Analysing the Barriers towards Sustainable Financial Inclusion using Mobile Banking in Rural India

Abstract

Background/Objectives: The paper aims to develop a relationship between perception of users and degree of usage of mobile banking and also study barriers associated with usage of mobile banking in rural India. Methods/Statistical Analysis: The paper uses Technology Acceptance Model (TAM) and inter mixes the concepts with innovation of diffusion theory. Structured Equation Modelling (SEM) is used for data analysis in this study as it would be helpful in calculating and measuring the interrelation between the identified dependent factors for successful diffusion of mobile banking. The fitness of measurement model was also judged using Confirmatory Factor Analysis (CFA) thereby contributing towards reliability and validity of the framework. Findings: The results indicate that usage of the mobile banking technology is largely driven by perception of users and potential users. The results reveal that perception whether it is towards usefulness, ease of use or risk aversion plays an important role towards degree of diffusion of mobile banking in rural setup. The result proposes that the diffusion of mobile banking by banks and financial institutions need to study the degree of perception towards credibility risk before upgrading the technology. The longevity of mobile banking is also supported by the perception of users and influence of peer pressure. Applications/Improvement: The study also contributes towards understanding and relating perception of the users and the technical aspect of the system i.e. risks predicting the behaviour of the users of mobile banking.