Financial Inclusion Beyond Bank Accounts: Digital Welfare Access among India’s Low-Income Population

Abstract

This digital welfare delivery and exclusion by analysing financial access, the use of digital payment, receipt of government welfare payments, barriers to trust and administrative barriers for low-income populations. A quantitative secondary data method was used, with data from the Global Findex on account ownership, digital financial participation, receipt of government transfers, mobile and internet access to accounts, and challenges of documentation, cost, distance, insufficient funds and lack of trust. It examined the outcomes for adults in the poorer 40th percentile of households compared with the richer 60th percentile. Patterns of inclusion/exclusion were identified using descriptive statistics, income group comparisons, trend analysis and correlation analysis. The results show that over the period 2011-17, the number of adults with financial accounts rose significantly, even for low-income adults. But there were still significant disparities in the use of digital payments and in access to accounts via mobile and the internet. The lowest 40% remained behind the rest of the population, even with respect to the use of digital financial services. Other factors impacting financial inclusion were also related to lower levels of financial inclusion, such as documentation requirements, service costs, geographical distance, lack of funds, and trust concerns. Participation in accounts seemed to be promoted by government transfers, but this did not remove the structural and administrative problems. The research findings indicate that increasing digital infrastructure and account ownership are not enough to deliver inclusive welfare.