The role of Financial Literacy and challenges Faced by Rural Communities in Adoption of Digital Tools: An Empirical study on District Tharparkar

Abstract

This study examines the key factors influencing financial literacy, digital literacy, and digital infrastructure in the adoption of digital financial services (DFS) within Tharparkar District. Despite the increasing significance of DFS in promoting financial inclusion, uptake in rural and underdeveloped areas remains low due to socio-economic and infrastructural constraints. A quantitative research design was employed, using summary statistics, multiple regression analysis, Pearson correlation analysis, and ANOVA to analyse primary data collected from 211 respondents. The study explores the relationship between financial literacy, digital literacy, and DFS adoption, considering various demographic factors such as gender, age, and social rank. The findings indicate that both financial and digital literacy significantly influence individuals’ intention to adopt DFS, thereby enhancing confidence in mobile banking, online transactions, and e-wallet usage. However, weak digital infrastructure, including slow internet connectivity and limited digital service providers, poses a significant barrier, particularly in rural regions of Tharparkar. Additionally, the study identifies gender disparities in DFS adoption, with women facing challenges due to lower digital literacy and restrictive cultural norms. The study emphasizes the need for targeted policy interventions, financial education programs, and digital infrastructure development to bridge the digital divide and promote financial inclusion in rural areas. Addressing these barriers can improve economic participation and enhance financial access for marginalized communities in Tharparkar. This research contributes to the understanding of the factors influencing DFS adoption in rural areas, providing insights into the role of literacy and infrastructure in enhancing financial inclusion, particularly for underserved populations in Tharparkar District.