The mediating role of digital financial inclusion in enhancing financial well-being among B40 households in Malaysia

Malaysia has set ambitious goals to achieve high-income country by 2030, with financial well-being one of the key aspects of this transformation. Enhancing financial well-being is essential, as it directly impacts the stability and resilience of households. Despite this, persistent financial disparities among B40 households continue to challenge national efforts toward inclusive economic development. This issue is particularly significant for low-income populations with limited retirement savings. This study examines the financial well-being of B40 households by investigating the relationships among financial services infrastructure, financial service providers, financial capability, digital financial literacy, and trust. Additionally, the study explores the mediating role of digital financial inclusion in these relationships. The research framework is grounded in three theoretical foundations: systems theory, Schumpeter’s theory of innovation, and vulnerable group theory. This quantitative study employed purposive and quota sampling methods, targeting B40 households in Malaysia. A total of 324 valid responses were collected for analysis. The proposed model was tested using Partial Least Squares Structural Equation Modelling (PLSSEM). The findings indicate that financial service providers, financial capability, and trust have a positive influence on financial well-being. In contrast, financial services infrastructure and digital financial literacy do not exhibit a direct effect on financial well-being. Additionally, digital financial inclusion is positively associated with financial well-being. The results demonstrate that financial services infrastructure, financial service providers, financial capability, digital financial literacy, and trust are positively associated with digital financial inclusion. Furthermore, each of these five factors indirectly influences financial well-being through digital financial inclusion. Therefore, digital financial inclusion serves as a complementary mediator in the relationships among financial service providers, financial capability, trust, and financial well-being. Additionally, digital financial inclusion functions as an indirectonly mediator between financial services infrastructure, digital financial literacy, and financial well-being. The study offers practical implications for policymakers, highlighting the importance of strengthening digital financial ecosystems, fostering trust, and investing in tailored digital financial literacy programs for B40 households. From a theoretical perspective, the study enriches the understanding of financial wellbeing by integrating multidisciplinary frameworks and provides actionable insights for financial service providers seeking to effectively engage B40 households