PROJECT REPORT ON

“DIGITAL FINANCE- A ROAD TO CASHLESS ECONOMY”

SUBMITTED IN PARTIAL FULFILLMENT OF

THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

(2015-2018)

SUBMITTED TO: - SUBMITTED BY:-

PANJAB UNIVERSITY NIDHI VERMA

CHANDIGARH 15044010

BBA III

GOVERNMENT COLLEGE FOR GIRLS, LUDHIANA

1
 DECLARATION

I hereby declare that project work entitled “Digital Finance- A road to

cashless economy” submitted to the Panjab University Chandigarh, is a
record of an original work done by me under the guidance of Ms. Ravneet
Kaur, Assistant Professor, GOVERNMENT COLLEGE FOR GIRLS,
LUDHIANA and this project work is submitted in the partial fulfillment of
the requirements for the award of degree of Bachelor of Business
Administration. The results embodied in this research project have not been
submitted to any other University or Institute for the award of any degree or
diploma.

DATE: - 28 April, 2018 NAME: - NIDHI VERMA

PLACE: - LUDHIANA ROLL NO: - 15044010

2
 CERTIFICATE OF APPROVAL

I hereby certify project work entitled “DIGITAL FINANCE” submitted by

NIDHI VERMA for the partial fulfillment of BBA Degree offered by the
PANJAB UNIVERSITY during the academic year 2015-2018 is a original
work carried out by the student under my supervision and this work has not
formed the basis for any reward of any degree, diploma or any other such
title.

DATE-:28 April, 2018 SIGNATURE OF SUPERVISOR

3
 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible
without the kind support of many individuals. I would like to extend my
sincere thanks to all of them.

I am highly indebted to my principal Mrs. Savita Rani Sharma and faculty

members for their guidance and constant supervision as well as for providing
necessary information regarding the project and also for their support in
completing the project.

I would like to express my gratitude towards my parents and member of

Government College for Girls, Ludhiana for their kind co-operation and
encouragement which helped me in the completion of this project.

I would like express my special gratitude and thanks to persons for giving me
such attention and time. My thanks and appreciations also go to my
colleagues in developing the project and people who have willingly helped
out with their abilities.

NIDHI VERMA
15044010
BBA III

4
 TABLE OF CONTENTS

TABLE OF CONTENT PAGE NO.

DECLARATION 2

CERTIFICATE OF APPROVAL 3

ACKNOWLEDGEMENT 4

EXECUTIVE SUMMARY 6-7

CHAPTER-1 INTRODUCTION 8-20

CHAPTER-2 REVIEW OF LITERATURE 21-25

CHAPTER-3 OBJECTIVES 26-27

CHAPTER-4 RESEARCH METHODOLOGY 28-31

CHAPTER-5 ANALYSIS AND

32-50
INTERPRETATION

CHAPTER-6 FINDINGS AND CONCLUSION 51-54

CHAPTER-7 SUGGESTIONS 55-57

CHAPTER-8 LIMITATIONS 58-59

CHAPTER-9 CONCLUSION 60-61

REFERENCES 62-64

ANNEXURE 65-69

5
 EXECUTIVE SUMMARY

Most people and small businesses in emerging economies today transact

exclusively in cash, have no safe way to save or invest money. As a result, a
significant amount of wealth is stored outside the financial system and credit
becomes scarce and expensive. So, economic growth suffers.

Digital Finance offers a transformational solutions and one that could be

implemented easily without the need of major investment. Using digital channels
rather than brick-and-mortar branches dramatically reduces costs for providers
and increases convenience for users, opening access to finance for people at all
income levels and in rural areas. For businesses, financial service providers, and
governments, digital payments and digital financial services can erase huge
inefficiencies and unlock significant productivity gains. Also through digital
finance, 1.6 billion unbanked people could gain access to formal financial
services; of this total, more than half would be women.

Capturing this opportunity will require concerted effort by business and

government leaders. Rather than waiting a generation for incomes to rise and
traditional banks to extend their reach, emerging economies have an opportunity
to use mobile technologies to provide digital financial services for all, rapidly
unlocking economic opportunity and accelerating social development.

In the survey we found that almost 100% of the selected population is aware
about digital payments but many of them prefer cash as the most convenient mode
of payment because they feel that it is safe. So it becomes important to make the
consumers aware about the digital financial transactions and also some stringent
actions must be taken to resolve the problems regarding digital payments.

6
Some of the suggestions can be followed to make it more happening –

 Track fraud better and explore cooperative approaches to tackle it.

 Develop more user-friendly front-end interfaces.
 Make complaints handling faster, more timely, and free.
 Bring awareness about digital finance among people.
 Guidance on the consumer protection issues.

7
 CHAPTER-1

INTRODUCTION

8
 INTRODUCTION

Financial services are the lifeblood of an economy, enabling households and

businesses to save, invest, and protect themselves against risk. Yet in many
emerging economies today, the majority of individuals and small businesses
lack access to basic savings and credit products, which hinders economic
growth and perpetuates poverty. Two billion people in the developing world
lack access to a bank and 200 million small businesses cannot get the credit
they need to grow.

The solution can be summed up in two words: DIGITAL FINANCE, the idea
that individuals and companies can have access to payments, savings, and
credit products without ever stepping into a bank branch. This is possible
through digitization, which can essentially turn a Smartphone into a wallet , a
checkbook, a bank branch, and an accounting ledger, all in one.

Financial inclusion could help boost economies, especially in parts of the

world that need it most. The ubiquity of the mobile phone, even in remote
areas in emerging markets, makes it possible to bring financial services to
people who have never even considered opening a bank account. Already,
mobile networks reach nearly 90% of people in emerging economies.

