The mediating role of trust in the relationship between financial literacy and financial inclusion of vulnerable groups :

Abstract

The study aimed at examining the mediating role of trust in the relationship between financial literacy and financial inclusion of vulnerable groups, a case of youth and women groups in Pallisa district. A cross-sectional study design was adopted and the quantitative approach was applied. Data was solicited through a survey tool from a sample of 175 groups in Pallisa district out of the population target of 320 vulnerable groups of women and youth basing on Krejcie and Morgan (1970). The study sought to examine whether (i) the relationship between financial literacy and financial inclusion exists; (ii) the relationship between financial literacy and trust exists; (iii) the relationship between trust and financial inclusion exists; (iv) the mediation role of trust in the relationship between financial literacy and financial inclusion exists. The results revealed apositive and significant relationship between the variables; financial literacy and financial inclusion; financial literacy and trust; trust and financial inclusion. Also, the findings depict trust as a partial mediator in the relationship between financial literacy and financial inclusion. The study on the account of the findings recommends that financial literacy education and approaches to community groups should be put in place to improve financial services at all levels of society by conducting periodic education training as this helps to understand the various kinds of financial products and services increasing on the social inclusivity and their general welfare. Also, vulnerable groups should foster deeper connections and build long term partnerships with financial institutions and other funding bodies through trust as this helps to achieve conscious efforts to develop solid relationships with them on general financial wellbeing.