Digital Financial Literacy: The Necessary Ingredient for Digital Financial Inclusion and Bridging the Digital Divide in Liberia: An Empirical Review

In Liberia, as in many developing economies in sub-Saharan Africa, the rapid evolution and adoption of digital financial services such as MTN MoMo, Orange Money, Tip Me, BNB, Kola Cash, and digital banking applications have surpassed the development of a comprehensive nationwide digital financial literacy awareness campaigns and educational programs. This gap lowers Liberia’s digital financial inclusion rate and impedes initiatives to bridge the country’s digital divide. As digital financial services expands in Liberia, assessing the impact of digital financial literacy on both digital financial inclusion and the digital inclusion becomes increasingly important. This study examines the influence of digital financial literacy on digital financial inclusion and digital inclusion in Liberia using a quantitative methodology. Data were collected from 650 respondents across Montserrado, Margibi, Grand Bassa, and Bomi counties utilizing a customized OECD-structured digital financial literacy questionnaire. The digital financial literacy index score, digital financial inclusion rate, and digital inclusion rate for all four counties were constructed using the OECD digital financial literacy measurement tool and a 3–7-point Likert scale adapted from the Australian Digital Inclusion Index, the World Bank, and the World Food Program (WFP) digital financial inclusion measurement scale. Results demonstrate that digital financial literacy is directly and positively associated with digital financial inclusion and digital inclusion in Montserrado, Margibi, Grand Bassa, and Bomi counties. Montserrado County recorded above-average digital financial literacy index mean scores, while Margibi, Grand Bassa, and Bomi counties reported moderate mean index scores. Digital financial inclusion rates were 56.39% in Montserrado, 50.44% in Margibi, 35.11% in Grand Bassa, and 34.56% in Bomi. Digital inclusion rates were 58.58% in Montserrado, 48.37% in Margibi, 36.74% in Grand Bassa, and 37.89% in Bomi. These findings highlight digital financial literacy as a critical enabling factor for promoting nationwide digital financial inclusion and narrowing digital divide gaps in Liberia.