Digital dramatically lowers the cost of providing financial services. Digital

accounts can be 90% cheaper than conventional ones for banks. This makes it
profitable to provide accounts for lower-income people. The long-held goal of
financial inclusion — for individuals and for micro and small businesses —
can now become a reality.

9
According to the research, it shows that digital finance could enable 1.6
billion people in developing countries to access financial accounts, loans, and
other financial necessities (and lower the cost and increase the convenience
for the 2.4 billion who already have bank accounts). Many new customers
would be among the poorest i.e. 40% of people in the world; more than half
would be women. The balances that these new customers accumulate can then
be loaned out, providing up to $2.1 trillion in new loans for individuals and
micro, small and mid-sized businesses.

There are several building blocks that need to be in place for digital finance to
take off. One is the right infrastructure, which includes widespread phone
ownership and network coverage at an affordable price; a robust digital
payments system; and widely used ID systems preferably with digital
authentication. Businesses of all sizes stand to gain in big ways. Businesses
could save 25 billion hours of labor by switching from cash to digital
payments. Some 90% of transactions in the developing world are in cash, but
having to protect piles of currency deters owners from expanding, since they
cannot be in two places at once. Firms that accept or pay with mobile
payments gain ready access to sales records, allowing for better inventory
management. In addition, digital payments create a data trail that enables
lenders to assess the creditworthiness of even micro-enterprises.

Financial service providers have a big opportunity as well. They could cut
costs by up to $400 billion annually by evolving from bricks and mortar to
digital strategies. And because they can expand their customer base at
relatively low cost, they could collect more than $4 trillion in new deposits —
money that can be converted into loans. Savings that are currently stored

10
under mattresses can be put to work, adding more activity and liquidity to the
economy.

Governments benefit, too. Digital payments could improve their finances by

reducing opportunities for corruption, targeting spending more precisely, and
improving tax collection. Many government services, such as education and
healthcare, stand to gain. Parents and students no longer had to worry about
being robbed—and more money made it into school budgets. Mobile money
providers got new transactions, plus fees from the government. The education
ministry saved money and gathered more and better student information.

Over the longer term, digital payments can enable development of e-

commerce and on-demand services. Today, most e-commerce in emerging
economies relies on cash payment on delivery. But digital payments can
unleash more rapid growth, given their greater convenience. In turn, e -
commerce can unlock consumer spending, particularly in areas where retail
options are limited. On-demand services can enable individuals to tap directly
into the labor market to find out where their services are most valued:
services including everything from driving taxis to day labor to specialized
work in technology. As the global digital economy grows rapidly, digital
payments provide a more convenient, low cost way for individuals and
businesses to take advantage of new opportunities. The spur to innovation that
digital finance can give is one argument among many for adopting it, and its
rapid adoption. Examples are mounting of the countries that have benefited
from harnessing digital finance. As a developmental tool, it seems
indispensable, a means to securing many ends from reducing poverty and
hunger, to improving health, creating good jobs and inclusive economic
growth, and reducing inequalities. Digital finance is not a miracle cure for all

11
the world’s ills, but it is within reach, and available now to emerging
economies willing and ready to seize its many benefits.

MEANING OF DIGITAL FINANCE

Digital Finance is defined as financial services delivered over digital

infrastructure—including mobile and internet—with low use of cash and
traditional bank branches. Mobile phones, computers, or cards used over point-of-
sale (POS) devices connect individuals and businesses to a digitized national
payments infrastructure, enabling seamless transactions across all parties.

It further includes:

 All types of financial services, such as payments, savings accounts, credit,

insurance, and other financial products.
 All types of users, including individuals at all income levels, businesses of
all sizes, and government entities at all levels.
 All types of providers of financial services, including banks, payment
providers, other financial institutions, telecom companies, financial
technology start-ups, retailers, and other businesses.

DIGITAL FINANCE IN EMERGING ECONOMIES

A well-functioning financial-services sector is critical to the economic

health of a country, allowing people to save for and insure against
expected and unexpected events, enabling entrepreneurs and businesses to
invest in new and productive businesses and to manage their supply

12
chains, and making it possible for individuals, businesses, governments,
and financial-services providers to conduct transactions efficiently.

However, individuals and businesses in emerging economies do not have

the same access to financial services enjoyed by their counterparts in
advanced economies. Two billion people, or 45 percent of the developing
world’s adult population, lack an account with a bank, other financial
institution, or mobile-money service. In addition, 200 million MSMEs, or
half of all such businesses in emerging economies, lack sufficient access
to the credit they need to thrive.

Financial institutions and governments also lose. Heavy use of cash—

93 percent of all transactions across emerging economies are conducted in
cash compared with 50 percent in developed economies—raises costs for
providers and deters them from serving millions of less wealthy
customers and smaller companies. For example, more than 99 percent of
transactions by volume in Ethiopia, India, Nigeria, and Pakistan are in
cash, with buyers using cash for everything from real estate transactions
to vehicle registration. Similarly 94 percent of all transactions in China
remain in cash. For governments, cash-based payment systems create a
leaky pipeline for expenditure and tax collection; in some cases, nearly
one-third of such payments can be lost to corruption.

The economic prospects of emerging economies would be far brighter if

more individuals, businesses, and even governments had access to modern
financial services. For now, billions of women and men and hundreds of
millions of businesses, small and large, are trapped in a cash economy.
But a rescuer is at hand: digital technology, in the shape of a mobile
phone. If digital’s power is harnessed in finance as it increasingly is in

13
other types of economic activity, this could prove transformative for
emerging economies. The technology exists and is now widespread. The
opportunity is waiting to be seized.

