Abstract:
The main purpose of the study was to assess the factors that influencing the adoption
of Financial Technology in Tanzania taking Dar es Salaam as a study area. The study
focused on three specific objectives namely to investigate the impact of informal
financial system practices on the adoption of FinTech in Tanzania, to assess how
security concerns influence the adoption of FinTech services and to examine the
effect of financial literacy on the adoption of FinTech in Tanzania. The study was
guided by the Unified Theory of Acceptance and Use of Technology (UTAUT) and
the Technology Acceptance Model (TAM). The study adopted positivism research
philosophy and employed quantitative method in data collection using structured
questionnaire. A cross-sectional design was employed, with data from 344
respondents analyzed using Partial Least Squares Structural Equation Modeling
(PLS-SEM) via SmartPLS 4 software. Findings indicate that informal financial
systems practices negatively impact FinTech adoption (β = -0.262, p < 0.001) driven
by factor such as trust in traditional practices. Security concerns significantly deter
adoption of Fintech (β = -0.322, p < 0.001) due to fears of fraud and data breaches.
In contrast, financial literacy positively influences adoption of FinTech (β = 0.210, p
< 0.001) enabling users to utilize digital platforms effectively. Recommendations
target knowledge implications, policymakers, financial institutions, and FinTech
providers, emphasizing the need for tailored financial literacy initiatives, robust data
protection measures, and strategies that integrate informal systems to enhance
FinTech adoption, ultimately promoting financial inclusion and economic
development
