Financial literacy and inclusion for rural agrarian change and sustainable livelihood in the Eastern Cape, South Africa

Finance and growth underpin the debate on the implication of financial literacy and financial inclusion for development among scholars. While financial inclusion and financial literacy are positioned as enablers of sustainable development, literature has failed to link the two with sustainable development, especially for rural agrarian dwellers in dire need of financial development attributes. Therefore, this study applied variance-based structural equation modelling to examine the implication of financial literacy and financial inclusion for the sustainable livelihood of rural agrarian settlers in the Eastern Cape province of South Africa. Global scales were adapted and validated before administering them to 283 farmers and subsistence businesses in the region. The results revealed that financial literacy positively and significantly influences financial inclusion (β = 0.452) and the attainment of sustainable livelihood (β = 0.444). Financial inclusion partially mediates the influence of financial literacy on sustainable livelihood (β = 0.253), as it directly explains the province's sustainable livelihood (β = 0.114). The study's implication informs structured intervention for improving financial literacy to assist the target group with access to requisite funding, which could support their economic activities for a decent living.