IMPACT OF COVID-19 PANDEMIC ON FINTECH AND FINANCIAL INCLUSION IN INDIA
Keywords:
Covid-19, FinTech, Digital Payment, Financial Inclusion, Financial Literacy.
Abstract
The study seeks to investigate how the pandemic of Covid-19 has impacted customer engagement in using Fintech services and resultantly the status of financial inclusion in India. This study is empirical and analytical in nature. Digital payment is taken as a proxy of FinTech. The data is collected from primary and secondary sources. To understand what persuades a customer to use FinTech services, the response to a survey questionnaire has been obtained from 310 respondents through e-mail and hand collection. Factor analysis is used to investigate the factors that impacted customer engagement in digital payment, before and after the Covid-19 pandemic. The factors used in this model are access, usage, technology, and financial literacy. Results show that there is a significant positive relationship between all the factors and the use of FinTech services. There is a significant positive relationship between FinTech and financial inclusion, as already established by the previous studies. The findings of this review are pivotal as they can serve as useful input for the ongoing debate directed towards increased use of FinTech in achieving greater financial inclusion. The findings suggest that by advancing the technology and increasing financial literacy, access, and use of FinTech services can be increased which in turn will increase financial inclusion in developing countries.
JEL Classification Codes: F65, O32, Q55, H80, M10.
References
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Alwi, S. (2021). Fintech as financial inclusion: Factors affecting behavioral intention to accept mobile e-wallet during Covid-19 outbreak. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(7), 2130-2141. https://doi.org/10.17762/turcomat.v12i7.3356
Ahmad, N. W., BAHARI, N. F., & RIPAIN, N. (2021, April). Covid-19 Outbreak: The Influence on Digital Finance and Financial Inclusion. In International Conference On Syariah & Law 2021 (pp. 160-66). International Conference On Syariah & Law 2021(ICONSYAL 2021)-Online Conference
Chan, L. L., & Idris, N. (2017). Validity and reliability of the instrument using exploratory factor analysis and Cronbach’s alpha. International Journal of Academic Research in Business and Social Sciences, 7(10), 400-410. http://dx.doi.org/10.6007/IJARBSS/v7-i10/3387
Chowdhury, M. S. A., Islam, M. S., Haque, M. S., Chowdhury, M. S. R., & Hossain, M. E. (2022). Customer trust in E-Banking during Covid-19 Pandemic in Bangladesh. Indian Journal of Finance and Banking, 10(1), 45-53.; https://doi.org/10.46281/ijfb.v10i1.1772
Daragmeh, A., Lentner, C., & Sági, J. (2021). FinTech payments in the era of COVID-19: Factors influencing behavioral intentions of “Generation X” in Hungary to use mobile payment. Journal of Behavioral and Experimental Finance, 32, 100574. https://doi.org/10.1016/j.jbef.2021.100574
Dorfleitner, G., Hornuf, L., Schmitt, M., & Weber, M. (2017). The fintech market in Germany. In FinTech in Germany (pp. 13-46). Springer, Cham. https://doi.org/10.1007/978-3-319-54666-7_4
Duvendack, M., & Mader, P. (2019). Impact of financial inclusion in low‐and middle‐income countries: A systematic review of reviews. Campbell Systematic Reviews, 15(1-2). https://doi.org/10.4073/csr.2019.2
Durai, T., & Stella, G. (2019). Digital finance and its impact on financial inclusion. Journal of Emerging Technologies and Innovative Research, 6(1), 122-127. Retrieved from https://www.jetir.org/view?paper=JETIRV006018
Ernst & Young. (2019). (Innovation in Financial Inclusion, Revenue growth through innovative inclusion and the winds of change- Trends shaping India’s FinTech sector, 2021). Retrieved from https://www.ey.com/en_in/consulting/the-winds-of-change-trends-shaping-india-s-fintech-sector
Huterska, A., Piotrowska, A. I., & Szalacha-Jarmużek, J. (2021). Fear of the covid-19 pandemic and social distancing as factors determining the change in consumer payment behavior at retail and service outlets. Energies, 14(14), 4191. https://doi.org/10.3390/en14144191
Hassan, S., Ismail, N., Jaafar, W. Y., Ghazali, K., Budin, K., Gabda, D., & Samad, A. S. (2012). Using factor analysis on survey study of factors affecting students’ learning styles. International Journal of Applied Mathematics and Informatics, 1(6), 33-40. Retrieved from https://www.researchgate.net/publication/257066716
Joshi, M., & Rajpurohit, V. (2016). Pradhan Mantri Jan Dhan Yojana (The Financial Inclusion): A study of Awareness. Available at SSRN 2816493.
