Purpose Financial inclusion remains limited for rural women in developing countries. To address this gap, this study examined the mediating role of financial literacy in the relationship between Village Savings and Loan Associations (VSLAs) participation and financial inclusion, thereby shedding light on the mechanisms and outcomes of VSLA involvement. Design/methodology/approach The study examined 72 VSLA comprising 1,944 women in Ghana’s Kpandai District. Using simple random sampling, 265 women from 5 rural communities were selected. Partial least squares structural equation modelling was used to test both the direct and indirect effects of VSLA participation on financial inclusion, with financial literacy as a mediator. Findings The results revealed that VSLA participation significantly improved financial literacy among rural women. However, VSLA participation did not directly predict financial inclusion. Instead, financial literacy fully mediated this relationship, indicating that increased financial knowledge and skills acquired through VSLAs ultimately fostered broader financial inclusion. Originality/value This study is valuable for its novel approach, utilising an integrated theoretical and conceptual model to empirically validate the emerging discourse on the impact of participation and the role of financial literacy in linking access to community-based savings groups with meaningful financial inclusion for vulnerable populations. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2024-0834
Asitik et al. (Tue,) studied this question.