Self Help Group Bank Linkage Programme- An Index of Measuring Financial Inclusion

Abstract

Background/Objectives: In India the largest population falls under rural category. People from rural areas have experiences several issues for getting banking services to meet their basic requirements. To manage these challenges Self Help Group were formed consisting of 10 to 20 members in a group with a very low income and residing in unreached segments in our society. The major objective for forming the group is to get an access on financial services at an affordable cost. The members existing in these groups save their money which is utilized for loans. Even if there are several ways to fulfill the objectives of financial inclusion, Self Help Group Bank Linkage Programme is named to be an esteemed platform to meet the expectations of banking services among poor people. Therefore this paper has done an investigation on facilitating banking services to the poor people from the members of self help groups in the various districts of Tamil Nadu, India. Methodology: The study has measured an Index of Financial Inclusion using Multidimensional approach by considering three different dimensions such as Bank Penetration, Credit Penetration and Penetration of Self Help Groups in various districts of Tamil Nadu. Findings: The Districts were ranked based on the Index Scores generated through various parameters and the level of financial inclusion among various districts has been highlighted in the study. Novelty: When considering the banking services facilitated to Self Help Groups many districts in Tamil Nadu have very low level of financial inclusion. Out of all the models designed by our government, Self Help Group Bank Linkage Model is said to be the Successful model which are acceptable by the poor people. Therefore to revamp the status of financial inclusion, the Government of India and concern banking authorities should consider the members of self help groups for obtaining credit facilities in order to satisfy their basic requirements.