FINTECH ADOPTION, FINANCIAL LITERACY, AND FINANCIAL INCLUSION AMONG MILLENNIALS IN INDONESIA

Abstract

This study investigates the relationships among fintech adoption, financial literacy, and financial inclusion among Indonesian millennials aged 21 to 40 years, using a Partial Least Squares Structural Equation Modelling (PLS-SEM) approach applied to survey data from 385 respondents sampled from five major Indonesian cities. The study examines the direct effects of fintech adoption and financial literacy on a multidimensional financial inclusion composite index, and tests the partial mediation of financial literacy in the fintech adoption-financial inclusion pathway. Measurement model assessment confirms strong reliability and validity across all constructs, with composite reliability values ranging from 0.84 to 0.93 and HTMT discriminant validity ratios all below 0.85. Structural results indicate that fintech adoption is the stronger direct predictor of financial inclusion (beta 0.42, p < 0.001), followed by financial literacy (beta 0.28, p < 0.001). The bootstrapped indirect effect of fintech adoption on financial inclusion through financial literacy is positive and significant (indirect effect 0.118, 95% CI [0.071, 0.178]), confirming partial mediation. Heterogeneity analysis reveals that the fintech-inclusion relationship is significantly stronger among respondents with above-median financial literacy scores, confirming the complementarity between digital financial service access and financial knowledge. These findings contribute to the growing literature on digital financial inclusion in emerging economies and carry important implications for integrated fintech regulation, financial education policy, and financial inclusion programme design in Indonesia.