A significant share of people in emerging economies are simply not part

of the financial system, and an even larger number of adults do not use a
full suite of financial services such as investment products, lines of credit,
mortgage loans, and insurance. Limitations in financial access are
particularly acute among women, people living in rural areas, and those
who are less well off. However, even wealthier people in emerging
economies transact more in cash, save more in hard assets, and borrow
less from formal sources than do their counterparts in advanced
economies. Difficult access, limited product choice, and high prices and
other intangible costs such as travel time all are to blame. The resulting
financial exclusion imposes costs and means that opportunities are lost.

Emerging economies lack broad financial access. Only 5 percent of

individuals in advanced economies lack a formal financial account, but
across emerging economies the average is a striking 45 percent.

Women in emerging economies are 20 percent less likely to have a formal

account than men and have 23 percent less access to a broader set of
products including mobile banking and credit. In 34 of 91 countries,
women face high to extremely high gender inequality on financial
inclusion. South Asia, and the Middle East and Africa, fare particularly
poorly, with average female access just 64 percent that of men. Women in
five countries studied—Chad, Morocco, Niger, Pakistan, and Yemen—
have access that is less than 50 percent that of men.

14
Women face significant additional hurdles when seeking to access
financial services; they account for 55 percent of the world’s two billion
unbanked. One reason for this is that women often are harder for
financial-services providers to reach—on average they are less likely to
travel to nearby towns and have less access to digital technologies. At the
same time, many financial institutions have not developed as deep an
understanding of potential female customers, of whom they have less
experience servicing, and may overlook the significant pool of potential
customer’s women.

In the absence of adequate financial services, households rely on cash and

informal financial services that provide at best partial solutions for their
financial needs. Many save cash at home or buy physical assets such as
gold and livestock, or belong to informal savings groups, incurring risk
and forgoing the opportunity to earn interest and build a credit history.
Without access to formal credit, many must borrow from family and
friends or illegal lenders, often paying very high interest costs. Without a
secure and cost-effective way to save, households are limited in their
ability to invest in their future, smooth their income over the year, or
manage shocks such as illness or natural disasters.

While the poor are most likely to be financially unstable, the precarious
nature of their finances means that, on a relative basis, they often have the
most to gain from appropriate financial services. Poor people in emerging
economies are informally employed, with low and irregular income.
Social safety nets tend not to protect them well. One study tracking cash
flows of poor farming families in Mozambique, Pakistan, and Tanzania
shows that their income streams can be highly irregular, with high-income

15
months following harvest generating an average of six times the income
of low-income months.

In short, lack of access to financial services in emerging economies , is

one factor that keeps the poor in poverty, limiting their ability to invest in
their farms, businesses, and children. It also hinders the middle class from
raising their economic sights and their incomes. Economic growth at the
country level suffers as a result.

MSMEs IN EMERGING ECONOMIES

Financial exclusion affects business in emerging economies. MSMEs

around the world lack access to financial services, but the problem is
particularly acute in emerging economies. Today, 200 million MSMEs in
emerging economies, or half of all such businesses, lack access to a bank
account, and a similar number lack access to the credit that they need to
thrive.

Cash transactions impose significant complexity and costs on businesses

in emerging economies. They must maintain the right level of cash
inventory amid daily, weekly, monthly, and seasonal variations in revenue
and expenses. Cash must be kept secure from theft, including employee
theft, which places additional constraints on the ability of owner-run
businesses to expand beyond locations that can be managed by immediate
family. Managing in cash also hinders a business’s ability to build a
digital trail to demonstrate creditworthiness, which would help them
obtain loans to fund working capital or invest in expansion.

16
Economic development is usually a long journey, but digital finance
solutions can radically speed the progress, and at a relatively affordable
cost. Digitizing finance will be a multiyear effort for many countries but
the sooner they start, the faster the rewards will come, in the form of
higher growth, greater innovation, and more inclusion. The good news is
that the digital infrastructure needed already exists and is being further
improved. Billions of people across emerging economies possess the
mobile handset that can connect directly into the national payments
system. They are just waiting for governments and businesses to wire up
the infrastructure and create the products they need.

AWARENESS OF DIGITAL FINANCE OPTIONS IN INDIA

 DIGITAL FINANCE FOR RURAL INDIA: CREATING

AWARENESS AND ACCESS THROUGH COMMON SERVICE
CENTRES (CSCs)

Ministry of Electronics and IT has launched a new scheme UNDER

Digital Saksharta Abhiyan (DISHA) with objectives to enable the CSCs to
become Digital Financial Hubs, by hosting awareness sessions on
government policies and digital finance options available for rural
citizens.

 DIGITAL FINANCIAL LITERACY: KEY ENABLER FOR A

CASHLESS INDIA

DFL is having knowledge, acquired skills and developing necessary

habits to effectively use digital devices for financial transactions. Three
tenets of DFS- 1. Inform citizens about all policies, initiatives and digital

17
financial options for them. 2. Building awareness of digital payment
methods. 3. Imparting knowledge of safety and security of digital
payments.

 INDIA: MOVING A BILLION PEOPLE INTO DIGITAL FINANCE

To improve India’s digital future, the United States Agency for

International Development (USAID) identified ways to ensure the success
of Modi’s national mission for digital financial inclusion. It was a
partnership between the India’s Ministry of Finance and USAID to
increase the use of digital payments at the “point of sale”, especially
among low-income consumers.

 DIGITAL PAYMENT COMPAIGN AWARENESS PROGRAM (27

DEC 2016)
 To enroll and impart digital financial literacy to: – 25 lakh merchants
and – 1 Crore citizens – with the help of 2,00,000 Common Service
Centers (CSCs) – across all 2,50,000 panchayats.
 To enable citizens to access and use electronic payment system (EPS);
sensitizing and enabling merchants at Panchayats level to use EPS and
creating awareness in rural India.