Kasradze, T. (2020). Challenges Facing Financial Inclusion Due to the COVID-19 Pandemic. European Journal of Marketing and Economics, 3(2), 50-63. https://doi.org/10.26417/523jma34n
Latta, A., & Sarkar, D. (2021). Imperative Role of Digitalization in the Indian Economy During COVID-19. International Journal of Advanced Research in Science, Communication and Technology, 2(3), 164-178. https://doi.org/10.48175/IJARSCT-V2-I3-329
Mehrotra, A. (2019). April. Financial Inclusion Through FinTech–A Case of Lost Focus. In 2019 International Conference on Automation, Computational and Technology Management (ICACTM) (pp. 103-107). IEEE. https://doi.org/10.1109/ICACTM.2019.8776857
Mogaji, E. (2020). Financial vulnerability during a pandemic: insights for coronavirus disease (COVID- 19). Mogaji, E, 57-63. http://dx.doi.org/10.2139/ssrn.3564702
Morgan, P., & Pontines, V. (2014). Financial stability and financial inclusion. ADBI Working Paper 488. Tokyo: Asian Development Bank Institute. http://dx.doi.org/10.2139/ssrn.2464018
Nair, D., Veeragandham, M., Pamnani, P., Prasad, S., & Guruprasad, M. (2021). Impact of COVID-19 On Fintech Industry. International Journal of Research in Engineering, Science and Management, 4(2), 27-34. https://doi.org/10.47607/ijresm.2021.496
Naumenkova, S., Mishchenko, S., & Dorofeiev, D. (2019). Digital financial inclusion: Evidence from Ukraine. Investment Management & Financial Innovations, 16(3), 194-205.http://dx.doi.org/10.21511/imfi.16(3).2019.18
Nurfadilah, D., & Samidi, S. (2021). HOW THE COVID-19 CRISIS IS AFFECTING CUSTOMERS’ INTENTION TO USE ISLAMIC FINTECH SERVICES: EVIDENCE FROM INDONESIA. Journal of Islamic Monetary Economics and Finance, 7, 83 - 114. https://doi.org/10.21098/jimf.v7i0.1318
Ozili, P. K., & Arun, T. (2020). Spillover of COVID-19: impact on the Global Economy. Available at SSRN Electronic Journal 3562570. http://dx.doi.org/10.2139/ssrn.3562570
Purba, J., Samuel, S., & Budiono, S. (2021). Collaboration of digital payment usage decision in COVID-19 pandemic situation: Evidence from Indonesia. International Journal of Data and Network Science, 5(4), 557- 568. http://dx.doi.org/10.5267/j.ijdns.2021.8.012
Puthusserry, P., Khan, Z., Nair, S. R., & King, T. (2021). Mitigating psychic distance and enhancing internationalization of fintech SMEs from emerging markets: the role of board of directors. British Journal of Management, 32(4), 1097-1120. http://dx.doi.org/10.1111/1467-8551.12502
Popescu, A. D. (2019). Empowering Financial Inclusion through FinTech. Social Sciences and Education Research Review, 6(2), 198-215. Retrieved from https://sserr.ro/wp-content/uploads/2019/11/SSERR_2019_6_2_198_215.pdf
Rabbani, M. R., & Khan, S. (2020). FinTech, Blockchain and Islamic Finance: An Extensive Literature Review. European Research Studies, 23(1), 348-368. http://dx.doi.org/10.35808/ijeba/444
RBI Report (2022). Retrieved from https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=607
Sharma, R., Mishra, S., & Rai, S. (2021). Empowering women self-help groups through microfinance during covid-19: A case study of women SHG. Indian Journal of Finance and Banking, 5(1), 56-72. https://doi.org/10.46281/ijfb.v5i1.971
Sheng, J., Amankwah‐Amoah, J., Khan, Z., & Wang, X. (2021). COVID‐19 pandemic in the new era of big data analytics: Methodological innovations and future research directions. British Journal of Management, 32(4), 1164-1183.; https://doi.org/10.1111/1467-8551.12441
Suryono, R. R., Budi, I., & Purwandari, B. (2020). Challenges and trends of financial technology (Fintech): a systematic literature review. Information, MDPI, 11(12), 590. https://doi.org/10.3390/info11120590
Senyo, P. K., & Karanasios, S. (2020). How do fintech firms address financial inclusion? Association for Information Systems, Conference: International Conference on Information Systems. Business & Social Sciences Journal, 3(1), 12-20. Retrieved from https://hdl.handle.net/10520/EJC-105861a0dd
