Fintech Innovation, Financial Literacy, And Financial Inclusion among Fishing Communities in Turkana County, Kenya

Abstract

The rapid growth of FinTech innovations, such as mobile money services and online banking applications, has significantly enhanced financial accessibility and convenience in Kenya. Despite this progress, the specific effects of these innovations on financial inclusion among fishing communities, a crucial yet often marginalized community, remain underexplored. Therefore, this study investigated Fintech Innovation and Financial Inclusion among Fishing Communities in Kalokol and Kangatotha Ward, Turkana County, Kenya, guided by four objectives: it (i) assessed the extent of use of FinTech innovations among fishing communities in Turkana County in Kenya, (ii) assessed the level of financial inclusion among fishing communities in Turkana County in Kenya,(iii) evaluated the effect of FinTech innovations on financial inclusion among fishing communities in Turkana County, Kenya and (iv)To examine the moderating effect of financial literacy on the relationship between FinTech innovations and financial inclusion among fishing communities in Turkana County, Kenya. The study was grounded in three theoretical frameworks: the Technology Acceptance Model (TAM), the Financial Intermediation Theory, and the Diffusion of Innovations Theory, and TAM served as the anchor theory. The study employed a correlational research design for quantitative data collected from structured questionnaires, and a phenomenological design for qualitative data gathered through semi-structured interviews. Quantitative data were analyzed using descriptive statistics, correlation, and regression analysis in SPSS, while qualitative data were thematically analyzed using Dedoose. Parametric tests, such as linearity tests and factor analysis, were conducted to validate the relationships between variables. Quantitative findings revealed high adoption of FinTech, particularly mobile money services such as M-Pesa, which were widely used for payments, transfers, and small business operations, while uptake of digital credit platforms was low due to limited financial literacy and trust concerns. The analysis indicated moderate to high levels of financial inclusion in terms of usage, though the diversity of services, such as loans, insurance, and investment, remained moderate, highlighting untapped potential. A strong positive correlation (r = 0.68) was found between the frequency of FinTech innovation and access to diverse services, with regression analysis confirming FinTech innovation as a significant predictor of financial inclusion. Moderation analysis showed that financial literacy strengthened the relationship between FinTech innovation and financial inclusion, suggesting that both usage and knowledge are critical drivers of inclusion. Based on these findings, the study offered various recommendations, including investment in digital infrastructure and inclusive regulation by policymakers, financial literacy and inclusion programs by NGOs and donors, and integration of FinTech literacy into adult education programs. Overall, the study provided valuable insights into how digital financial innovations can promote inclusion in underserved communities while advancing the Sustainable Development Goals on poverty reduction and inequality, and Kenya Vision 2030’s aim of expanding financial access.