Digital Financial Literacy in Rural Emerging Economies: ExploringIts Multidimensional Factor Structure

The rapid digitalization of financial services in emerging economies has created unprecedented opportunities to foster financial inclusion and socio-economic empowerment. In India, state-led initiatives and technological innovations—such as the Pradhan Mantri Jan-Dhan Yojana (PMJDY), Aadhaar-enabled Payment System (AePS), and Unified Payments Interface (UPI)—have significantly expanded financial access. However, a persistent usage gap exists in rural areas, where technology availability does not automatically yield sustained adoption. Digital Financial Literacy (DFL) serves as a critical enabler bridging this gap. Drawing upon the Extended Unified Theory of Acceptance and Use of Technology (UTAUT2) and Perceived Risk Theory, this study empirically investigates the multi-dimensional structure of DFL determinants across rural Gujarat. Utilizing a structured survey administered across all 33 districts (N=1,000), an Exploratory Factor Analysis (EFA) via Principal Component Analysis with Varimax Rotation was conducted. The measurement scale was systematically adapted from validated global literature and customized for the rural Gujarat context. The empirical model extracts 14 distinct latent constructs explaining 65.630% of total variance. The findings highlight that while technical infrastructure and functional knowledge establish baseline adoption, relational factors—including system trust, risk control self-efficacy, and user experience—dictate long-term engagement. The study provides targeted policy recommendations for regulatory bodies, financial institutions, and rural development agencies to accelerate inclusive digital transformation.