Statista. (2020). Retrieved from https://www.statista.com/statistics/942795/india-financial-institution-account-ownership-rate/
Sustainable Development Goals. (2030). Retrieved from https://www.uncdf.org/financial-inclusion-and-the-sdgs
Tonuchi, J. E. (2020). How to improve mobile money service usage and adoption by nigerians in the era of covid-19. International Journal of Finance, Insurance and Risk Management, 10(3), 31-52. https://doi.org/10.35808/ijfirm/220
Tripalupi, R. I., & Anggahegari, P. (2020). The Impact of Covid-19 Pandemic: Challenges and Opportunities of Syariah Financial Technology. International Journal of Nusantara Islam, 8(1), 119-128. https://doi.org/10.15575/ijni.v8i1.10207
Truby, J. (2020). Governing artificial intelligence to benefit the UN sustainable development goals. Sustainable Development, 28(4), 946-959. https:// doi.org/10.1002/sd.2048
Tam, L. T., & Hanh, L. N. (2018). Fintech for promoting financial inclusion in Vietnam: Fact findings and policy implications. Business & Social Sciences Journal, 3(1), 12-20. Retrieved from https://hdl.handle.net/10520/EJC-105861a0dd
Tut, D. (2020). FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems. MPRA, Available at SSRN 3660987. https:// doi.org/10.2139/ssrn.3660987
Vasenska, I., Dimitrov, P., Koyundzhiyska-Davidkova, B., Krastev, V., Durana, P., & Poulaki, I. (2021). Financial Transactions Using FINTECH during the Covid-19 Crisis in Bulgaria. Risks, 9(3), 1-28. https://doi.org/10.3390/risks9030048
Vasiljeva, T., & Lukanova, K. (2016). Commercial banks and FinTech companies in the digital transformation: Challenges for the future. Journal of Business Management, 11(11), 25-33. Retrieved from https://www.riseba.lv/sites/default/files/inline-files/jbm_09.02_2016_11_2.pdf#page=25
Wonglimpiyarat, J. (2019). Analysis of FinTech in the banking industry. International Journal of Business Innovation and Research, 19(1), 125-138. https://doi.org/10.1504/IJBIR.2019.099752
World Bank Report. (2020). Retrieved from https://www.worldbank.org/en/topic/financialinclusion
Al Nawayseh, M. K. (2020). Fintech in COVID-19 and beyond: what factors are affecting customers’ choice of fintech applications?. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 153. https://doi.org/10.3390/joitmc6040153
Alwi, S. (2021). Fintech as financial inclusion: Factors affecting behavioral intention to accept mobile e-wallet during Covid-19 outbreak. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(7), 2130-2141. https://doi.org/10.17762/turcomat.v12i7.3356
Ahmad, N. W., BAHARI, N. F., & RIPAIN, N. (2021, April). Covid-19 Outbreak: The Influence on Digital Finance and Financial Inclusion. In International Conference On Syariah & Law 2021 (pp. 160-66). International Conference On Syariah & Law 2021(ICONSYAL 2021)-Online Conference
Chan, L. L., & Idris, N. (2017). Validity and reliability of the instrument using exploratory factor analysis and Cronbach’s alpha. International Journal of Academic Research in Business and Social Sciences, 7(10), 400-410. http://dx.doi.org/10.6007/IJARBSS/v7-i10/3387
Chowdhury, M. S. A., Islam, M. S., Haque, M. S., Chowdhury, M. S. R., & Hossain, M. E. (2022). Customer trust in E-Banking during Covid-19 Pandemic in Bangladesh. Indian Journal of Finance and Banking, 10(1), 45-53.; https://doi.org/10.46281/ijfb.v10i1.1772
Daragmeh, A., Lentner, C., & Sági, J. (2021). FinTech payments in the era of COVID-19: Factors influencing behavioral intentions of “Generation X” in Hungary to use mobile payment. Journal of Behavioral and Experimental Finance, 32, 100574. https://doi.org/10.1016/j.jbef.2021.100574
Dorfleitner, G., Hornuf, L., Schmitt, M., & Weber, M. (2017). The fintech market in Germany. In FinTech in Germany (pp. 13-46). Springer, Cham. https://doi.org/10.1007/978-3-319-54666-7_4
