Digital Banking Practices Among Rural Entrepreneurs - A Case Study On Entrepreneurs of Tumkur, Karnataka State Vijay Duggappa

INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW
ISSN:2321-0346 - ONLINE ISSN:2347-1670 - PRINT -IMPACT FACTOR :6.613

VOLUME 8, ISSUE 10, OCTOBER 2020
DIGITAL BANKING PRACTICES AMONG RURAL ENTREPRENEURS – A CASE

STUDY ON ENTREPRENEURS OF TUMKUR, KARNATAKA STATE
VIJAY DUGGAPPA
Assistant Professor, Department of Economics, Sree Siddaganga Arts, Science & Commerce
College for Women, Tumkur
ABSTRACT
Banking and financial Institutions are two important sectors that fuel the development of any
economy. In India these are the two sectors which have been the catalyst for surge of industries
and trade. The industry and service sectors in the country depend largely on banks and financial
institutions for their financial requirements. The entrepreneurs, that too the rural entrepreneurs
engaged both in manufacturing and service sector primarily depend upon banks for their
financial needs - both seed capital and working capital requirements. With the advent of
“Digital India”, the banking sector has undergone tremendous changes. These changes are
attributable to the changing regulations, customer requirements and more due to the
technological advancements. The banking services are now more internet-based and digital.
This has forced the users including the rural entrepreneurs to adapt to the new and dynamic
services provided by the banks. This paper aims to study the awareness among rural
entrepreneurs about the digital services provided by the banks, the most used digital services,
benefits derived by use of digital services and the challenges they face in using digital banking
services.
Key Words: Digital Banking, Rural Entrepreneurs, Working Capital
1. Introduction
The emergence of innovative financial technology has revolutionized financial services in

India as well as the banking sector. It has resulted in the introduction and advancement of
several technology trends that have contributed to the radical transformation, growth, and
advancement of these industries. The alliance between the innovative technologies of the
financial sector and banking services has changed the conventional systems of handling
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money, and this collaboration is expected to create a massive shift with emerging trends in
financial services.
The customers of banking services are now exposed to innovative services. The customers
include both the retail individual customers and entrepreneurs. The banking sector in India
has been successfully catering to the financial needs of the rural entrepreneurs both in terms
of seed capital and working capital requirements.
In the light of changing scenario of the banking sector, the rural entrepreneurs are also now
required to use technology-oriented digital services.
2. Statement of the Problem
The internet-based digital banking services provided by the banks have led the rural
entrepreneurs to adopt the changes to operate successfully. Use of these services enhances
the operations and efficiency of the enterprises but also face some challenges in
implementing the same. The present study aims to identify the extent of awareness of digital
banking services among rural entrepreneurs, in Tumkur, which is a hub of many SMEs,
particularly in rural areas of the district.
3. Review of Literature
Chirag & Darshan (2013) opine that the concept of technology is new to the rural
consumers and efforts should be made to educate the consumers on digital banking
services.
Malik S (2014) opines that innovation is the key to survival of banks. The need for
innovation and digitalization of banking products is clear and obvious in the current
scenario.
Vivek Tiwari (2018) opines that the adoption of digital technology and payment methods
have led to an increase in delivery of credit in the rural areas.
4. Objectives of the Study
 To study the awareness of digital banking services among rural

entrepreneurs.
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 To identify the digital banking services most used by rural entrepreneurs.

 To study the benefits of digital banking services to the rural entrepreneurs.
 To study the major factors affecting the use of digital banking services by
rural entrepreneurs.
5. Scope of the Study
The present study focuses on the use of digital banking by the rural entrepreneurs of Tumkur.
The study has been conducted on the rural entrepreneurs of Tumkur. The rural entrepreneurs
include both manufacturers and the entrepreneurs engaged in delivering services in rural areas.
The study aims to identify the extent of awareness of various digital banking products, the
digital products that are frequently used, advantages offered by digital banking products, the
factors affecting the use of these services and the challenges faced by rural entrepreneurs in
using digital banking in their business operations.
6. Research Methodology
Exploratory research is used in this study which aims to explore the extent of awareness of
Digital banking products among the rural entrepreneurs of Tumkur. Case Study method is used
to analyze the use of Digital Banking by rural entrepreneurs of Tumkur.
6.1 Sources of Data
Primary Data: The study mainly uses data from primary sources. A structured Questionnaire
has been used to collect the data from the SMEs under study.
Secondary Data: Information from various articles published in journals and company
websites has also been used for the purpose of the study.
6.2 Methods of Analysis of Data
The study uses compilation of data through tables and charts and percentage method for
analysis of data. The study uses Case study approach. For the purpose of the study, data has
been collected from 25 rural entrepreneurs engaged both in production and delivering of
services in Tumkur.
7. Data Analysis and Interpretation
3
7.1 Use of Digital Banking Services:
Table 1: Use of Digital Banking Services
Use of Digital Banking Frequency Percentage

