Adopting Digital Financial Technology in Madhya Pradesh, Central India: Opportunities, Challenges, and Determinants

This study aims to investigate the contribution of digital financial technology in fostering financial inclusion and comprehensively explore digital financial inclusion for Madhya Pradesh, Central India, using data from a field survey. In doing so, we identify the determinants of digital financial inclusion and the challenges faced by individuals during the use of numbers (a person may use one, two, or more digital financial inclusion instruments) of digital financial modes by employing the logistic and Poisson regression models. Our findings highlight that adoption of digital financial technology varies across individuals based on their demographic, social, and economic status: age, caste, gender, education, income, and occupation. In addition, findings from regression results reveal a positive and significant association between educational attainment and digital financial inclusivity, while age shows a non-linear and inverted U-shaped relationship with digital financial inclusion, which means that people with younger and higher education levels are likely to adopt more digital transaction modes than their counterparts, while females tend to utilize fewer such modes of financial transaction. Additionally, our study reveals that individuals with diverse demographic and socioeconomic backgrounds encounter various challenges in adopting major digital transaction modes, including Aadhaar number-, credit/debit card-, wallet-to-wallet-, and SMS-based methods. These insights contribute significantly to the existing literature on digital financial inclusion, providing policymakers and practitioners with valuable guidance to enhance the accessibility and efficiency of digital financial services, particularly among economically and socially vulnerable segments of society.