in Nakuru County, Kenya. It specifically examined the effect of mobile banking, agency banking, digital credit systems and internet banking on financial inclusion. The study was anchored on the Financial Intermediation Theory, the Technology Acceptance Model, the Diffusion of Innovation Theory and the Financial Inclusion Theory. A descriptive correlational research design was adopted, targeting women aged 18–60 years and youth under 35 years who use commercial bank and mobile-linked financial services in Nakuru County. A sample of 185 respondents was determined using Cochran's formula and selected through stratified random sampling. Primary data were collected using a structured questionnaire administered online, and both descriptive and inferential statistical methods, namely Pearson correlation and multiple regression analysis, were used to analyse the data, which were presented in tables and discussed. The findings revealed that the four FinTech channels jointly explained 53.6% of the variation in the financial inclusion of women and youth (F = 13.842, p < 0.05). Mobile banking had the strongest positive and significant effect on financial inclusion, followed by agency banking and digital credit systems, while internet banking had a positive and significant but comparatively weaker effect. The study, therefore, recommends that commercial banks should expand mobile banking infrastructure and enhance system reliability, expand and strengthen agency banking networks, strengthen digital credit infrastructure through improved credit scoring and automated loan processing, and improve internet banking interface design, while policymakers should promote digital financial literacy, reliable internet access and cybersecurity awareness among women and youth.