Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India
Journal of Financial Economic Policy
ISSN: 1757-6385
Article publication date: 26 December 2023
Issue publication date: 22 February 2024
Abstract
Purpose
This paper aims to measure the extent of digital financial inclusion (DFI) and examine the effect of socioeconomic characteristics on using government remittances and the adoption of digital financial services (DFS) during the COVID-19 pandemic.
Design/methodology/approach
The World Bank Global Financial Inclusion (Global Findex) database 2021 is used in this study, with a sample size of 3,000 Indian individuals. The study measured the demand-side analysis of DFI, namely, accessibility and usage of DFS with selected socioeconomic characteristics such as gender, age, income, education, being in the workforce and residential status of respondents. The dependent variable is binary in nature; therefore, the logistic regression model is used for the data analysis.
Findings
The results of the study reveal that individuals’ socioeconomic factors, such as female, all the age groups, tertiary education, third- and fourth-income quintile and workforce, are found to have a significant association with “accessibility,” an exogenous variable of DFS. Besides, respondents’ socioeconomic attributes, namely, female, tertiary education, income for all quintiles and workforce, are more likely to use DFSs in the COVID-19 pandemic. The study also finds the residential status of individuals is influencing the accessibility and usage of DFS.
Practical implications
The findings of the study provide valuable insights to the service providers and policymakers regarding the rapid expansion of DFS by digital infrastructure, simplifying the banking procedures and highlighting the importance of digital financial literacy to accomplish government goals through serving the unbanked population and also design strategies for achieving the objectives of Digital India: “Faceless, Paperless, and Cashless” of DFI across the country.
Originality/value
Notable studies used World Bank Findex survey data to explore the determinants of financial inclusion in general. This research is one among the few studies to explore the determinants of India’s DFI. Moreover, this study measured the effect of individual socioeconomic attributes on the adoption of DFSs during the COVID-19 pandemic, which has not been included in prior studies. Therefore, this study has added value to the existing literature on financial technology innovation and DFS for the sustainable development of emerging nations.
Keywords
Acknowledgements
The authors acknowledge the World Bank for using its Global Findex Database 2021 in this study.
Dr Prabhakar Nandru (Corresponding author) is the awardee of the Indian Council of Social Science Research (ICSSR) Post-Doctoral Fellowship (PDF). This research paper is primarily an outcome of the Post-Doctoral Fellowship sponsored by the ICSSR, New Delhi, India.
Funding: Indian Council of Social Science Research; 3-191/2021-22/PDF/SC.
Citation
Nandru, P., Chendragiri, M. and Arulmurugan, V. (2024), "Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India", Journal of Financial Economic Policy, Vol. 16 No. 2, pp. 247-271. https://doi.org/10.1108/JFEP-07-2023-0176
Publisher
:Emerald Publishing Limited
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