Duvendack, M., & Mader, P. (2019). Impact of financial inclusion in low‐and middle‐income countries: A systematic review of reviews. Campbell Systematic Reviews, 15(1-2). https://doi.org/10.4073/csr.2019.2
Durai, T., & Stella, G. (2019). Digital finance and its impact on financial inclusion. Journal of Emerging Technologies and Innovative Research, 6(1), 122-127. Retrieved from https://www.jetir.org/view?paper=JETIRV006018
Ernst & Young. (2019). (Innovation in Financial Inclusion, Revenue growth through innovative inclusion and the winds of change- Trends shaping India’s FinTech sector, 2021). Retrieved from https://www.ey.com/en_in/consulting/the-winds-of-change-trends-shaping-india-s-fintech-sector
Huterska, A., Piotrowska, A. I., & Szalacha-Jarmużek, J. (2021). Fear of the covid-19 pandemic and social distancing as factors determining the change in consumer payment behavior at retail and service outlets. Energies, 14(14), 4191. https://doi.org/10.3390/en14144191
Hassan, S., Ismail, N., Jaafar, W. Y., Ghazali, K., Budin, K., Gabda, D., & Samad, A. S. (2012). Using factor analysis on survey study of factors affecting students’ learning styles. International Journal of Applied Mathematics and Informatics, 1(6), 33-40. Retrieved from https://www.researchgate.net/publication/257066716
Joshi, M., & Rajpurohit, V. (2016). Pradhan Mantri Jan Dhan Yojana (The Financial Inclusion): A study of Awareness. Available at SSRN 2816493.
Kasradze, T. (2020). Challenges Facing Financial Inclusion Due to the COVID-19 Pandemic. European Journal of Marketing and Economics, 3(2), 50-63. https://doi.org/10.26417/523jma34n
Latta, A., & Sarkar, D. (2021). Imperative Role of Digitalization in the Indian Economy During COVID-19. International Journal of Advanced Research in Science, Communication and Technology, 2(3), 164-178. https://doi.org/10.48175/IJARSCT-V2-I3-329
Mehrotra, A. (2019). April. Financial Inclusion Through FinTech–A Case of Lost Focus. In 2019 International Conference on Automation, Computational and Technology Management (ICACTM) (pp. 103-107). IEEE. https://doi.org/10.1109/ICACTM.2019.8776857
Mogaji, E. (2020). Financial vulnerability during a pandemic: insights for coronavirus disease (COVID- 19). Mogaji, E, 57-63. http://dx.doi.org/10.2139/ssrn.3564702
Morgan, P., & Pontines, V. (2014). Financial stability and financial inclusion. ADBI Working Paper 488. Tokyo: Asian Development Bank Institute. http://dx.doi.org/10.2139/ssrn.2464018
Nair, D., Veeragandham, M., Pamnani, P., Prasad, S., & Guruprasad, M. (2021). Impact of COVID-19 On Fintech Industry. International Journal of Research in Engineering, Science and Management, 4(2), 27-34. https://doi.org/10.47607/ijresm.2021.496
Naumenkova, S., Mishchenko, S., & Dorofeiev, D. (2019). Digital financial inclusion: Evidence from Ukraine. Investment Management & Financial Innovations, 16(3), 194-205.http://dx.doi.org/10.21511/imfi.16(3).2019.18
Nurfadilah, D., & Samidi, S. (2021). HOW THE COVID-19 CRISIS IS AFFECTING CUSTOMERS’ INTENTION TO USE ISLAMIC FINTECH SERVICES: EVIDENCE FROM INDONESIA. Journal of Islamic Monetary Economics and Finance, 7, 83 - 114. https://doi.org/10.21098/jimf.v7i0.1318
Ozili, P. K., & Arun, T. (2020). Spillover of COVID-19: impact on the Global Economy. Available at SSRN Electronic Journal 3562570. http://dx.doi.org/10.2139/ssrn.3562570
Purba, J., Samuel, S., & Budiono, S. (2021). Collaboration of digital payment usage decision in COVID-19 pandemic situation: Evidence from Indonesia. International Journal of Data and Network Science, 5(4), 557- 568. http://dx.doi.org/10.5267/j.ijdns.2021.8.012
Puthusserry, P., Khan, Z., Nair, S. R., & King, T. (2021). Mitigating psychic distance and enhancing internationalization of fintech SMEs from emerging markets: the role of board of directors. British Journal of Management, 32(4), 1097-1120. http://dx.doi.org/10.1111/1467-8551.12502
