Linkage Between Self-Control, Financial Innovations and Financial Inclusion. A Moderated Mediation Analysis Across Levels of Financial Literacy (The case of owners of Microenterprise in Kenya)

Financial Inclusion has been conjectured as a driver of social development with benefits accruing both at micro and macro levels. Finance theory suggest that behavioral factors influence the utilization of financial services and adoption of emerging innovations and that financial has an effect on optimal usage of financial services. Studies that examines the combined effects of behavioral factors, financial innovations and financial literacy in determining the effect on utilization of financial services are scanty, yet the latter is deemed as a key driver in realization of a number of United Nation’s Sustainable Development Goals (2030). The study extended prior suppositions by integrating the three variables into a novel model of moderated mediation. Thus, the linkage between self-control, which is a behavioral factor, adoption of financial innovations and utilizations of diverse everyday financial services was examined. The relationship between the three variables was further tested for the moderating effects of various levels of financial literacy of the sampled users of the financial services. Data was collected using a structured questionnaire from the randomly sampled owners/or their representatives of microenterprises in Nairobi, Kenya. The hypotheses were tested using relevant models in Process Macro [52]. The conditional indirect effects were attested, thus the conclusion that financial innovations mediates the self-control and financial inclusion relations if entrepreneurs hold sufficient levels of financial literacy. The strength of the mediated effect varied with levels of financial literacy. Implications for theory growth and policy interventions are discussed.