Services
YES 25 100
No 0 -
Total 25 100.00
Source: Primary Data
Graph 1: Use of Digital Banking Services
Use of Digital banking Services
25
20
15
10
0
YES No
Interpretation:
The above table and graph indicate the use of Digital Banking services for various operations
in regular business activities by Rural Entrepreneurs of Tumkur. It can be observed that all the
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25 Entrepreneurs under study use Digital Banking Services. It can be observed that all the
entrepreneurs have realized the need for digital banking and are using various digital banking
services for their day to day operations.
7.2 Major Digital Banking services
Table 2: Major Digital Banking Products used by Rural Entrepreneurs
Use of major ICT tools Frequency Percentage

ATM Cards 25 100
Debit Cards 20 80
Credit Cards 5 20
Internet Banking 10 40
NEFT 5 20
RTGS 2 8
Mobile Banking 15 60
Mobile Payment Apps 10 40
Graph 2: Major Digital Banking Products used by Rural Entrepreneurs
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Digital Banking Sevices
Mobile Payment Apps
Mobile Banking
RTGS
NEFT
Internet Banking
Credit Cards
Debit Cards
ATM Cards
0 5 10 15 20 25 30
Interpretation:
The above table and graph identify the major digital banking services used by rural
entrepreneurs and the frequency of using the same. It can be observed that all the entrepreneurs
use ATM services; Debit cards are the second most used service followed by Mobile banking
and Internet banking. The credit card services, NEFT and RTGS are the least used services by
the rural entrepreneurs. The ease of using the services is the main reason for the usage of
services.
7.3 Major Benefits of Digital Banking
Table 3: Benefits of Digital Banking
Major Advantages Response Percentage

Enhances speed of Operations 25 100
Reduces cost of operations 10 40
Enhances efficiency of 10 40
operations
Reduces errors 5 20
24X7 Access 20 80
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Graph 3: Benefits of Digital Banking
Benefits of Digital Banking

Enhances speed of Operations
Reduces cost of operations
Enhances efficiency of operations
Reduces errors
24X7 Access
Interpretation:
The above table and graph identify the major benefits derived by the rural entrepreneurs in
using digital banking services. All the respondents find that the digital banking services
enhance the speed of operations, and majority of the respondents i.e., 80% of them opine that
24X7 access to digital banking services is the second major benefit provided by digital banking.
40% of the respondents opine that digital banking enhances efficiency of operations and leads
to reduction in cost of operations. Only 20% of the respondents opine that digital banking leads
to reduced errors in operations. The respondents find more than one benefit of digital banking
services.
7.4 Factors affecting the use of Digital Banking Services by rural entrepreneurs
Table 4: Factors affecting the use of Digital Banking Services
Factors affecting the use of Response Percentage

Digital Banking Service
Ease of Use 20 80
Cost Factor 15 60
Availability of necessary 15 60
infrastructure
Safety of transactions 15 60
Graph 4: Factors affecting the use of Digital Banking Services
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Factors affecting the use of Digital Banking Services
20
15
10
5
0
Ease of Use Cost Factor Availability of Safety of
necessary transactions
infrastructure
Interpretation:
The above table and graph indicate the major factors affecting the uses of digital banking
services by the rural entrepreneurs. The ‘Ease of use’ is one of the major factors influencing
the use of digital services; the use of these services is also equally affected by the availability
of necessary infrastructure, cost involved and safety of transactions.
7.5 Major Challenges in using Digital Banking Services
Table 5: Major challenges in using Digital Banking Services
Major Challenges Frequency Percentage

