Digital and Financial Literacy for Uplifting Women and Achieving Sustainable Development Goals

2.1 Financial well-being and decision making

Financial well-being is the state of satisfying all of one’s current and ongoing financial obligations, feeling secure about one’s financial future, and making life-enhancing decisions (Hudson et al., 2022). More specifically, an individual’s financial well-being corresponds to the extent to which the individual feels that he or she (1) has control over day-to-day and month-to-month finances, (2) can absorb a financial shock, (3) is on track to meet his or her financial goals, and (4) has the financial independence to make the decisions that permit one to appreciate life (Weida et al., 2020). Although specific goals and visions of a good life vary from person to person, these four elements reflect two common and consistent themes: security and freedom of choice in the present and for the future. Retirees display high financial literacy, and together with debt anxiety, this is significantly correlated with resource allocation preferences. Financial literacy reduces debt anxiety in men, increases women’s risk tolerance, and is associated with a higher priority for KiwiSaver. Greater debt anxiety is associated with debt repayment, and debt avoidance in old age is critical to long-term well-being (Noviarini et al., 2023).

2.2 Financial literacy

Financial literacy refers to the comprehension and awareness of financial principles and potential hazards, along with the abilities, drive, and self-assurance to utilize this knowledge and understanding to make sound choices within diverse financial situations. Its objective is to enhance the financial well-being of individuals and society and promote active involvement in economic activities (Méndez Prado et al., 2022). As in the definition of any PISA domain, the first part of the definition concerns reasoning and behavioral traits that ‘are characteristic of the domain,’ and the second part focuses on why literacy in that specific domain was defined. We find a positive relationship between people with higher levels of financial literacy and persons inclined to Socially Responsible (SR) financial investments, and people inclined to SR financial investments are more likely to favor SR financial intermediaries. Compelling evidence of our result emerges by using different numbers of neighbors. SR investors or those with a higher level of financial literacy are more likely to favor SR financial intermediaries. This implies that in order to attract financially literate customers or SRI retail investors, financial companies must do more than offer traditional and SRI products. In order to become sustainable intermediaries, they need to adopt environmental, social and governance (ESG) strategies (Cucinelli & Soana, 2023).

There is a plethora of studies that have examined the link between financial inclusion, financial literacy, and sustainable development and how they are mutually enhanced. However, there is a dearth of literature that explicitly explores this link from the lens of rural agrarian communities, which require development opportunities in finance rather than financial literacy (Akande et al., 2023), and where a more important emphasis should be placed on the role of financial literacy in influencing and improving financial behavior. This link between financial literacy and financial behavior has important implications. The role of limited attention in explaining the positive association between financial literacy and formal bank account ownership, financial market participation, commercial insurance, pension plan ownership and credit card ownership supports the view that individuals with higher levels of financial literacy are more likely to benefit from such counsel due to the ability of greater financial literacy to improve access to specific financial information (Xu et al., 2022). Therefore, we reason that ceteris paribus, individuals with higher financial literacy are more likely to engage in the pursuit of such counsel actively. Furthermore, the extant literature reveals that there is a positive correlation between financial literacy and financial behavior, and specifically, those requiring financial counseling with greater levels of financial literacy are more likely to utilize financial counsel (Liu & Lu, 2023).

2.3 Digital financial literacy

The ability to use digital technologies in an effective and responsible manner is referred to as digital literacy. It is inextricably tied to the specific skills, knowledge, and attitudes that lead to utilizing digital devices, applications, and online platforms for communicating, finding information, critiquing, problem-solving, innovating, and creating. The use of Industry 4.0 technologies, such as financial technology (Fintech) and the strategic utilization of organizational resources are major drivers of long-term sustainability and operational efficiency in firms (Siddik et al., 2023).

Financial literacy refers to its knowledge, skills, and understanding of financial ideas and principles to make informed choices about financial resources. In the concept of financial literacy, we can find several issues connected with personal finance, including budgeting, savings, investment, borrowing, and debt management. Financial literacy links with the knowledge and understanding of available financial products and services, such as bank accounts, loans, credit cards, insurance, and investments. It also refers to the knowledge of financial information, including statements, budgets, and other documents needed to manage finances, and the ability to analyze what the financial information is delivering for the individual. It also concerns smart decision-making about finances to enable the accomplishment of some short- and long-term financial goals (Lusardi & Mitchell, 2014). Financial capabilities work as a mediator between financial literacy, digital financial literacy, and financial decision-making. DFL is a new concept, and it has received less attention in the field of academic papers. So far, fewer empirical papers have explored the direct effect of DFL on financial decision-making. Skills in the specific domain had a direct impact on decisions made about investing and, consequently, on perceptions of financial well-being. Digital financial literacy, being an indicator of financial decision-making, also emerged as a direct predictor and mediator. The impact of financial aptitude and autonomy as mediators of financial decision-making and well-being is clearer. On the other hand, the influence of impulsivity is almost insignificant in relation to financial decision-making (Kumar et al., 2023).

