The rapid expansion of financial technology (FinTech) in India is making it imperative for micro women entrepreneurs in India to access digital financial services. In this digital era, digital financial literacy has become an essential skill for women micro-entrepreneurs to effectively use online banking, digital payments, and digital lending platforms. It enables them to evaluate various digital financial products, improve credit scores, and access formal sources of finance more efficiently. However, limited digital financial literacy levels remain a major demand-side barrier restricting many women entrepreneurs from obtaining credit through formal and alternative financial channels. To address this challenge, the Government of India and financial institutions have introduced several initiatives. The increasing adoption of the Unified Payments Interface (UPI) by women micro entrepreneurs is evidence of enhanced women’s participation in digital financial transactions. Despite this progress, traditional credit assessment methods used by formal financial institutions continue to create a supply-side structural barrier for access to formal finance. Many women-owned micro enterprises lack collateral, formal financial records, and credit histories. In this context, lending institutions should use alternative credit assessment techniques based on digital transaction behavior and digital footprints. The emergence of the Unified Lending Interface (ULI) is further expected to strengthen seamless and transparent digital lending in India. The study highlights that the integration of digital financial literacy and alternative credit assessment mechanisms can play a crucial role in enhancing credit flow, promoting financial inclusion, and empowering Indian women micro-entrepreneurs economically.