Exploring the Nexus of Digital Financial Literacy and Financial Inclusion: A Critical Review and Conceptual Framework

Purpose: As digital transformation reshapes the global financial architecture, the "human" element of technology adoption—Digital Financial Literacy (DFL)—has emerged as a critical determinant of sustainable financial inclusion (FI). This paper critically reviews the extant literature (2011–2025) to deconstruct the relationship between DFL, trust, and self-efficacy in the context of developing economies like India.

Design/Methodology: A thematic review of empirical and conceptual studies was conducted to identify structural patterns, mediating variables, and theoretical gaps. The review specifically analyses the "access-usage gap" in Punjab, a region characterized by high agrarian wealth but uneven digital proficiency.

Findings: The synthesis reveals that DFL is not a monolithic construct but a dynamic capability moderated by demographic variables (age, gender) and mediated by psychological factors (trust in FinTech). The review identifies a critical research gap: while 'access' to digital finance is well-documented, the behavioural impact of DFL on 'active usage' remains under-theorized in rural contexts.

Originality/Value: The paper proposes an integrated

"DFL-Inclusion Capability Model," positioning DFL as a necessary antecedent to economic resilience. It offers actionable policy frameworks for bridging the digital divide in transition economies.