A study on Financial Inclusion for Rural Development in India with reference to Tourism Sectors

Abstract

Financial inclusion has been recognized as being a critical means of poverty reduction amongst underprivileged persons living in rural India and a way of providing them with inexpensive and ready access to financial services as well. However, despite a plethora of financial inclusion schemes, the fact is that large numbers of people in rural areas are not benefited by them. The aim of this research was to examine the causes of the failure of financial inclusion schemes in India and to identify what needs to be done to give impetus to financial inclusion initiatives in the country. 100 rural folks were interviewed and the primary data was analysed. It was found that apathetic implementation of schemes, lack of awareness, disbursed funds being used for non – developmental / personal purposes and a lack of adequate distribution of banking facilities are the main reasons for limited success of financial inclusion schemes. The respondents indicated that there is an urgent need to diversify financial product offerings to beyond the current loan-based schemes. Similarly, the distribution networks and the modes of disbursement of financial inclusion schemes need to be urgently broadened. Technology plays a vital role in facilitating financial inclusion and the respondents have indicated several ways in which this may be done. Promoting financial literacy and ensuring safety and security of technology based financial instruments are other ways of facilitating financial inclusion. Perhaps the biggest stimulator of financial inclusion is the promotion of rural tourism as this provides the village people with a continuous and stable source of income in addition to agriculture. Finally, it may be noted that financial inclusion is not just providing village people with a wide range of financial services but providing them with the understanding of what these services are, how these products may be leveraged, with guidance and counselling on money management and awareness of the existence of these schemes and facilities as well.