Background: Recently, an integrated microfinance and health literacy (IMFHL) program promoted birth preparedness and complication readiness (BPCR) among women to reduce delays in seeking care in India. We evaluated the effect of the IMFHL program on women’s BPCR practice in one of India’s poorest and most populated state-Uttar Pradesh. Method: Using secondary data, we analysed secondary information of17,244 women across member and non-member households collected in two cross-sectional surveys (2015 and 2017) from 70 blocks in rural Uttar Pradesh, India. We performed multiple logistic regressions to estimate IMFHL program’s effects on maternal BPCR practice among members adjusting for individual, household and community-level variables. We also investigated the diffusion of BPCR from program members receiving the health literacy intervention to non-members in villages. Findings: Program membership is positively associated with BPCR practice with higher odds (odds ratio [OR] = 1·17, 95% CI:1.07-1.29,p <0·01) compared to women in non-program villages. Furthermore, the odds of practising complete BPCR increases by almost 50 per cent when a maternal health literacy component is added to the microfinance program (odds ratio [OR] = 1·48, 95% CI:1 35-1·65,p <0·1). A diffusion effect was found for BPCR practice from members to non-members only when an added health literacy component was integrated within the microfinance platform. Conclusion: This study shows that the program exerted both a health dissemination effect within members, and facilitated a diffusion effect of health behaviour transfer from members to non-members when a health literacy component is added.