International Journal of Engineering and Management Research

1. Introduction

Financial inclusion functions as a vital economic growth factor that helps reduce poverty in developing nations. Financial inclusion indices demonstrate that service access to bank accounts, credit and insurance matters equally to service quality and actual usage (Demirgüç-Kunt et al., 2022). A supportive business climate, robust infrastructure and proactive government policies are essential enablers. Financial inclusion has become a powerful tool to drive inclusive economic growth specifically for marginalized and underserved communities throughout recent years. Research shows that financial inclusion which provides accessible affordable financial services including savings credit insurance and digital payments directly leads to better socio-economic results (Dos Santos & Harvold, 2017). Financial inclusion serves as a tool to boost economic development while helping people who face distress. Bhatia & Dawar (2024) explains how economic empowerment functions as a connecting factor between financial access, social and political empowerment. The research demonstrates how inclusive financial systems can transform disadvantaged groups into self-determined individuals. Similarly, Pal et al. (2022) highlight the significance of financial inclusion as a tool to improve the economic status of vulnerable populations especially women through financial instruments which boost their decision-making abilities and independence.

Financial inclusion in India demonstrates ongoing development through better banking infrastructure spread throughout urban and rural areas. The Reserve Bank of India (2024) reports states that Public Sector Banks (PSBs) expanded their branch network from 84,404 to 84,859 during March 2023 to March 2024 while Private Sector Banks (PvSBs) grew from 41,258 to 44,691 during this time. The number of rural branches maintained by PSBs exceeds 29,000 while PvSBs expanded their rural branches from 8,417 to 8,924 between 2023 and 2024. The number of ATMs and Cash Recycler Machines (CRMs) indicates that banking service accessibility continues to grow. Public Sector Banks operated 1,34,694 ATMs and CRMs (both on-site and off-site) in March 2024 while Private Sector Banks had 79,884 touch points increasing from 76,975 during the previous year.

People with physical disabilities face institutional barriers that block their complete economic participation by preventing them from accessing banking services, employment opportunities and social security benefits.  Financial inclusion has gained support from development organizations and lawmakers who view it as a path to economic independence and reduced dependency on outside assistance.  The empowerment of this specific demographic has become essential according to their reasoning.

Financial inclusion is crucial for the population, not merely as a means of accessing credit or savings mechanisms but as a pathway to economic agency, livelihood stability and broader socio-economic empowerment. Physical disability often acts as a significant barrier to achieving financial inclusion, limiting access to essential financial services and economic opportunities. There are several research highlights the benefits of financial inclusion for entrepreneurs (Hasan et al., 2023; Ajide, 2020), the literature remains limited concerning the unique challenges faced by physically disabled individuals. Tsatsou (2022) emphasizes that people with physical disabilities, particularly in marginalized urban settings, encounter intersecting barriers, including social stigma, mobility constraints and lack of tailored financial products. These findings are echoed by Wann & Burke-Smalley (2023), who demonstrate significant disparities in financial access across different disability types, underlining the need for disability-specific interventions. Sarker & Khan (2022), through a qualitative study in Bangladesh, further reveals that people with physical disabilities experience exclusion in microfinance programs due to infrastructural inaccessibility and institutional bias. Similarly, Puli et al. (2024) underscore the fragmented policy landscape and lack of inclusive service design as key hindrances. In the Malaysian context, Hanafi et al. (2025) identify gaps in policy implementation and the necessity for a more inclusive financial ecosystem. This oversight presents a significant research gap in understanding the intersection of disability and financial access. While policies aim to promote inclusive finance, the practical challenges for disabled populations remain underexplored empirically. Addressing this gap, the current study poses the research question: what are the dynamics of Financial Inclusion in Enhancing Economic Empowerment among the Physically Disabled and how does physical disability act as a barrier to achieving financial inclusion and what structural or

FinTech technologies, such biometric-enabled mobile banking and voice-assisted applications, have significantly improved accessibility for persons with disabilities, underscoring the critical importance of technological adoption (Akanfe et al., 2025). Furthermore, trust in financial institutions and sufficient financial literacy substantially influences the correlation between access to finance and economic empowerment (Pal et al., 2023). However, systemic issues including bad data on disabled people, not following through on policies and discrimination based on more than one factor still make it hard for everyone to fully participate in the economy (Lara-Rubio et al., 2024). These complications indicate that financial inclusion is inadequate without supplementary measures in education, technology and institutional policy. Promoting inclusive finance is in line with global development goals, especially SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities). It also calls for a multi-faceted strategy to provide people with disabilities more influence both economically and socially. Taking this into account, the following theory is proposed:

H1: Access to Financial Services positively impacts the financial inclusion and economic empowerment of individuals with disabilities.