 OTHER INCENTIVES TO PROMOTE DIGITAL FINANCE

 1 lakh Villages to be provided with 2 PoS machines.
 10% discounts at fuel purchase, highway tolls, rail tickets and
insurance premiums.
 Free accident insurance cover of up to Rs. 10 lakh for online rail
tickets

18
  No transaction fees for payments made through digital means by
Central Government Departments and PSUs.

DIGITAL FINANCE IN OTHER COUNTRIES

The vast majority of payments in emerging economies use cash, while

digital payments are widely used in advanced economies.

Percentage of total transactions (2016)

Share of digital payments-global aggregate

19
Share of digital payments- by country

20
 CHAPTER-2

REVIEW OF LITERATURE

21
 REVIEW OF LITERATURE

In this chapter an attempt has been made to present in brief a review of the
selected, which have direct or indirect relevance to the subject. It gives an
overview of the findings of the academic researchers who have followed the
path which study intends to trends. So it is necessary and important to review
the literature of the particulars field related topic.

Michael Rizzo (2014) discussed about digital finance- empowering the poor
via new technologies. Digital finance holds an enormous opportunity for
greater financial inclusion and expansion of various services. The challenge is
enormous, with 2.5 billion individuals and over 200 million small businesses
lacking access to basic financial services and credit.

Charan Singh, Akanksha Mittal and Ritesh Garg (2015) studied about the
digital financial inclusion. They found that as the majority of the rural population
is still not included in the inclusive growth. The concept of financial inclusion
becomes a challenge for the Indian economy. This aims to focus on utilizing the
existing resources such as Mobile phones and Banking Technologies thereby
making it more efficient and user friendly for the interest of the rural population.

Gurpreet Kaur (2015) studied about Financial Inclusion and Digital India
published in international journal of business management. This article
throws light on the relationship between financial inclusion and digital India.
Digital India is an initiative taken by Indian government services
electronically to all the citizens. It studies the effect of digital India initiative
on the concept of financial inclusion.

22
Yawe et al (2015) discussed about the financial inclusion and its relationship
with inequalities in income and opportunities. Mobile network operators have
initiated mobile money services, which have aided the financial services. So,
there is a competition between commercial banks and mobile network
operators. Therefore, there is a need for an institutional and regulatory
framework for mobile operators as well as central banks.

Aijaz A. Shaikh, Payam Hanafizadeh, Heikki Karjaluoto (November

2016) studied about Mobile Banking and Payment System- a conceptual
standpoint, published in the article- International Journal of e-Business
Research. This study conceptualizes and proposes a well-regulated and
designated mobile banking and payment system (MBPS) with the potential to
strengthen the banking system and foster the regulatory framework.

Daniela Gabor and Sally Heather Brooks (November 2016) discussed

about the digital revolution in financial inclusion. This article was published
in the New Political Economy. This examined the growing importance of
digital-based financial inclusion as a form of organizing development
interventions through networks of state institutions, international development
organizations, and philanthropic investment and Fintech companies.

Dean Karlan et al (September 2016) discussed about the research and impact of
Digital Financial Services. Research shows that financial services innovations can
have important positive impacts on wellbeing, but also that many do not. Also
they summarized how many people in the world are involved in digital
transactions and reasons behind them.

23
Francis Agyekum, Staurt Locke and Nirosha Hewa-Wellalage (2016)
studies about the financial inclusion and digital financial inclusion. The paper
examines the relationship between increasing accessibility to digital financial
services (DFS) and financial inclusion in lower income countries (LICs).
Mobile cellular penetration and internet usage are mutually inclusive means
through which digital financial services foster financial inclusion.

Tariq Abbasi (May 2016) in their study “the impact of digital financial
services on firm’s performance” examined that DFS continue to expand and
replace the delivery of traditional banking services to the customers through
innovative technologies to meet the growing complex needs and globalization
challenges. Such services help the organizations to improve their firm’s
performance and to remain competitive in market.

Gomber, Peter Koch, Michael (July 2017) concluded about Digital finance
and Fintech. Digital finance encompasses a magnitude of financial products,
financial businesses, finance-related software customer communication and
interaction delivered by Fintech Company and innovative financial service
providers.

Sarah Gamage, Sara Hiller and Aslihan Kes (October 2017) discussed about
the Gender and digital financial inclusion”, “International centre for research on
women.” The key objectives of the study was-

1. To understand where and how gender influences financial inclusion and

digital financial inclusion.

2. To represent the strength of the evidence base to show what the field knows
and where there are gaps .

24
Suresh Aaluri, Dr. M. Srinivasa Narayana, Dr. P. Vijay Kumar had a
study on digital financial inclusion initiatives and progress with reference to
Indian banking industry in digital era. This article evaluates the initiative
taken by the selected banks in financial inclusion and the efforts made for ITC
based financial services, on the basis of RBIs reports and other bank reports.
It also focused upon the trends in banking sector for financial inclusion,
regulation, technology in India.

Ignacio Esteban Carballa (February 2018) from National Scientific and

Technical Research Council studied about the financial inclusion in Latin
America. They focused upon financial inclusion which aims at promoting
economic well-being and social inclusion through the supply of financial
services and products for the satisfaction of different sections of society.

Peterson kitakogelu (2018) studies the Impact of digital finance on financial

inclusion and stability. The digital finance issues discussed in this article are
relevant for the on-going debate and country-level projects directed at greater
financial inclusion via digital finance in developing and emerging economies.

25
 CHAPTER-3

OBJECTIVES OF THE STUDY

26
 OBJECTIVES

 To discuss the scenario of digital finance in India.

 To study the awareness of digital finance options in India.

 To discuss the role of digital finance in cashless economy.

27
 CHAPTER-4

RESEARCH METHODOLOGY

28
 RESEARCH METHODOLOGY

Population- residents of Ludhiana city

Sample size- 50 individuals of Ludhiana city

Data- Primary data through questionnaire

Sampling Technique- Convenience Sampling because it requires less time

and is cost effective.