2.4 Women empowerment

The idea of women’s empowerment is about enabling and increasing women’s social, economic, political, and personal resources and capabilities; the concept includes creating an environment in which women are free to make choices and decisions about their lives and work with equality. The advancement of women’s empowerment yields advantages not only for women themselves but also for the broader societal framework. Women’s empowerment enables them to contribute more effectively to various aspects, such as economic growth, poverty reduction, sustainable development, and social progress. This phenomenon fosters a societal environment characterized by inclusivity and equity when the rights and capabilities of every individual are acknowledged and esteemed. Women’s empowerment refers to the systematic progression through which women attain authority and autonomy, enabling them to exercise deliberate decision-making. It is suggested that there is a need for more targeted policies that can effectively address the existing gender gap to promote comprehensive financial inclusion (Ghosh, 2022).

The emergence and contribution of women entrepreneurs to the national economy have played a crucial role in the development of a burgeoning nation. Women have commenced making contributions to economic development through their distinct professional endeavors. Women have transitioned from their traditional roles as homemakers to become influential business leaders with the skills and determination to manage a firm and overcome obstacles for their advantage effectively. The increasing IT environment has created extra opportunities for women entrepreneurs to enhance the growth and success of their companies. One crucial aspect that is widely acknowledged as significant in decision-making and organizational activities is the ability to conceptualize and benchmark work. The promotion of positive behavior in women’s entrepreneurship within a specific cultural and societal context serves to enhance empowerment (Andriamahery & Qamruzzaman, 2022).

2.5 Financial resilience

The terms “resilience” and “resiliency” have gained significant prominence in discourse since the onset of the mortgage meltdown and subsequent financial crisis. Financial resilience refers to an individual’s capacity to endure and recover from life circumstances that harm their income or assets. The longer-term perspective pertains to one’s connection with finances. Financial inclusion initiatives aim to improve the accessibility of financial services for vulnerable populations, fostering greater inclusivity and financial resilience within societies. The rise of the fintech industry and digital means of payment, coupled with the fact that more than two-thirds of the world’s population now own a mobile phone, all indicate how digital financial literacy is now taking hold in societies worldwide. In response to this shift, it is time to reimagine financial literacy by blending it with digital literacy – something that has important implications for countries aspiring to adopt either a dual-track or a combination approach to improving the long-run resilience of households (Kass-Hanna et al., 2022).

India has the highest percentage of inactive bank accounts in the world, at 35 percent (Dhanamalar et al., 2020). According to the Findex survey, 2021, more than 32 percent of women-owned bank accounts in the country are inactive. The country shows the highest gender gap in inactivity, with a difference of 12 percentage points. Surprisingly, fewer than one in five banked women save formally with the bank (World Bank, 2021).

4.1 Synergy between digital, financial literacy, women’s empowerment and SDGs

Mapping emergent opportunities for digital and financial literacies could be likened to the interlacing of two strands of thread. Each strand both complements and strengthens the other and, depending on how much it is intertwined, the combination yields a stronger, more dynamic whole. The sum of these two literacies together is greater than the two components on their own. The integration of digital and financial literacies can improve favorable outcomes by the following:

Increased access and outreach: Digital democratization of financial knowledge has the potential to increase access and outreach by providing members of the public access to a wider range of financial education materials, tools, and services via the Internet. One of the major benefits of the digital age has been the democratization of financial knowledge, which has allowed many people, irrespective of where they live or what their economic status is, to have access to this information via online courses, apps, or websites.

Better financial decision-making: The digitally savvy person can use a range of online tools, such as budget trackers, investment apps, and online banking, to help make sound financial decisions. Organizations can quickly assess, evaluate, and act on their financial data, thus making better use of their financial information and, as a result, having better financial governance.

Empowerment due to Information: Information is widely available on the Internet, and people can use it to become empowered. Women now have access to information on their rights, benefits, and opportunities via the Internet, which helps them earn more money and be more independent.

Better economic participation: Digital technologies enable women to gain better economic participation by taking advantage of the gig economy, e-commerce or other online ventures with digital financial literacy, thereby improving their economic status.

Security and transparency: As long as someone has a good understanding of the process involved, digital financial transactions can be more transparent and secure than more traditional methods. In places where women’s access to funds may be restricted, women must be able to exercise covert control over their resources.

Broader networks and horizons: Digital literacy means access to networks, communities and markets beyond the geographic area, providing opportunities and potential for growth. With connectivity, alongside financial literacy, greater entrepreneurial opportunities and the possibility of forming mutually productive partnerships could come.

Personalized digital financial solutions: Through advanced digital financial platforms enabled by AI and ML technologies, users can receive personalized digital financial recommendations to enhance their financial well-being. Users with sufficient digital literacy skills can explore and access these personalized recommendations to their advantage.

Promotion of Sustainable Finance: Although the goals of sustainability are gaining ground at an international level, it is still incumbent upon digital platforms to promote sustainable finance so that people can make the right investment decisions. Digital literacy helps in procuring and utilizing the information and analysis available regarding ethical investments and sustainability-focused financial goals. People with digital literacy can match their financial strategy to the goals of global sustainability.