2.2 Financial Literacy and Awareness

Although there are efforts at the policy level in both developed and developing nations, people with disabilities (PwD) still have trouble getting financial services because of structural and functional constraints. Khan et al. (2022) points to the systematic literature review on how structural and functional barriers in financial inclusion affect Persons with Disabilities through information asymmetry and unsuitable banking procedures and the lack of awareness about disability requirements. The individual obstacles working together prevent PwD from accessing meaningful financial inclusion. Financial literacy functions as the essential tool for solving these problems. The fundamental skill enables people to understand their finances better and build self-assurance for making sound monetary decisions.  The combination of financial education with digital financial technology enables Asian populations to achieve better access to financial products and services according to Ahsan & Ahmed (2023). The research conducted by Gafoor & Amilan (2024) demonstrated that persons with disabilities

 Their analysis reveals that financial institutions which fail to perform well commonly block access to formal financial services thus maintaining financial exclusion.  According to Vo (2024) financial inclusion shows a positive correlation with strong institutions in both low and high income countries when using a worldwide dataset.  According to him institutions minimize transaction costs while decreasing information gaps and building financial system trust which are critical elements for economic participation expansion.  Bongomin et al. (2018) uses social network theory to study the rural situation in Uganda to demonstrate how informal community institutions strengthen official efforts to enhance financial access.  The study by (Bongomin et al., 2017) demonstrates institutional framing as the perception-shaping cognitive and normative systems affecting financial inclusion with financial literacy acting as the intervening factor. Ofoeda et al. (2024) demonstrates how good institutions alongside strong financial regulations work together to boost economic development by simplifying access to financial services for all populations. According to the authors institutions that operate well and financial inclusion systems lead to better resource utilization, investment and savings opportunities for individuals. The authors state that effective institutional frameworks together with inclusive financial systems create conditions which allow people to save money, invest money and make better resource utilization decisions.  The research demonstrates financial inclusion needs an institutional support system which includes formal mechanisms (e.g., regulatory bodies, governance quality) and informal frameworks (e.g., social networks, trust) to achieve lasting financial inclusion. This study posits the following hypothesis:

H3: Institutional support significantly enhances financial inclusion, which subsequently mediates the relationship between institutional quality and economic growth.

2.4 Technological Support

Financial services now reach everyone including people with disabilities (PWDs) through technology which offers multiple access methods, promotes economic involvement and health benefits. The rapid development of financial technology (FinTech) artificial intelligence (AI) and digital platforms has made money accessibility easier.

2.5 Financial Inclusion, Economic Empowerment and Physical Disability: A Moderation Analysis

Financial inclusion serves as a critical enabler of economic empowerment, particularly for marginalized populations, including individuals with physical disabilities. It promotes access to formal financial services such as banking, credit and insurance thereby enhancing participation in economic activities and reducing reliance on informal systems (Bhatia & Dawar, 2024). Lal (2021) states that financial inclusion provides people with the means to generate income and keep their money safe and become powerful.  The link between financial inclusion and empowerment may be impacted by physical impairment because physical disability often creates additional socio-economic challenges that include reduced mobility, digital illiteracy and institutional discrimination (Muuo, 2025). The analysis of moderation helps researchers understand how disability status affects both the size and direction of financial inclusion's relationship with empowerment. Previous research studies have found other variables that influence the process including Sub-Saharan Africa (Bongomin et al., 2018) social networks and female financial literacy. These discussions lead to the assumption of the following hypothesis.

H5: Financial inclusion positively influences economic empowerment among the physically disabled.

H6: Physical disability moderates the relationship between financial inclusion and economic empowerment.