RESEARCH

Research is a structured enquiry that utilizes acceptable scientific

methodology to solve problems and create new knowledge that is generally
applicable. This project describes the methodology adopted for conducting the
study on “Digital Finance- A road to cashless economy.”

RESEARCH METHODOLGY

It enumerates the descriptions of the sampling plans, research instruments

used for the collection of data pre-testing of the questionnaire, the use of
statistical tools and techniques for the analysis of the collected data.

29
RESEARCH DESIGN

Research design refers to the way information is gathered from subjects and,
in the case of descriptive research, the nature of the treatments that are
controlled by the investigator. In this study, self-administered questionnaire is
chosen to collect data about “Digital Finance- A road to cashless economy.”

SELECTION OF POPULATION

To achieve good reputation validity, Quantitative researchers must select the

sample randomly from the defined population to which they wish to
generalize their results. Population for the study was the people of Ludhian a
city from the ages of twenty one (20) years and above. However, due to the
large size of population, the researcher cannot test every individual in the
population.

SELECTION OF SAMPLE

Sampling Unit: Consisted of students, housewife, business man/woman and

professionals.
Sampling Size: The sample for this research was 50 respondents.

SAMPLING TECHNIQUE

Primary data: In this study, I have used the unbiased structured questionnaire
for receiving primary data.
Secondary data: In this study, I have acquired the information from various
newspaper, magazines, books and various websites.

30
INSTRUMENTS FOR DATA COLLECTION

Questionnaire is the main instrument used in this study. A questionnaire is a

technique of data collected where different people are asked to respond to the
same set of questions in a predetermined order. It includes structured
interviews and telephone questions as well as those in which the questions are
answered without an interviewer present. Subjects usually record a written
response to each questionnaire item. Subjects can fill out the questionnaire at
their convenience and answer the items in any order.

DATA INTERPRETATION TECHNIQUES

For data interpretation, the data was processed with various tools of
percentage. For interpretation, various tools have been used and they are as
follows:

-Table
-Pie charts
-Bar graphs
-Cones
-Doughnut

31
 CHAPTER-5

ANALYSIS AND DATA INTERPRETATION

32
 ANALYSIS AND DATA INTERPRETATION

TABLE 1

AGE GROUPS NO. OF RESPONDENTS

20-30 21
31-40 11
41-50 11
51-60 07

AGE GROUPS

14%

20-30
42%
31-40
22%
41-50
51-60

22%

Figure 1- Percentage of respondents of different age groups.

Interpretation- As shown in the above figure, out of total respondents, 42%

belong to age from 20-30, 22% belong to 31-40, 22% belong to 41-50 and 14%
belong to 51-60.

33
TABLE 2

GENDER NO. OF RESPONDENTS

MALE 16

FEMALE 34

GENDER

32%
MALE
FEMALE
68%

Figure 2- Percentage of respondents on gender basis.

Interpretation- As shown in the above figure, 68% of the respondents are female
and 32% of the respondents are male.

34
TABLE 3

QUALIFICATION NO. OF RESPONDENTS

12TH 8

GRADUATION 25

POST-GRADUATION 17

30

25

20

15
25
10
17
5
8

0
12TH GRADUATION POST-GRADUATION

QUALIFICATION

Figure 3- Percentage of respondents on the basis of qualification.

Interpretation- As shown in the above figure, out of 50, 8 respondents have done
12th, 25 respondents are graduate and 17 respondents are post-graduate.

35
TABLE 4

OCCUPATION NO. OF RESPONDENTS

PROFESSIONALS 11

BUSINESS 14

HOUSEWIFE 12

STUDENT 13

14

12

10

8
14
13
6 12
11
4

0
PROFESSIONALS BUSINESS HOUSEWIFE STUDENT

OCCUPATION

Figure 4- Percentage of respondents on the basis of occupation.

Interpretation- As shown in the above figure, out of 50 respondents, 11

respondents belong to job sector, 14 respondents belong to business, 12
respondents are housewife and 13 respondents are students.

36
TABLE 5

AWARENESS OF DIGITAL FINANCE

DIGITAL FINANCE NO. OF RESPONDENTS

YES 50

NO 00

AWARENESS ABOUT DIGITAL

FINANCE
0%

YES
NO

100%

Figure 5- Percentage of respondents aware about digital finance.

Interpretation- As shown in the above figure, all the respondents i.e. 100 % of
respondent are aware about digital finance.

37
TABLE 6

THE MOST CONVENIENT WAY TO MAKE PAYMENTS

MODE OF PAYMENT NO. OF RESPONDENTS

Card 12

Cash 7

Both 31

MODE OF PAYMENTS

24%
Card
Cash
62% 14% both

Figure 6- Percentage of respondents answering about the mode of payment

they prefer.
Interpretation- As shown in the above figure, 24% of respondents prefer card,
14% of respondents prefer cash and 62% of respondents prefer both mode of
payments.

38
TABLE 7

SOURCES

SOURCE NO. OF RESPONDENTS

Newspapers 5
Television 14
Internet 20
Friends 8
Other 3

SOURCE
20
18
16
14
12
10 20
8
14
6
4 8
5
2 3
0
Newspapers Television Internet Friends others

Figure 7- Percentage of respondents answering about the source from which

they got to know about digital finance.
Interpretation- As shown in the above figure, out of 50 respondents, 5
respondents got to know about digital services from newspapers, 14 respondents
from television, 20 respondents from internet, 8 respondents from friends and 3
respondents from other sources.

