Impact of the Digital-Income Level Divide on Financial Inclusion of Informal Traders in the Tanzanian Context

Abstract

Purpose: Numerous studies have been conducted on digital finance and financial inclusion. However, there is limited information on the impact of the digital income level divide on the financial inclusion of informal practitioners. Thus, there is a need to examine the area critically from the perspective of a marginalised society. Hence, the current study focused on identifying the components of the digital income level divide and establishing its impact on the financial inclusion of informal traders. Methodology: The study applied a mixed-methods research design whereby interviews and questionnaires were employed to collect data. Quantitative and qualitative data were analysed using inferential statistics and content analysis, respectively. Findings: The findings show that the digital-income level divide has resulted from digital usage, the insignificance of the benefits of digital finance usage, low income levels, and the practical nature of informal traders. Also, informal traders pay high transaction costs, which are not considered beneficial for the services of receiving and sending money. Originality/Value: The paper informs on the set of strategies that enable informal traders to become part of digital financial users and benefit from financial inclusion. This study adds knowledge to the literature on the combined impacts of income level and digital divide challenges associated with informal traders on financial inclusion.