Digital Financial Inclusion in Rural India: Findings from NSS 77th Round Survey

Digital financial inclusion (DFI) is an announced priority of the Government of India. Digital integration of rural people could boost digital transactions and inclusive growth in the rural economy. Such transactions may be electronic card-based or mobile phone-based. However, lesser access to smartphones and the internet limits phone-based transactions for a large section of rural India. So, DFI might be fostered by providing greater access to debit or credit cards (payment cards) for the rural population. Existing studies on such card ownership in India are limited to bank-level analysis or confined to local-level case studies. Such analyses fail to shed light on the household-level access and usage of payment cards across India. This study bridges this knowledge gap using the latest round of the ‘All India Debt and Investment Survey’ (2019). This study finds that access to banking is almost universal throughout rural India, but the same is not true for payment cards. Two logistic regressions are estimated to identify the factors influencing access and usage of payment cards at the household level. Results suggest that promoting rural self-help groups, co-operative societies and increasing bank branch density can foster DFI in rural India. The central region in India requires special attention in this regard. JEL Codes: G21, R20, O18