THE DIGITAL FINANCE PARADOX: FINANCIAL INCLUSION VERSUS DEBT VULNERABILITY – A STUDY WITH SPECIAL REFERENCE TO PATHANAMTHITTA DISTRICT, KERALA
https://doi.org/10.65725/JCMCE/2/2/012
JOURNAL OF CONTEMPORARY TRENDS IN MANAGEMENT, COMMERCE AND ECONOMICS (JCMCE)
ISSN: 3108-3501
Volume 2 Issue 2, APR-JUN 2026
Abstract:
Digital financial inclusion has emerged as a transformative force in enhancing access to financial services through digital platforms such as mobile banking, internet banking, digital wallets, and fintech applications. In India, government initiatives including the Pradhan Mantri Jan Dhan Yojana, Aadhaar integration, and increasing smartphone penetration have significantly expanded financial inclusion. Kerala, with its high literacy rate and robust banking infrastructure, has been one of the leading states in adopting digital financial technologies. While digital financial inclusion has improved access to banking services, digital payments, savings, and credit facilities, concerns have arisen regarding its potential negative consequences. The rapid growth of digital lending platforms and instant loan applications has increased the risk of over-indebtedness, particularly among financially vulnerable individuals. Many users lack adequate awareness of loan terms, interest rates, repayment obligations, and digital security practices, making them susceptible to debt traps, fraud, and data privacy violations. This study examines whether digital financial inclusion functions as a tool for economic empowerment and financial accessibility or contributes to financial vulnerability and indebtedness. By focusing on Kerala, the study explores the opportunities and challenges associated with digital financial services and evaluates the factors that determine whether digital financial inclusion becomes a boon or a debt trap. The findings are expected to contribute to policy discussions on responsible digital finance and consumer protection.
Authors: Dr.Sajani.S
Keywords: Digital Financial Inclusion, Fintech Lending, Financial Literacy, Consumer Indebtedness, Kerala Economy.