Digital finance literacy, digital infrastructure and digital exclusions: an empirical survey of disadvantaged rural communities in India

Purpose Financial literacy refers to the awareness, knowledge, skills, attitude, and behaviour necessary to make sound financial decisions. This study aims to investigate the links between digital finance literacy and rural households' digital exclusion, particularly in the Indian context. Design/methodology/approach Using a structured questionnaire, a conceptual model is developed and empirically tested after data collection from 660 rural households in Tamil Nadu, India. Using hierarchical regression, the study finds that rural households' digital finance literacy is significantly associated with their digital exclusion. Specifically, higher levels of digital finance literacy correspond to lower levels of digital exclusion across social, economic, technological, service, and behavioural dimensions. Findings Findings indicate that digital finance infrastructure mediates the relationship between rural households' digital finance literacy and various digital exclusion factors (social, economic, technological, service, and behavioural). Finally, the findings of the mediation analysis suggest a partial mediation of rural households’ digital finance literacy with social, economic, and behavioural exclusions, and full mediation exists with technological and service exclusions. Originality/value Studies on digital financial literacy in disadvantaged groups are scarce; this study demonstrates that enhancing digital infrastructure can mitigate technology and service exclusions. The findings of this study will be helpful to the government, financial institutions, banks, and other non-banking institutions in improving infrastructure platforms, developing niche products, and providing the best services to meet end users' needs.