An Empirical Investigation on the Relationship Between Digital Finance Adoption and Financial Inclusion of Micro Businesses in India

The present study explores the factors affecting digital finance adoption in micro units towards deepening of financial inclusion in the Indian context. This study combines perceived usefulness, perceived ease of use, behavioural intention, adoption, and actual usage from TAM3 with perceived risk and trust from Prospect Theory. Further, the study also investigates the moderating role of peer influence and government support in improving digital finance adoption amongst micro units. A structured questionnaire has been used for collecting the quantitative data from two cities of India, viz. Mumbai and Ahmedabad. The proposed model has been analysed statistically using PLS-SEM. The study empirically demonstrated that perceived usefulness; perceived ease of use, and perceived risk have a significant bearing on behavioural intention to adopt digital finance. It also validates the moderating role of peer influence and government support in digital finance adoption. The study findings demonstrate empirically that digital finance has a positive impact on the financial inclusion of micro units in India. This study focuses exclusively on micro units in India, and this depicts its novelty.