ASSESSMENT OF THE FACTORS INFLUENCING THE ADOPTION OF FINANCIAL TECHNOLOGY IN TANZANIA

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