Financial Exclusion in the Digital Age: The Role of Trust, Literacy, and Geography in Rajasthan’s Tribal Heartland

Abstract

In the past decade, remarkable progress has been made in financial inclusion in India owing to the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the burgeoning digital payments landscape. As with increased participation in school, however, increased financial accounts does not necessarily mean that they are used at all times. Formal systems have little effect in many instances, as traditional trust-based savings and credit systems continue in place in a state with a large tribal population and a wide variety of landforms from hills and desert to forest fringes.

This paper looks at the difference in awareness, access, and utilisation of formal financial services for tribal people in Rajasthan and the national tribal and rural averages. The study utilizes a mixed methods design, consisting of a structured comparative survey and focus group discussions, to explore the hypotheses that relate to traditional trust, digital literacy and geographic isolation.

The results have shown that there is high awareness of government schemes, but low access to, and use of such schemes, especially in geographically remote areas. The paper argues that although financial inclusion policy has succeeded in enrolment, the policy has been very weak in creating behavioural change and trust in the financial system for long-term use among the tribal community of Rajasthan.