Lack of knowledge about various 20 80
digital products
Lack of Technical knowledge to 22 88
use digital banking products
Lack of necessary infrastructure 15 60
Security challenges 25 100
Graph 5: Major challenges in using digital banking services
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Challenges in using digial banking services
Security challenges
Lack of necessary infrastructure
Lack of Technical knowledge to use digital…
Lack of knowledge about various digital…
0 5 10 15 20 25
Interpretation:
The above table and graph identify the major challenges faced by the rural entrepreneurs in
using digital banking services. All the respondents find the security issues to be the major
challenge in using digital services. 88% of the respondents find it difficult to use digital banking
products, 80% of the respondents are not aware of the available digital services and 60% of the
respondents opine that they face lack of necessary infrastructure to access digital banking
services. The respondents find more than one challenges in using digital banking services.
8. Findings of the Study

i. All the respondents find the need of digital banking services and use them in their day-
to- day business operations.
ii. ATM is the most used digital banking service, followed by use of Debit cards, mobile
banking and internet banking.
iii. NEFT and RTGS are the least used digital banking services.
iv. Ease of use and the lower costs are the most important factors affecting the use of digital
banking services.
v. Enhanced speed of operations and the 24X7 access are the main benefits the rural
entrepreneurs get from the use of digital banking services.
vi. Security issues and lack of knowledge of using the services are the major challenges
faced by the entrepreneurs in using the digital banking services.
9. Conclusion
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There is no doubt that the digital banking has enhanced the banking penetration among the
rural customers particularly among the rural entrepreneurs. The entrepreneurs are deriving a
number of benefits from digital banking. It is the ease of usage that acts as a major factor
influencing the rural entrepreneurs to access digital banking services. However, the
entrepreneurs face numerous challenges in using the digital services. The banks need to create
greater awareness about their services and educate the users on the methods to use the same
and install necessary infrastructure to enable the rural entrepreneurs to access the digital
banking services.
References:
1. Anuradha Sarkar & Vinod Lalbeg (2012), Role of Information Technology in SME,
retrieved from,http://www.nevillewadia.com/images/Cronicle2012/Prof.Anuradha-
Sarkar12.pdf
2. Asta Tarute & Rimantas Gatautis (2013), ICT Impact on SMEs Performance, Procedia-
Social and Behavioral Sciences 110(2014) 1228-1235.
3. Conole, G. (2012). ICT and general administration in educational institutions, retrieved
from, https://issuu.com/iite/docs/ict_and_general_administration
4. Mohamad Ibrahim (2010),“Performance Monitoring in SME Sector”, The Management
Accountant, May 2010.
5. MSME at a Glance, GOI, Ministry of Micro, Small and Medium Enterprises
6. Poornima M Charthimath (2009), “Entrepreneurship Development Small Business

Enterprises”, 5/e (2009), Person Education, New Delhi.
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INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW

ISSN:2321-0346 - ONLINE ISSN:2347-1670 - PRINT -IMPACT FACTOR :6.613

DIGITAL BANKING PRACTICES AMONG RURAL ENTREPRENEURS – A CASE

Key Words: Digital Banking, Rural Entrepreneurs, Working Capital

The emergence of innovative financial technology has revolutionized financial services in

2. Statement of the Problem

4. Objectives of the Study

 To study the awareness of digital banking services among rural

 To identify the digital banking services most used by rural entrepreneurs.

5. Scope of the Study

6.1 Sources of Data

6.2 Methods of Analysis of Data

7. Data Analysis and Interpretation

7.1 Use of Digital Banking Services:

Table 1: Use of Digital Banking Services

Use of Digital Banking Frequency Percentage

Graph 1: Use of Digital Banking Services

Use of Digital banking Services

Source: Primary Data

7.2 Major Digital Banking services

Table 2: Major Digital Banking Products used by Rural Entrepreneurs

Use of major ICT tools Frequency Percentage

Graph 2: Major Digital Banking Products used by Rural Entrepreneurs

Digital Banking Sevices

Mobile Payment Apps

7.3 Major Benefits of Digital Banking

Table 3: Benefits of Digital Banking

Major Advantages Response Percentage

Graph 3: Benefits of Digital Banking

Benefits of Digital Banking

Table 4: Factors affecting the use of Digital Banking Services

Factors affecting the use of Response Percentage

Graph 4: Factors affecting the use of Digital Banking Services

Factors affecting the use of Digital Banking Services

7.5 Major Challenges in using Digital Banking Services

Table 5: Major challenges in using Digital Banking Services

Major Challenges Frequency Percentage

Graph 5: Major challenges in using digital banking services

Challenges in using digial banking services

Lack of necessary infrastructure

Lack of Technical knowledge to use digital…

Lack of knowledge about various digital…

8. Findings of the Study

5. MSME at a Glance, GOI, Ministry of Micro, Small and Medium Enterprises

6. Poornima M Charthimath (2009), “Entrepreneurship Development Small Business

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