Indian Journal of Finance

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The Role of Digital Financial Services on Indian MSMEs


Affiliations
1 Research Scholar, Amity University, Amity Road, Sector 125, Noida - 201 301, Uttar Pradesh., India
2 Professor, Amity University, Amity Road, Sector 125,Noida -201301, Uttar Pradesh., India

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Purpose : This paper aimed to examine the role of digital financial services on registered micro, small, and medium enterprises in India. This study examined the MSME knowledge, usage, and preferences about several digital financial technologies. Further, the paper discussed the impact of demographic variables on DFS adoption. Methodology : Primary data were gathered for the study. The questionnaire had three parts. The first part covered demographic variables. The second part identified questions related to DFS awareness and the reason for adopting DFS. The last part covered DFS adoption in various financial activities. Findings : DFS awareness in the MSME sector was high but far from the required level. Demonetization and COVID-19 also increased the awareness of DFS in the Indian MSME sector. The DFS adoption was found to be affected by the age and experience of the owner/manager. Also, the educational level of the owner/manager did not always impact the DFS adoption. Practical Implications : Digital financial service providers should increase customer satisfaction and reduce administrative expenses by making their website or application user-friendly to attract MSMEs. Additional government support is essential to enhance DFS awareness among MSMEs. Originality/Value : This study added to the limited existing literature on MSMEs and their knowledge of digital payments.

Keywords

Digital Financial Services, Indian MSMEs, Demographic Variables, Mobile Payments

JELClassification Codes : G2, G5, G40, G53, L29, O33

June 14, 2022 ; Paper sent back for Revision : January 22, 2023 ; Paper Acceptance Date : January 30, 2023 ; Paper Published Online : February 15, 2023

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  • The Role of Digital Financial Services on Indian MSMEs

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Authors

Upasana Gupta
Research Scholar, Amity University, Amity Road, Sector 125, Noida - 201 301, Uttar Pradesh., India
Bhawna Agarwal
Professor, Amity University, Amity Road, Sector 125,Noida -201301, Uttar Pradesh., India

Abstract


Purpose : This paper aimed to examine the role of digital financial services on registered micro, small, and medium enterprises in India. This study examined the MSME knowledge, usage, and preferences about several digital financial technologies. Further, the paper discussed the impact of demographic variables on DFS adoption. Methodology : Primary data were gathered for the study. The questionnaire had three parts. The first part covered demographic variables. The second part identified questions related to DFS awareness and the reason for adopting DFS. The last part covered DFS adoption in various financial activities. Findings : DFS awareness in the MSME sector was high but far from the required level. Demonetization and COVID-19 also increased the awareness of DFS in the Indian MSME sector. The DFS adoption was found to be affected by the age and experience of the owner/manager. Also, the educational level of the owner/manager did not always impact the DFS adoption. Practical Implications : Digital financial service providers should increase customer satisfaction and reduce administrative expenses by making their website or application user-friendly to attract MSMEs. Additional government support is essential to enhance DFS awareness among MSMEs. Originality/Value : This study added to the limited existing literature on MSMEs and their knowledge of digital payments.

Keywords


Digital Financial Services, Indian MSMEs, Demographic Variables, Mobile Payments

JELClassification Codes : G2, G5, G40, G53, L29, O33

June 14, 2022 ; Paper sent back for Revision : January 22, 2023 ; Paper Acceptance Date : January 30, 2023 ; Paper Published Online : February 15, 2023


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DOI: https://doi.org/10.17010/ijf%2F2023%2Fv17i2%2F170125