GENDER RISK PERCEPTIONS AND DIGITAL FINANCE ADOPTION IN PAKISTAN: STRUCTURAL CONSTRAINTS, TRUST AND INCLUSION

Abstract

This study examines the determinants of digital financial adoption in Pakistan using primary survey data collected from 520 individual respondents. Drawing on the technology acceptance model, financial literacy theory, and institutional trust perspectives, the study model adoption as a function of perceived risk, structural constraints, institutional trust, financial literacy, and gender. A multivariate regression framework is employed to estimate the baseline specification, with additional estimation techniques applied to address potential endogeneity concerns. The empirical findings indicate that financial literacy is the only statistically significant predictor of digital financial adoption and exhibits a negative coefficient across specifications. This counterintuitive result suggests that higher financial awareness may increase sensitivity to digital vulnerabilities and institutional limitations, thereby reducing adoption likelihood. Perceived risk, structural constraints, and institutional trust do not demonstrate statistically significant effects after controlling for covariates. Gender is included as a control variable to account for observable differences in adoption patterns but does not alter the primary relationships. Although the model’s explanatory power is modest, the findings contribute to the micro-level econometric literature on digital financial inclusion in emerging economies by highlighting the contextual complexity of financial literacy effects. The results underscore that expanding digital infrastructure alone is insufficient to ensure meaningful adoption without strengthening institutional safeguards and user confidence mechanisms.