The study on the customer perception index regarding the digitalization of microfinance was conducted during 2020–21, aligning with the peak of the COVID-19 pandemic. The instrument for the study was a pretested structure questionnaire developed for the purpose. The study was conducted with a sample of 500 customers from Kottayam. This location was chosen as it holds the distinction of being the first district in the country to achieve a cent percent literacy. Seven factors considered in the study included perceived use, perceived ease of use, perceived risk, perceived trust and faith, self-efficacy, attitude, and anxiety. Except for self-efficacy, the remaining six factors were validated through exploratory factor analysis. Based on confirmatory factor analysis, 43 statements related to these six factors were selected to assess the perception index. The index was calculated using a formula developed for the purpose and the index derived in the study was 80.3 which also revealed that the statements and factors used in the study were more than appropriate. The study reports, for the first time, the perception index of microfinance customers, which holds immense practical relevance, as these customers belong to the chronically poor. The concept of microfinance itself is built on mutual relationships, trust and faith. The study brings to the fore the major influencing factors and the key directive principles that need to be reckoned by both the management and policymakers.