By: Rahul Tripathi, Chief Product Officer, Dvara KGFS
Digital Finances is truly empowering our villages. Let us take the case of one of our customers who after spending years abroad in a regular 9-to-5 job, returned to his native village, Agarapettai in Tamil Nadu, during the COVID-19 pandemic. The pause brought by the lockdown gave him time to reflect and pursue his long-standing dream of becoming an entrepreneur. He opened a small Kirana store, but soon faced the challenges of limited capital, low footfall, and lack of guidance.
That’s when he connected with Dvara KGFS. A local wealth manager understood his aspirations and supported him with an Enterprise Loan to expand his store. He was introduced to Dvara KGFS’s Mitra programme, which enabled him to become a financial services agent in his village. Today, he not only runs a thriving store but also helps neighbours access essential banking services and build financial awareness. What began as a personal journey has now become a source of impact for his entire community.
There is a silent transformation happening in the villages where the people want to create a safety net so that they can handle emergencies better. This is happening become of digitalisation in the finance sector.
On July 1st, India celebrated the 10th anniversary of the Digital India initiative. A flagship programme of the Government of India launched by Prime Minister Narendra Modi in 2015, the aim of the programme was to transform India into a digitally empowered society and knowledge economy for every Indian and reach to the remotest part of the country.
The digital economy is growing fast and now India ranks third in the world for digitalisation of the economy, as per the State of India’s Digital Economy Report 2024, released by Indian Council for Research on International Economic Relations (ICRIER).
Digital India Initiatives
Over a decade, Digital India initiative has built strong digital infrastructure across the country. Mobile connectivity has expanded to almost every village. A major part of this digital push has been about connecting rural India. As of January 2025, BharatNet has connected over 2.18 lakh Gram Panchayats with high-speed internet. Nearly 6.92 lakh km of optical fibre cable has been laid, bringing internet to many villages.
In April 2025, over 1,867.7 crore UPI transactions worth ₹24.77 lakh crore were made in one month. Nearly 460 million people and 65 million merchants use UPI. Undoubtedly, digital finances have empowered people and is reshaping the nation’s economic landscape while also opening avenues for growth and innovation.
While the increased use of digital finances comes with many advantages, there are certain challenges which need to be addressed to catalyse the push further.
The major achievement of incorporating digital finances is financial inclusion which is an important step for a country like India where at least 65% of the population live in villages. The government schemes like Digital India, Direct Benefit Transfer, Rupay and UPI payments are redefining the economy in the rural areas. All efforts are being taken to make the people living in the remotest part of the country an integral part of the system. Distribution of subsidies, pensions and other benefits have become easier after the launch of Direct Benefit Transfer scheme.
Government Schemes
Efforts are taken by the government and by private sectors to make rural India digitally literate and that is important for digital finances to aid growth and development. These efforts are largely welcomed with open arms by rural people. Government initiatives like Pradhan Mantri Gramin Digital Saksharta Abhiyaan are working towards making six crore people in rural India digitally literate.
SWAYAM is another such initiative which is spearheading e-education through massive online open courses.
The other advantages of digital finances include easy accessibility, financial independence, and the ease of savings and budgeting. The growth of digital finances in the Indian villages has helped many of the villagers take up entrepreneurial roles which help them improve their family’s economic status.
Access to loans through digital platforms and the convenience of payment systems is helping villagers achieve their business dreams. This is particularly true for women who receive loans through MUDRA Yojana and Stand-up India scheme, both of which promote women-led businesses. Digital finances have truly made a huge difference in the lives of women in rural areas who now manage money independently.
The massive digital transformation is not just enabling people in rural pockets to be a part of the country’s economic framework; it is also paving the way for financial institutions to contribute towards the nation’s growth.
Customer Service Points are also contributing to financial inclusion in rural areas. These ‘small banking hubs’, provide essential services and their accessibility builds trust in the digital systems, especially in places where formal banking infrastructure is yet to be developed.
Digital Setbacks
Though the growth of digital finances has been phenomenal, there is still more battles to be won in this sphere. Continuous work must be done in overcoming infrastructural challenges and in changing people’s attitude towards technology. Fraudulent activities have also impacted consumer sentiment towards digital technologies, making people reluctant to repay digitally on their own, because of which many prefer visiting a local Kirana store with payment services such as BBPS, AEPS and DMT to carry out these transactions.
Increasingly, more suppliers and schemes powered by both public and private sectors are driving the growth of digital finances.
There is still a fear that the country’s most vulnerable portion may be left behind in this transition. This is particularly true of people who live in the remotest areas and are less likely to have the tools and information needed to use digital financial services. Unstable internet connections and high transaction fees are other challenges which play spoiler in adopting digital systems.
To reap the benefits of the digital finances completely, government agencies, financial institutions and fintech professionals should work together.
Dvara KGFS’s Contribution
To overcome these challenges, DVARA KGFS – a major NBFC working in the financial inclusion space from 2008, has adopted several innovative approaches like employing local staff who understand the community’s needs and can communicate effectively with customers and implementing Joint Liability Group loans which fosters a sense of community responsibility and reduces the risk of default.
Dvara KGFS provides doorstep banking services which has been a big hit among customers, especially rural women. The organisation also conducts financial literacy workshops and awareness campaigns to educate customers about their products and the benefits, apart from offering flexible loan products that align with their financial needs.