Augmentation of Digital Financial Services in the Pandemic: A Micro Level Study in Delhi

Abstract

Pandemic has provided impetus to the use of digital financial services during the pandemic. At the same time, the role of digital financial services in financial management and health protection during the crisis is an important challenge. Against this backdrop, the paper analyses the impact of the pandemic on the adoption and use of digital financial services and the perception of government and private employees regarding role of digital financial services during COVID-19. The paper exhibits that majority of the respondents had an access to digital financial services before the pandemic itself. But interestingly, there has been an upward mobility in the use of digital financial services during the pandemic. An individual being a female, educated and a government employee increases the probability of increase in the use of digital financial services while age has a non-negative relationship with the increase in the use of digital financial services. However, COVID-19 has still been unable to close the digital loop since the use of digital mode for merchant payments still remains restricted among respondents, more particularly among women. The use of digital financial services led to the health protection more than the financial management during the pandemic. Male and the general category could experience better financial management as a result of the use of digital financial services during the pandemic than females and other social classes respectively. Also, the younger individuals could better protect their health due to the use of digital financial services than elderly. Poor network connectivity, high risk, low awareness, digital illiteracy and lack of trust are significant challenges that have been identified during the pandemic.