Analysis of the Level of Financial Literacy and Financial Inclusion among Rural Households in Krishna District: Andhra Pradesh

Abstract

Literacy is the base and primary step for financial inclusion. It provides knowledge on merits and demerits of financial products and services, based on that an individual can select the right product which suits his/her needs. In the words of Shri Pranab Mukherjee, (2013) financial literacy refers Financial literacy and education plays a vital role in financial inclusion, inclusive growth and sustainable prosperity. It ensures that financial services are to be reached to weaker sections or unreached sections of the society. All the initiatives should aim at achieving financial inclusion through financial literacy. For improving awareness of financial literacy, several schemes were implemented by the Reserve Banking of India, the Security and Exchange Board of India, Insurance Regulatory Development Authority, Pension Fund Regulatory and Development Authority (PFRADA). These bodies are engaged in various financial education programs in improving financial literacy thereby achieving financial inclusion. Various strategies are also being implemented for the improvement of financial literacy in India. These include introducing financial education in school curriculums especially government schools in rural areas, and financial-literacy training programs set up by commercial banks in urban and semi-urban areas. Village adoption programs were also established by educational institutions in rural areas. There is a strong concern for banks to arrange regular campaign through media and road shows to spread awareness about financial inclusion and financial literacy. The main objective of this study is to know the level of financial literacyamong rural households in Krishna District, Andhra Pradesh and banking penetration in selected mandals.