39
TABLE 8

BENEFITING

NO. OF RESPONDENTS

Yes 35

No 1

Not much 14

Not much 14

1
No

35
Yes

0 5 10 15 20 25 30 35

DIGITAL PAYMENT BENEFIT

Figure 8- Percentage of respondents answering about whether digital finance

is benefiting to them or not.
Interpretation- As shown in the above figure, out of 50 respondents, 35
respondents are getting benefit from digital mode of payment, 1 respondent is not
getting benefit and rest of 14 respondents are not getting much benefit from
digital mode of payment.

The mean score of individuals for digital finance benefits comes out to be
2.68, i.e. 3 which indicate the individuals have benefited from the digital
finance.

40
TABLE 9

UNEDUCATED POPULATION TO ACCESS THE DIGITAL PAYMENTS

DIFFICULT FOR UNEDUCATED

NO. OF RESPONDENTS
POPULATION
Yes 43

No 7

Difficult for uneducated population

14%

Yes
No

86%

Figure 9- Percentage of respondents answering whether uneducated people

face problem while having access to digital finance.

Interpretation- As shown in the above figure, according to 86% of respondents,

uneducated population face problem while accessing to digital finance while 14%
of respondents think that uneducated population don’t face any problem.

41
TABLE 10

PREFERNCES

PREFERENCES NO. OF RESPONDENTS

Debit card 09
Credit card 05
ATM 14
Net-banking 8
E-wallet 1
All of them 13

16
PREFERENCES
14

12

10

8
14
13
6
9
4 8
5
2
1
0
Debit card Credit card ATM Net-banking E-wallet All of them

Figure 10- Percentage of respondents answering about preferences.

Interpretation- As shown in the above figure, out of 50 respondents, 9
respondents prefer debit cards, 5 respondents prefer credit card, 14 respondents
prefer ATMs, 8 respondents prefer net-banking, 1 respondent prefer e-wallet and
13 respondents prefer all these.

The mean score of individuals for the preferences for digital financial
transactions come out to be 4.4 i.e. 4 which indicates they prefer debit card
for digital transactions.

42
TABLE 11

BIGGEST CONCERN ABOUT DIGITAL PAYMENTS

CONCERN NO. OF RESPONDENTS

Security 23
Poor internet connectivity 13
Cost 4
Lack of tech knowhow 10

CONCERN

20%
Security

46% Poor internet connectivity

8%
Cost
Lack of tech knowhow
26%

Figure 11- Percentage of respondents answering about their concerns related

to digital finance.

Interpretation- As shown in the above figure, 46% of respondents face security

concerns, 26% of respondents face poor internet connectivity concerns, 8% of
respondents have costs concern and 20% of respondents have lack of tech
knowhow concern.

43
TABLE 12

PROBLEMS

PROBLEMS NO. OF RESPONDENTS

More time in making fund transfer 03
Slow speed in working 13

Critical process 09

Not easy for uneducated people 25

25
PROBLEMS
20

15
25
10

13
5 9
3
0
More time in Slow speed in Critical process Not easy for
making fund working uneducated
transfer people

Figure 12- Percentage of respondents answering about problems related to

digital finance.
Interpretation- As shown in the above figure, out of 50 respondents, 3
respondents thinks digital transactions take time in fund transfers, 13 respondents
thinks it has slow speed in working, 9 respondents think that it has a critical
process and 25 respondents think that it is not easy for uneducated people.

44
TABLE 13

BENEFITS

BENEFITS NO. OF RESPONDENTS

Time saving 29
Inexpensive 04
Easy processing 06
Easy fund transfer 09
Others 02

BENEFITS

19%
Time saving
Inexpensive
13%
Easy processing
60%
Easy fund transfer
8%

Figure 13- Percentage of respondents answering about the benefits of digital

finance.
Interpretation- As shown in the above figure, 60% of respondents says that
digital financial transactions are time saving, 8% of respondents thinks it is
inexpensive, 13% of respondents thinks that digital transactions have easy process
and 19% of respondents says that it helps in making easy fund transfer.

45
TABLE 14

DEMONETIZATION

DEMONETIZATION NO. OF RESPONDENTS

Yes 27
No 06
Can’t say 17

30
DEMONETIZATION
25

20

15
27

10
17

5
6

0
Yes No Can’t say

Figure 14- Percentage of respondents answering related to demonetization.

Interpretation- As shown in the above figure, out of 50 respondents, 27

respondents answered yes related to demonetization, 6 respondents answered no
and 17 respondents have no idea about this.

The mean score of respondents for the demonetization come out to be 2.4 i.e.
2 which means that individuals have not good idea about this.

46
TABLE 15

GST APLLICATION

GST NO. OF RESPONDENTS

Agree 33
Disagree 02
Can’t say 15

GST

30%
Agree
Disagree

4% Can’t say
66%

Figure 15- Percentage of respondents answering related to GST.

Interpretation- As shown in the above figure, 66% of respondents agree, 4% of

respondents disagree and 30% of respondents have no idea.

According to the mean score of the individuals for the GST application, the
result comes out to be 2.6 i.e. 3 which means that respondents agree to this.

47
TABLE 16

THE STANDARD OF LIVING

STANDARD OF LIVING NO. OF RESPONDENTS

Yes 40
No 04
Don’t know 06

40
STANDARD OF LIVING
35

30

25

20 40

15

10

5 6
4
0
yes no don’t know

Figure 16- Percentage of respondents answering whether the standard of

living will uplift or not.
Interpretation- As shown in the above figure, out of 50 respondents, 40
respondents agree that digital finance will uplift the standard of living, 4
respondents disagree and 6 respondents have no idea.

The mean score of the respondents that whether digital finance will uplift the
standard of living results 2.7 i.e. 3 which reflects that it will definitely uplift
the standard of society.