3. Conceptual Framework of the Study

This research study examines the various elements affecting financial inclusion while investigating its impact on the economic empowerment of disabled people.  People with physical disabilities face four main independent variables that influence their level of financial inclusion which include Access to Financial Services, Financial Literacy and Awareness, Institutional Support, and Technology Support.  Multiple research studies demonstrate that these factors serve as essential components to achieve financial inclusion (Bhatia & Dawar, 2024).

capturing constructs developed from validated constructs from existing literature studies: Access to financial services (Beck et al., 2007), Financial literacy and awareness (Lusardi & Mitchell, 2014), Institutional support and Technological support (Demirgüç-Kunt et al., 2022), and Economic empowerment (Kabeer, 1999; Bhatia & Dawar, 2024). A pilot study (n = 50) was conducted to ensure clarity, reliability and validity. Reliability is assessed using Cronbach’s alpha and Composite Reliability (CR), while validity is examined through Confirmatory Factor Analysis (CFA) to verify convergent and discriminant validity (Hair et al., 2021). After assuring the reliability and validity, a full-scale survey was carried out through purposive sampling, targeting 519 respondents who represented various physical impairment levels in Delhi NCR. Participation was voluntary, with the right to withdraw at any time. Descriptive and exploratory analysis is done using SPSS 22.0 while the study employs a mediation analysis using Structural Equation Modeling (SEM) via Smart-PLS 4.0 software (Sarstedt et al., 2022). This extensive empirical approach delivers substantial findings about how financial inclusion affects the situation of disabled people who face economic marginalization.

4.1 Result and Findings

Table 1 presents the demographic characteristics of the respondents, including age, gender, marital and occupational status. In terms of age distribution, the majority of respondents fall within the 22–30 years age group (35.5%, n=184), followed by those aged up to 21 years (31.4%, n=163), 31–40 years (22.4%, n=116) and 41–50 years (10.8%, n=56). Regarding gender, males constitute a significant majority (73.4%, n=381), while females account for 26.6% (n=138) of the sample. Most respondents are married (67.8%, n=352), while 31.2% (n=162) are unmarried and only 1% (n=5) are separated, divorced, or belong to other categories. Occupationally, the largest group is those employed in the private sector (39.1%, n=203), followed by self-employed individuals (19.8%, n=103), students (13.9%, n=72), government employees (13.5%, n=70), unemployed respondents (10.8%, n=56) and a small proportion of retirees (2.9%, n=15). This demographic profile indicates a young, predominantly male and mostly working population.

Overall, the factor loadings across constructs were robust (>0.70), indicating strong internal consistency and reliability of the measurement model.

Table 2: Descriptive Statistics

4.2 Measurement Model

The measurement model results indicate good internal consistency and convergent validity across all constructs. Cronbach’s Alpha values range from 0.882 to 0.948, suggesting high internal reliability (>0.70). Composite Reliability (rho_c) values are all above 0.90, confirming strong construct reliability. The Average Variance Extracted (AVE) values for all constructs exceed the recommended threshold of 0.50, establishing adequate convergent validity, with the lowest AVE being 0.639 (Economic Empowerment) and the highest 0.812 (Financial Inclusion). Variance Inflation Factor (VIF) values are all well below the critical threshold of 5, except for Economic Empowerment and Institutional Support (4.679 and 4.680), which are near the acceptable upper limit but still not indicative of multicollinearity concerns. Table3 results suggest the measurement model is statistically sound and suitable for further structural analysis.

Table 5 findings suggest that while most constructs are adequately distinct, careful re-evaluation or potential item refinement may be necessary

4.3 Structural Model and Hypothesis Testing

The structural model's fit, as presented in Table 5, demonstrates varying levels of explanatory power and predictive accuracy across constructs. The R-square value for Economic Empowerment is exceptionally high at 0.966, indicating that the model explains 96.6% of the variance in this construct, supported by a strong Q²predict value of 0.959 and low RMSE (0.203) and MAE (0.171), confirming high predictive relevance and accuracy. In contrast, Financial Inclusion shows a low R-square (0.057) and Q²predict (0.035), suggesting weak explanatory and predictive power for its associated predictors. Regarding overall model fit,

the SRMR of the saturated model (0.075) is below the recommended threshold of 0.08, indicating acceptable fit, although the estimated model SRMR (0.189) exceeds acceptable limits, suggesting potential misspecification. Additionally, the Normed Fit Index (NFI) values of 0.546 (saturated) and 0.520 (estimated) are below the recommended cut-off of 0.90, indicating poor model fit. High Chi-square values and significant discrepancies between d_ULS and d_G also hint at limited global model fit. Overall, while the model performs well in explaining and predicting Economic Empowerment, it shows limitations in model fit and in predicting Financial Inclusion.