Women can use green microfinance to increase their financial literacy and become more empowered, thanks to their local knowledge and experience. In this case, the indigenous knowledge came from the women’s adherence to the ancestral worship tradition for their Marapu deities. The study aimed to understand if strengthening the pro-literacy (SDG 4) policy could help the government at the local level achieve its goals related to gender equality (SDG 5) and climate change (SDG 13) (Pathak et al., 2022).

Digital literacy provides access to a vast digital space with tremendous opportunities, while financial literacy provides the necessary understanding to make the best use of the space. Together, they provide an enabling environment for individuals, especially those who are disadvantaged, such as women, to get access to resources, make informed choices, and build a resilient economic life. The integration process is not only to help people develop their agency but also to promote the growth of the overall economy and stability and further the goal of building a community with a shared future for mankind, a community of shared destiny that is inclusive, fair, and rich. There is a persistent inequality in the access, use, and benefits of digital financial services between genders and socioeconomic statuses and between urban and rural areas in developing countries. By the time we finished the study, we made several recommendations. Most of them were related to better digital infrastructure, simplifying the complex nature of conventional banking, and promoting the importance of financial education, all to support the development of digital financial inclusion in the world (Tay et al., 2022).

Patriarchy as a structural barrier, psychological barriers, low income/wage, low financial literacy, lack of financial access, and ethnicity are a few of the barriers that were identified as hindering women’s empowerment. Our extensive literature survey further identified six well-evidenced interventions that were brought about by the government and corporate sector, namely: government/corporate programmes and policies, microfinance, formal savings accounts and services, cash and asset transfer programmes, self-help groups, and digital inclusion. To conclude, although ample research has been conducted in this area, still the literature has excessive gaps, which need to be explored further.

4.2 Underpinning theories

The present study investigates two crucial theories. The theory of planned behavior (TPB) and the technology acceptance model (TAM) are two prominent theoretical frameworks that have significantly contributed to the comprehension of human behavior, particularly in relation to the acceptance and utilization of technology.

The theory of planned behavior suggests that individuals adopt a very rational decision-making process where they weigh up the pros and cons of their chosen course of action. The theory of reasoned action and the theory of planned behavior both apply to situations where there are arguments for choosing to act or arguments for not choosing to act. According to the theory of planned behavior, the intention is the main determinant of behavior – and what we intend to do is to either do or not do a particular thing. Three aspects of preferences influence the formation of intentions: (i) attitude, that is, one’s evaluation of whether to do or not do a particular thing; (ii) subjective norm or one’s perception of whether other people think that one ought to do, or not do, a particular thing; and (iii) perceived behavioral control or one’s perception of how able or unable one is to do the thing in question.

The Theory of Planned Behaviour, one of the most popular theories in social psychology, has been extended by adding perceived behavioral control to offer a complete account of people’s behavioral intentions. General, specific, and situational goals, acting together with measures of behavioral control beliefs, allow for precise predictions of diverse behavioral intentions. Goals plus behavioral control beliefs can account for the range of actual behavior. Together with attitudes and subjective norms, perceived behavioral controls are associated with distinct sets of salient behavioral, normative, and control beliefs, which are specific to the target behavior under consideration. However, the exact nature of these relations remains to be specified. The theory identifies and draws upon three distinct groups of factors.

Perceptions of behavioral control refer to a person’s belief that he or she can perform a behavior or task adequately, which recognizes the many factors (internal and external) that can affect the person’s capacity for action.

4.4. Theoretical contributions

In the face of these technological advancements and the fact that the aim of digital literacy is more or less aligned with the 2030 Agenda under the goal of women’s empowerment (and other sustainable development goals, or SDGs), the digital-financial space seems an appropriate context in which to apply the TPB, the TAM and other important models, and to test and refine them for broader applicability. This review of behaviors and technology adoption in this inter-integrated context should help us discern both the flexibility and the limitations of these models. Thinking about ‘perceived behavioral control’ in the context of digital financial literacy might also require a redefinition: perhaps when linked to digital finance, it would be appropriate to consider the existence of underlying social norms or even infrastructure constraints that might transform this construct considerably. In the TAM, we have ‘perceived usefulness’ related to the goal of digital finance, which refers less to the fact that the task is being completed than to more general life goals, such as empowerment and sustainability.

The integration of digital instruments into financial decision-making allows for the examination of the interplay between the TPB and TAM constructs. For instance, how does behavioral intention, as proposed by the theory of planned behavior (TPB), impact the usefulness of the technology acceptance model (TAM)? Findings could start to lay the framework for a unified model. Moreover, an analysis of cultural differences might help develop culturally adapted theoretical models, which are vital for global applicability. The environment may be different, hence generating the discovery of important new constructs or dimensions that are not incorporated in the existing theories. Community might be one of the influential factors that emerges in the acceptance of digital financial literacy. This review paper explores the interplay among digital and financial literacies, women’s emancipation, and sustainable development goals (SDGs), aiming to develop more holistic and situation-based frameworks consistent with current global challenges and expectations.