48
TABLE 17

APPS

APPS NO. OF RESPONDENTS

Paytm 27
Mobikiwik 03
FreeCharge 11
PayUmoney 03
Others 06

APPS
Others 6

PayUmoney 3

Freecharge 11

MobikWik 3

Paytm 27

0 5 10 15 20 25 30

APPS

Figure 17- Percentage of respondents about the apps they prefer.

Interpretation- As shown in the above figure, out of 50 respondents, 27

respondents prefer Paytm, 3 respondents prefer Mobikiwik, 11 respondents prefer
FreeCharge, 3 respondents prefer PayUmoney and 6 respondents prefer other
apps.

49
TABLE 18

RATING TO THE PROJECT ‘DIGITAL FINANCE’

RATING NO. OF RESPONDENTS

Excellent 13
Fair 13
Good 23
Poor 01

RATING
2%

26%
Excellent
Fair
46%
Good
poor
26%

Figure 18- Percentage of respondents giving rating to the decision taken by

PM Narendra Modi.
Interpretation- As shown in the above figure, 26% of respondents rated
excellent, 26% of respondents rated fair, 46% of respondents rated good and 2%
of respondents rated poor.

The mean score of the rating to digital finance come out to be 3.1 i.e. 3 which
means that it is excellent decision taken by PM Narendra Modi.

50
 CHAPTER-6

FINDINGS AND CONCLUSION

51
 FINDINGS AND CONCLUSIONS

 Financial services are the lifeblood of an economy, enabling households

and businesses alike to save, invest and protect themselves against risk.
Yet in many emerging economies today, the majority of individuals and
small businesses lack access to even basic savings and credit products,
which hinders economic growth and perpetuated poverty.
 So, digital technologies starting with mobile phones have the potential to
resolve this problem. Households and businesses can use digital payments
to interact seamlessly and efficiently, unleashing large gains in
productivity and investments.
 The data from questionnaire collected from respondents was between the
age groups i.e. 42% respondents lie in the age group of 20-30, 22%
respondents lie in the age group of 31-40, 22% respondents lie in the age
group of 41-50, and 14% respondents lie in the age group of 51-60.
 There are 32% male respondents and 68% female respondents in the
survey done related to digital finance.
 In the survey conducted, 16% respondents have done 12th, 50%
respondents are graduate and 34% respondents are post-graduate.
 I found that there are 22%, 28%, 24% and 26% respondents from job
sector, businessman, housewives and students respectively.
 In the survey conducted, 100% respondents are aware about digital
payments.
 In the survey, I have concluded that 24% respondents prefer card, 14%
respondents prefer cash and 62% respondents prefer both as a convenient
way to make payments.
 I found that 10% respondents get to know from newspapers about digital
services, 28% respondents from television, 40% respondents from

52
 internet, 16% respondents from friends and rest 6% respondents got to
know from other sources.
 In the survey conducted, 70% respondents got benefited from digital mode
of payments, 2% respondents got no benefit and rest 28% respondents
don’t have much idea.
 According to the survey, 86% respondents agree that uneducated
population find it difficult to access digital payments and 14% respondents
do not agree to this.
 I found that 18% respondents prefer debit card, 10% respondents prefer
credit card, 28% respondents prefer ATMs, 16% respondents prefer net-
banking, 2% respondents prefer e-wallet and 26% respondents prefer all of
them.
 This survey concluded that 46% respondents have security issues, 26%
respondents have poor connectivity concern, 8% respondents have cost
issues and rest 20% respondents have lack of tech knowhow.
 According to the survey, 6% respondents face problem while transferring
funds, 26% respondents feels it has slow speed in working, 18%
respondents thinks it has a critical process and other 50% respondents face
problem as its not easy for uneducated people.
 I found that 58% respondents thinks that digital finance is time saving, 8%
respondents thinks it is inexpensive, 12% respondents think it has easy
processing, 18% respondents says it has easy fund transfer and rest of the
respondents i.e. 4% have other benefits of digital financial services.
 According to the survey, 54% respondents agree that during
demonetization, digital finance was need of hour, 12% respondents
disagrees and rest of the respondents have no idea about this.

53
 In this survey, 66% respondents agree that digital finance is streamlined
the process of GST application, 4% respondents disagree and 30%
respondents have no much idea.
 I found that 80% respondents agree that digital finance will uplift the
standard of living, 8% respondents disagree and 12% respondent have no
such idea related to this.
 This survey concluded that 54% respondents prefer Paytm, 6%
respondents prefer Mobikiwik, 22% respondents prefer FreeCharge, 6%
respondents prefer PayUmoney and 12% respondents prefer other digital
payment apps.
 According to this survey, 26% respondents rated excellent, 26%
respondents rated fair, 46% respondents rated good and 2% respondents
rated poor to the ‘Digital India’ project driven by PM Narendra Modi.

54
 CHAPTER-7

SUGGESTIONS

55
 SUGGESTIONS

Delivery of financial services via mobiles, cards and other digital means is
growing at a blistering pace in some markets. Many of us are asking how digital
financial inclusion can be accelerated.

Also another important question “what are reasonable steps that providers and
other players should be taking to ensure that these services are being delivered
fairly, transparently and safely?”

So to tackle this question, many are mobilizing around a new banner-

“responsible digital finance”. So following are some suggestions to improve
digital finance –

 Track fraud better and explore cooperative approaches to tackle it-

This is one of the biggest reason why customers don’t want to rely on
digital payments totally. So, it’s important that these fraud actions must be
tackled.

 Develop more user-friendly front-end interfaces- Many users report

problems regarding the complex language. Also, conducting transactions
often requires many steps, which consumers say are very confusing. Also
it leads to customer mistakes, which are hard to resolve.

 Make complaints handling faster, more timely, and free- There should
be dedicated and appropriately-trained call centers. Also proving too-free
lines seems fair to resolve a problem.

