An Economic Analysis of Digital Financial Literacy and Investment Decisions among Women in Tamil Nadu

Abstract

Digital financial services are becoming an important part of women's financial lives. This study
examines digital financial literacy and investment adoption among women in Tamil Nadu. The study is
based on 250 women respondents from selected districts of Tamil Nadu. Primary data were collected
through a structured questionnaire.
The study examines the socioeconomic characteristics, access to digital financial services, dimensions of
digital financial literacy, levels of digital financial literacy, digital financial behaviour and investment
instruments adopted by women. The reliability of the digital financial literacy scale is assessed using
Cronbach's Alpha. KMO and Bartlett's Test are used to examine the suitability of the data for factor
analysis. Factor analysis is used to identify the major dimensions of digital financial literacy.
The study finds that women use smartphones, UPI and digital payment services widely. However, their
use of digital services for investment is comparatively limited. Digital financial literacy is found to have
several dimensions, including financial knowledge, digital skills, investment knowledge, risk and security
awareness, and financial confidence. Women show greater preference for familiar investment instruments
such as bank deposits, fixed deposits, insurance and gold.
The study highlights the importance of digital financial literacy in improving women's financial
participation. It also shows that digital access alone is not sufficient. Women need financial knowledge,
digital skills, investment awareness and financial confidence to make informed financial decisions. The
study concludes that strengthening digital financial literacy can support better investment choices,
financial security and women's economic empowerment. Financial education programmes should
therefore combine digital skills with investment knowledge, risk awareness and cyber-security awareness.