Factors Influencing Fintech Adoption Among Rural Households in Bengaluru: Evidence from Exploratory Factor Analysis

Financial technology (fintech) is universally promoted as a tool for delivering affordable, easy banking to the under-banked, but in reality usage among Indian rural households has been variable. This paper investigates the underlying factors influencing the adoption of fintech among Karnataka's rural households (Bengaluru Rural and peripheries of Bengaluru Urban district). A structured questionnaire, adapted from established technology-acceptance system variables, was circulated among 800 household heads/primary financial decision-makers of a representative sample of rural households selected through multi-stage stratified random sampling across 4 taluks. Exploratory factor analysis (using principal component extraction with varimax rotations) was performed to synthesize 24 observed variables into a smaller number of latent dimensions. The KaiserMeyerOlkin and Bartlett's test of sphericity indicated the sample size was adequate for factor analysis; six factors were extracted, which jointly explained a significant proportion of the individual variance in the data, and related to perceived usefulness, perceived ease of use, trust and perceived risk, social influence, financial literacy and awareness, and facilitating conditions/digital infrastructure. The paper develops the applicability of Technology Acceptance Model and the Unified Theory of Acceptance and Use of Technology to rural Indian populations, and gives recommendations for fintech service providers, banking correspondents, and government agencies interested in deepening digital financial inclusion in peri-urban and rural Karnataka.