 Bring awareness about digital finance among people- Many people still
in India are not aware about the digital financial services. So, it becomes
important to aware them about such and motivate them to opt such
facilities.

56
 Guidance on the consumer protection issues- Many consumers don’t
prefer digital transactions because they fear that they may lose their
money. So the regulators must guide them on basic consumer protection
issues, cyber security threats and privacy concerns.

57
CHAPTER-8

LIMITATIONS

58
 LIMITATIONS

 There is shortage of time to conduct a study.

 The possibility of some respondents giving false answers.

 Scope of study is limited.

59
CHAPTER-9

CONCLUSION

60
 CONCLUSION

Digital finance is a transformational solution and can be implemented without

much cost. Digital channels reduce cost for providers and increases convenience
for users, opening access to finance for all people at all income levels and in rural
areas. Capturing this opportunity will require concerted effort by business and
government leaders. Though many plans have been introduced by regulatory, still
many people prefer to use cash. According to the survey done, 86% of
respondents think that uneducated population may find difficult to access digital
transactions. 46% of the respondents have issues regarding security, so they have
fear of using digital services. Also 80% of the selected population has the view
that digital finance will definitely uplift the standard of living. So the government
needs to bring awareness among the rural people and guidance should be
provided. Some suggestions and plans must be implemented in emerging
economy for the development of the country.

61
REFERENCES

62
 REFERENCES

 Tariq Abbasi (May 2016), “The impact of digital financial services on firm’s
performance.”
 Daniela Gabor and Sally Heather Brooks (November 2016), “The digital
revolution in financial inclusion.”
 Ignacio Esteban Carballa (February 2018),”The financial inclusion in Latin
America”, “National Scientific and Technical Research Council.”
 Aijaz A. Shaikh, Payam Hanafizadeh, Heikki Karjaluoto (November 2016)
“Mobile Banking and Payment System- a conceptual standpoint”, “article-
International Journal of e-Business Research.”
 Gomber, Peter Koch, Michael (July 2017),”Digital finance and Fintech.
Digital finance”
 Gurpreet Kaur (2015),”Financial Inclusion and Digital India”, “International
journal of business management”
 Peterson kitakogelu (2018), “The Impact of digital finance on financial
inclusion and stability”
 Suresh Aaluri, Dr. M. Srinivasa Narayana, Dr. P. Vijay Kumar, “Digital
financial inclusion initiatives and progress”, reference to Indian banking
industry in digital era.
 Yawe et al (2015), ‘The financial inclusion and its relationship with
inequalities in income and opportunities”
 Charan Singh, Akanksha Mittal and Ritesh Garg (2015), “The digital financial
inclusion”, Working paper series no 12209, volume 2.
 Francis Agyekum, Staurt Locke and Nirosha Hewa-Wellalage (2016), “The
financial inclusion and digital financial inclusion”
 Michael Rizzo (2014), “Digital Finance- empowering the poor via new
technologies”

63
 MG-digital finance for all full report- September 2016
 https://www.mckinsey.com/global-themes/employment-and-growth/how-
digital-finance-could-boost-growth-in-emerging-economies
 http://digitaljagriti.in/overview.html
 https://fusion.werindia.com/finance-talk/suggestions-improve-digital-
payments
 https://research.hks.harvard.edu/publications/workingpapers/Index.aspx
Research and impacts of digital financial services (September 2016) Working
paper 22633, “National Bureau of Economic Research”
 Sarah Gamage, Sara Hiller and Aslihan Kes(October 2017), “Gender and
digital financial inclusion”, “International centre for research on women”
 http://digitalindia.gov.in/
 TRANS Asian Journal of Marketing and Management Research (TAJMMR)
 Global Findex Report
 “Role of Digital Banking in furthering financial inclusion”, M&E Industry
report.
 The Business Standard
 The Economic Times

64
ANNEXURE

65
 QUESTIONNAIRE

DIGITAL FINANCE IN INDIA- A ROAD TO CASHLESS ECONOMY

NAME- ______________________

AGE- ______________________

GENDER- _____________________

EDUATIONAL QUALIFICATION- ______________________

OCCUPATION- ____________________

ANNUAL INCOME-___________________

1. Are you aware about digital payments?

Yes No

2. According to you, which is the most convenient way to make

payments?
Card Cash Both

3. From where do you get to know about digital services?

Newspapers Television

Internet Friends

Others
4. Do you think digital mode of payment is benefiting to you?
Yes No Not much

66
5. According to you, is it difficult for uneducated population to access the
digital payments?
Yes No

6. Your preference for digital financial transactions-

Debit card Credit card ATM

Net-Banking E-Wallet All of them

(Skip this question if you don’t use digital mode of payments)
7. According to you, what is ‘DIGITAL FINANCE’?
_________________________________________________________
_________________________________________________________
_________________________________________________________

8. What is your biggest concern about digital payments?

Security Poor internet connectivity

Costs Lack of tech knowhow

9. Which type of problem you are facing while using digital financial
services?
More time in making fund transfer
Slow speed in working
Critical process
Not easy for uneducated people

67
10. Which of the following benefits accrue to you while using digital
financial services?
Time saving Easy fund transfer

Easy processing Inexpensive Others

11. In the wake of demonetization in India, do you think digital finance or

payment is the need of hour?
Yes No Can’t say

12. According to you, did digital finance streamline the process of GST
application?
Agree Disagree Can’t say

13. Do you think making India digital will uplift the standard of living?
Yes No

Don’t know

14. What app do you prefer for digital payments?

Paytm Mobikiwik

FreeCharge PayUmoney

Others

68
15. What rating would you give to the ‘Digital India’ project by PM
Narendra Modi?

Excellent Fair

Good Poor

69