Digital Literacy and Its Impact on Financial Inclusion among Women in Semi-Urban Punjab: A Survey-Based Study

Abstract

Financial inclusion — broadly defined as access to affordable and useful formal financial products and services — has been a cornerstone of India's development policy agenda for over a decade. The Government's flagship programmes, from Jan Dhan Yojana to the Pradhan Mantri Mudra Yojana to the recently expanded PM Vishwakarma scheme, have collectively opened hundreds of millions of new bank accounts and extended formal credit to previously unbanked populations. Yet account ownership and genuine financial inclusion are not the same thing: a Jan Dhan account that receives a government transfer payment once a quarter but is never used for savings, credit, or digital transactions represents formal inclusion without functional inclusion. Digital literacy — the ability to use smartphones, banking apps, UPI interfaces, and online financial portals — has emerged as the decisive link between account ownership and meaningful financial participation. This study investigates the relationship between digital literacy levels and the degree of financial inclusion among women in semi-urban Punjab, using primary survey data from 230 women respondents drawn from three semi-urban towns — Khanna, Moga, and Phagwara. A digital literacy index comprising 12 items was constructed and validated, and financial inclusion was measured across four dimensions: account ownership, active digital transaction usage, access to formal credit, and insurance coverage. Correlation and multiple regression analysis were employed. Digital literacy score was the strongest predictor of financial inclusion (β = 0.44, p < 0.001), stronger than education level, income, or age. Smartphone ownership alone, without functional digital literacy, showed no significant association with financial inclusion. The study underlines the critical role of targeted digital skill-building programmes for women in semi-urban areas and offers specific, evidence-backed recommendations for government, banks, and NGOs working in the financial inclusion space.

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