India, July 08: For over a decade, India‘s financial inclusion story has been measured in accounts opened and cards issued. The next chapter has to be measured differently, according to PwC India‘s survey in partnership with Dvara Research Foundation, titled ‘Rethinking financial health for meaningful impact.‘ The survey, which covers 4,000 households across 18 districts in seven states, analyses the findings of the Financial Health Survey (FHS) — a baseline diagnostic of household financial well-being across India‘s underserved ‘Bharat’ segment.
Financial health, as defined in the report, is a state where households have enough financial security to meet current needs, plan for the future, and handle financial shocks with confidence. It goes beyond traditional access and usage metrics to capture whether financial products are genuinely improving lived outcomes — resilience, confidence, and the ability to absorb income volatility.
The FHS adopts an input–output–outcome framework, where inputs track access to products and touchpoints, outputs capture how households use and engage with these options, and outcomes measure whether they can meet needs, absorb shocks, and plan ahead with confidence. This approach is aligned with the RBI’s National Strategy for Financial Inclusion (2025–30), which itself marks a shift from counting accounts to tracking whether finance actually improves financial security and resilience.
Vivek Belgavi, Partner and Leader, Financial Services Advisory, PwC India, said: “India‘s financial services ecosystem has made remarkable progress in expanding access. The next frontier is financial health. That means designing products around real household cash flows, combining digital scale with human support, and measuring success through resilience, meaningful usage, and long-term customer outcomes.”
Income volatility is the single biggest drag on financial health. Products built around fixed monthly salaries — rigid EMIs, RDs, annual premiums — structurally penalise the majority of the Bharat segment. The renter–homeowner divide is stark. 65% of renters in the East cannot mobilise ₹30,000 for an emergency, leaving this growing urban segment one shock away from distress.
Misha Sharma, Lead, Dvara Research, said: “India‘s inclusion story has delivered dramatic expansion in account ownership and credit, yet high rates of dormant accounts and the ongoing NPA stress in microfinance show that product ownership has not reliably translated into suitable use or improved financial lives. The FHS is our contribution to shifting the operative goal from financial inclusion to financial health — equipping providers and policymakers with the adaptive capacity to respond to customers’ actual experiences of financial products.”
Key insights from the report:
- Phygital wins over digital-only: Across all regions, households with access to both physical and digital channels show the highest usage and outcome scores. Digital channels drive enrolment; human touchpoints sustain engagement and trust.
- Informal finance complements formal finance sources: Households using both formal and informal sources often show deeper formal engagement; informal channels are an integral part of the customer’s financial world.
- 37% of households in the East have never sought financial advice, 23% sought but did not receive it, and 78% of informal loans come from a single source — creating high concentration risk. 53% say ‘don’t know’ when asked about risky asset usage frequency.
- The West shows a sharp activation gap. Digital financial services (DFS) acceptance exceeds 95%, yet 65% of formal credit users report having faced denial at some point, and newer customers have the highest access scores but the lowest usage scores.
- The South is network-driven. 44% of advice comes from third-party providers and 40% from social networks; formal financial services providers (FSPs) provide only 13%. DFS multi–service adoption exceeds 70%.
- The North faces self-exclusion and rural infrastructure gaps. 40% lack physical access within walking distance, and newer customers show low trust and convert poorly from access to engagement; DFS acceptance is the lowest of all regions at 75.67%.
The findings carry a direct message for financial service providers: account openings and digital onboarding are necessary but no longer sufficient. FSPs must redesign credit, savings, and insurance products around irregular cash flows, pair digital channels with trusted human touchpoints, and measure success through resilience and lived outcomes — not just transaction volumes. Those that do will be best positioned to serve India‘s largest underserved market while meeting emerging regulatory expectations.