From Access to Ability: The Impact of Financial Inclusion on Financial Knowledge, Capabilities, and Literacy Among Gen Z University Students in South Africa

Financial inclusion is widely promoted as a mechanism for enhancing financial empowerment, yet evidence on how access to formal financial services translates into individual financial competencies remains limited, particularly in emerging market youth contexts. This study examines the effect of financial inclusion on financial knowledge, financial capabilities, and financial literacy among Generation Z university students in South Africa. Using cross-sectional survey data from 428 students at a public university and analysing the data using partial least squares structural equation modelling (PLS-SEM), this study finds that financial inclusion has a positive and statistically significant effect on all three dimensions of financial human capital. However, descriptive results reveal a nuance between relatively high levels of financial inclusion and more moderate, heterogeneous levels of financial capability. Additional analyses uncover important heterogeneities: female students exhibit higher financial outcomes and stronger inclusion effects than males, while financial inclusion translates into improved financial capabilities and literacy only for commerce students. For non-commerce students, inclusion is associated with higher financial knowledge but not with applied financial skills or literacy. These findings highlight the conditional nature of financial inclusion and underscore the need to complement access with structured financial education and capability-building interventions in emerging market contexts.