Popescu, A. D. (2019). Empowering Financial Inclusion through FinTech. Social Sciences and Education Research Review, 6(2), 198-215. Retrieved from https://sserr.ro/wp-content/uploads/2019/11/SSERR_2019_6_2_198_215.pdf
Rabbani, M. R., & Khan, S. (2020). FinTech, Blockchain and Islamic Finance: An Extensive Literature Review. European Research Studies, 23(1), 348-368. http://dx.doi.org/10.35808/ijeba/444
RBI Report (2022). Retrieved from https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=607
Sharma, R., Mishra, S., & Rai, S. (2021). Empowering women self-help groups through microfinance during covid-19: A case study of women SHG. Indian Journal of Finance and Banking, 5(1), 56-72. https://doi.org/10.46281/ijfb.v5i1.971
Sheng, J., Amankwah‐Amoah, J., Khan, Z., & Wang, X. (2021). COVID‐19 pandemic in the new era of big data analytics: Methodological innovations and future research directions. British Journal of Management, 32(4), 1164-1183.; https://doi.org/10.1111/1467-8551.12441
Suryono, R. R., Budi, I., & Purwandari, B. (2020). Challenges and trends of financial technology (Fintech): a systematic literature review. Information, MDPI, 11(12), 590. https://doi.org/10.3390/info11120590
Senyo, P. K., & Karanasios, S. (2020). How do fintech firms address financial inclusion? Association for Information Systems, Conference: International Conference on Information Systems. Business & Social Sciences Journal, 3(1), 12-20. Retrieved from https://hdl.handle.net/10520/EJC-105861a0dd
Statista. (2020). Retrieved from https://www.statista.com/statistics/942795/india-financial-institution-account-ownership-rate/
Sustainable Development Goals. (2030). Retrieved from https://www.uncdf.org/financial-inclusion-and-the-sdgs
Tonuchi, J. E. (2020). How to improve mobile money service usage and adoption by nigerians in the era of covid-19. International Journal of Finance, Insurance and Risk Management, 10(3), 31-52. https://doi.org/10.35808/ijfirm/220
Tripalupi, R. I., & Anggahegari, P. (2020). The Impact of Covid-19 Pandemic: Challenges and Opportunities of Syariah Financial Technology. International Journal of Nusantara Islam, 8(1), 119-128. https://doi.org/10.15575/ijni.v8i1.10207
Truby, J. (2020). Governing artificial intelligence to benefit the UN sustainable development goals. Sustainable Development, 28(4), 946-959. https:// doi.org/10.1002/sd.2048
Tam, L. T., & Hanh, L. N. (2018). Fintech for promoting financial inclusion in Vietnam: Fact findings and policy implications. Business & Social Sciences Journal, 3(1), 12-20. Retrieved from https://hdl.handle.net/10520/EJC-105861a0dd
Tut, D. (2020). FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems. MPRA, Available at SSRN 3660987. https:// doi.org/10.2139/ssrn.3660987
Vasenska, I., Dimitrov, P., Koyundzhiyska-Davidkova, B., Krastev, V., Durana, P., & Poulaki, I. (2021). Financial Transactions Using FINTECH during the Covid-19 Crisis in Bulgaria. Risks, 9(3), 1-28. https://doi.org/10.3390/risks9030048
Vasiljeva, T., & Lukanova, K. (2016). Commercial banks and FinTech companies in the digital transformation: Challenges for the future. Journal of Business Management, 11(11), 25-33. Retrieved from https://www.riseba.lv/sites/default/files/inline-files/jbm_09.02_2016_11_2.pdf#page=25
Wonglimpiyarat, J. (2019). Analysis of FinTech in the banking industry. International Journal of Business Innovation and Research, 19(1), 125-138. https://doi.org/10.1504/IJBIR.2019.099752
World Bank Report. (2020). Retrieved from https://www.worldbank.org/en/topic/financialinclusion
Published
2022-11-02
How to Cite
Gupta, M., & Verma, S. (2022). IMPACT OF COVID-19 PANDEMIC ON FINTECH AND FINANCIAL INCLUSION IN INDIA. Indian Journal of Finance and Banking, 11(1), 1-14. https://doi.org/10.46281/ijfb.v11i1.1815
Section
Regular Research Article/ Short Communication Article
Copyright (c) 2022 Megha Gupta, Suhasini Verma
This work is licensed under a Creative Commons Attribution 4.0 International License.
