The current study aims to explore the nexus among digital financial literacy (DFL), access to digital infrastructure, digital financial inclusion (DFI), the purpose of using digital financial services (DFS) and modes of digital operations (DOP) within the context of the Puri district of Odisha, India. It has considered DOP a mediator and will investigate how reliance on others for digital operations affects the use of DFS.
The current study’s evaluation was conducted using Bootstrap to test the hypotheses formulated using PLS-SEM, based on a structured questionnaire administered to 776 respondents.
The findings revealed a significant association between DFL and DFI (the ownership and usage of DFS). The study’s results highlighted that DFI significantly affects the purpose of using financial services on a virtual platform. The study also highlights that, despite people using the digital pathway for various purposes, it remains exclusive, mainly, with some individuals observed to be dependent on others for digital transactions. The presence of the digital divide concerning age and place is also reflected in the study.
The research paper does not throw light on the reasons for low level of DFL among the people in the place of research.
Firstly, this study enriches the current works of research on DFI based on the SEM. The model developed in the study has identified DFL as a higher-order construct (HOC) constituting three items or elements namely proficiency in using digital money accounts (DMP), financial literacy (FL) and awareness of DOP. Secondly, the study highlighted that DFL and access affect the ownership and usage of DFS. It makes people digitally and financially inclusive. An inclusive person uses these DFS for making varied monetary operations through the digital pathway. In the state of inclusiveness, however, it is observed that though people are using the digital pathway for different purposes, they are not inclusive in the real sense. Thirdly, a picture of overall digitalization in the Puri district is presented in the study by showing the digitalization in both urban and rural populations of Puri. The DFL level also varies in the sample of the population.
To the best of the author’s knowledge, the present paper is the first of its kind to reflect DOP as the mediator. The novelty in the present work lies in the fact that research has focused on framing a model of DFI by considering DFL as an HOC to reduce the number of connections between its elements and build a parsimonious and comprehensive model.