The structural model results (figure 2 and table5) reveal several statistically significant relationships. The path coefficient (β) from Access to Financial Services to Financial Inclusion is 0.104 with a t-value of 2.006 and p = 0.045, indicating a significant but modest positive effect. Financial Inclusion significantly enhances Economic Empowerment (β = 0.065, t = 3.295, p = 0.001). However, Financial Literacy and Awareness does not significantly influence Financial Inclusion (β = 0.016, t = 0.255, p = 0.799). In contrast, Institutional Support (β = 0.188, t = 5.309, p = 0.000) and Technology Support (β = 0.148, t = 3.508, p = 0.000) both show significant positive effects on Financial Inclusion. Notably, Physical Disability has a strong and highly significant negative effect on Economic Empowerment (β = -0.922, t = 50.976, p = 0.000) and the interaction term (Physical Disability × Financial Inclusion) shows a significant positive moderating effect (β = 0.034, t = 3.620, p = 0.000), suggesting that Financial Inclusion helps mitigate the adverse impact of disability on empowerment. Overall, most hypothesized relationships are statistically significant, except for the effect of Financial Literacy and Awareness.

Table 6: Structural Model and Hypothesis Testing

(Demirgüç-Kunt et al., 2022; Sarma, 2016). The analysis demonstrates that institutional backing together with technological resources play an essential role in removing barriers to access for disadvantaged groups.  The study reveals that financial awareness does not lead to financial inclusion because it contradicts traditional views and shows that knowledge alone does not translate to effective action without useful tools and simple services (Grohmann et al., 2018). The research demonstrates that financial inclusion produces positive effects on economic empowerment which supports the idea that financial instrument access and utilization leads to better autonomy and economic resilience (Bhatia & Dawar, 2024). The strong moderating effect of financial inclusion on physical disability and economic empowerment demonstrates its ability to reduce structural barriers thus supporting targeted inclusion strategies for vulnerable groups.  The findings validate the idea that system-level technological and policy-based initiatives have a stronger impact on economic empowerment of people with disabilities than individual knowledge-based approaches. The minimal relationship between financial literacy and financial inclusion (β = 0.016, SD = 0.062, t = 0.255, p = 0.799) indicates that basic financial understanding does not automatically translate into active financial system participation especially for vulnerable groups including physically disabled individuals.  The research findings challenge the prevailing assumption that financial education stands as the main driver for financial inclusion (Grohmann et al., 2018). The structural and contextual barriers including inaccessible banking infrastructure and missing tailored financial products and socio-cultural stigma could prevent inclusion even when individuals have sufficient understanding (Demirgüç-Kunt et al., 2022). Financial behavior is influenced by factors which extend beyond cognitive understanding including institutional trust, digital accessibility and past financial experiences (Xu & Zia, 2012). Financial literacy programs alone are insufficient to achieve inclusion because they need to address the institutional, physical and technical barriers that prevent access. These results show that we need a comprehensive and inclusive approach that combines financial education with supportive rules and service design that works for everyone.

Lastly, as financial inclusion has been found to lessen the negative effects of physical handicap on empowerment, stakeholders should see it as a strategic tool not only for economic growth but also for improving social equity and human rights.

7. Conclusion, Limitations and Future Scope of the Study

The research demonstrates that financial inclusion stands as a vital factor which enhances economic empowerment for people with physical disabilities. People gain empowerment through financial access, institutional support and technological advancements yet physical impairment remains a significant obstacle to empowerment.  Financial inclusion acts as a transformative tool to reduce structural disparities because it counteracts the negative effects of physical impairment.  The study challenges the overemphasis on financial literacy because it demonstrates that such education has limited impact when there is no complete infrastructure and support systems in place. The research findings require financial inclusion programs to evolve from awareness-based approaches toward integrated accessibility-focused frameworks. This research provides both theoretical improvements and practical guidance to enhance financial justice for disadvantaged groups which leads to more inclusive economic development.

This study provides significant insights; nonetheless, it possesses certain drawbacks. The study predominantly utilises data from a particular demographic and geographic context, thus constraining the applicability of the results to other people or places. The cross-sectional design of the study limits the capacity to deduce long-term causal links between financial inclusion and economic empowerment. The model's inadequate fit indicates the potential existence of other, unassessed variables affecting financial inclusion outcomes, like cultural views, institutional trust, or intersecting identities (e.g., the combination of gender and disability). Subsequent research may utilise longitudinal methodologies to monitor empowerment trajectories over time or broaden the investigation across various areas and disability classifications for a more comprehensive comparative examination.

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