Building Financial Resilience through Digital and Financial Literacy

Abstract

This study is aimed at the critical role of digital and financial literacy in enhancing financial resilience with a specific focus on the context of Pakistan. The research objectives include examining the effects of digital literacy, financial literacy, and financial inclusion on financial resilience in line with exploring the moderating influence of Value-Based Intermediation (VBI) on these relationships. The comprehensive literature review delves into the intricate dynamics of financial resilience, financial literacy, digital literacy, and its impact on financial inclusion, shedding light on the growing demand for digital literacy and the significance of Value-Based Intermediation. The findings of the study underscore the pivotal significance of financial literacy in augmenting financial resilience, revealing that individuals with higher levels of financial literacy demonstrate greater financial resilience. Similarly, the study highlighted the positive impact of digital literacy on financial resilience, emphasizing the role of digital literacy in facilitating efficient financial management employing digital financial services and tools. Moreover, this research weighs into the existing body of knowledge by evolving a multidimensional measure for digital literacy and evaluating the corollaries and impacts of financial literacy. The study's cross-national approach provides valuable insights into countries with varying national policies regarding financial inclusion, financial literacy, and digital literacy, offering implications for policymakers and financial institutions. In conclusion, the study emphasizes the significance of digital and financial literacy in fortifying financial resilience in Pakistan. The findings hold substantial implications for policymakers, financial institutions, and individuals, advocating for targeted efforts to enhance digital and financial literacy in the country to foster greater financial resilience and well-being.