An Empirical Assessment of Mediating Role of Financial Self Efficacy on Financial Literacy and Financial Inclusion in Pakistan


  • Nimra Noor Banking Service Officer at Allied Bank Limited Grain Market, Sahiwal Campus
  • Irem Batool Department of Economics and Statistics, University of Management and Technology, Lahore d
  • Hafeez Ur Rehman Department of Economics and Statistics, Dr. Hassan School of Management, University of Management and Technology, Lahore.



financial literacy; financial Self-efficacy; financial inclusion; Pakistan


Financial inclusion refers to having an account in a recognized financial organization that enables people to formally save, borrow cash, and have insurance and use payment services. The study revealed that financial account ownership is just a nominal form of financial inclusion as people own the financial accounts just to keep their money safe (as in lockers) and to withdraw their salaries in the financial accounts. While the real financial inclusion is a much deeper concept that depends upon the users’ actual ease of access to the financial institution, the active utilization of various financial products (like saving accounts, loans and credits, insurance and remittances services, etc.) of the financial system and the user’s acquired satisfaction level by using the financial products and services. The study used this approach and measured the financial inclusion of individuals based on their real experiences in terms of access, usage and satisfaction level derived from financial institutions using their financial products and services. The target population of the study is the adult population aged above 20 years, having a financial account in district Sahiwal. The study used the self-administered questionnaire-based survey and collected the responses on individuals’ socio-demographic characteristics, financial inclusion, financial literacy and financial self-efficacy. Further, a study linked financial inclusion with the individual’s financial literacy and financial self-efficacy levels.  Estimated results prove that financial literacy has a positive and significant impact on financial inclusion. Besides, it is also proved that an individual’s financial self-efficacy level serves as a mediator and further strengthens the individual ability to acquire, use more confidently and get economic benefits from financial accounts.