Technology as a Catalyst for Financial Literacy: Insights from the Pradhan Mantri Jan Dhan Yojana in Bengaluru’s Urban Poor Communities

Abstract

A growing number of individuals observe the application of digital financial technologies for advancing financial inclusion as a key method to lower poverty and encourage economic growth that includes everyone. Financial inclusion means making different financial products and services available to people who have not been able to use official financial institutions in the past. These products and services include credit, savings, insurance, pensions, and investment possibilities. A key aspect of this effort is to provide economically disadvantaged groups the capacity to take part in the financial mainstream, which will help reduce poverty. The Reserve Bank of India and the Government of India have started a number of programs to achieve full financial inclusion since they know how important this is. The Pradhan Mantri Jan Dhan Yojana (PMJDY) is one of these policies that has been a game-changer. As of June 12, 2024, the program had signed up almost 52.43 crore account holders across rural and urban India. It was acknowledged by the Guinness Book of Records as the program that helped the most people register bank accounts. Digital banking channels and easy-to-access accounts have greatly increased the availability of formal financial services. However, one important question remains: does financial inclusion alone give people the tools they need to make good financial decisions? Do those who have accounts know enough about money and technology to use these services well? Evidence shows that financial inclusion can't fully achieve its goals without enough financial knowledge. Making bank accounts is important, but it doesn't automatically mean that poor and vulnerable people are actively and well-informed about their finances, especially when it comes to digital financial ecosystems. In this context, this study looks at how the PMJDY and other digital financial technologies can help people in Bengaluru's slums become more financially literate. Using a descriptive study method, primary data was gathered from about 500 people living in slums all throughout the city. The study finds that while financial literacy levels are still low, the PMJDY initiative has helped Urban poorresidents become more aware of and capable with money by linking them to digital financial services. This has laid the groundwork for long-term financial inclusion.