The Muamalat Newsletter Vol. 1 2024

FEM eNewsletter | June 2024 12 Understanding the Role of Socio- Economic Factors in Fintech Use Norhaziah Nawai Faculty of Economics and Muamalat Universiti Sains Islam Malaysia Financial inclusion and access to fintech are deeply intertwined with various socio- economic factors that influence the adoption and usage of fintech solutions. One of the key socio-economic factors is the level of income and wealth distribution within a population (Demirguç-Kunt and Klapper, 2013; Allen, Demirguc-Kunt, Klapper & Peria, 2016). Individuals with limited financial resources may find it challenging to afford smartphones, data plans, or other digital devices essential for accessing fintech services. This creates a barrier to entry for the lower-income segments of society, limiting their ability to benefit from fintech solutions. Besides, education levels can also significantly impact fintech adoption. People with higher levels of education may be more likely to adopt fintech solutions, as they have the financial resources and knowledge to The importance of fintech and financial inclusion for poverty reduction and economic growth is attracting the attention of policymakers and academics, owing to a number of issues that, if addressed, can make fintech work better for individuals, businesses, and governments. Financial inclusion and fintech offer several advantages to the economy, governments, and users of financial services. These advantages include expanding financial access for the underprivileged, lowering the cost of financial intermediation for banks and Fintech companies, and raising government spending overall. Despite its advantages, a significant portion of the population has not been sufficiently exposed to fintech or financial inclusion (G20 Summit, 2013). This shows that there is still a gap between the availability, accessibility, and use of finance.