Credit Penetration Research Articles

‘‘An Analysis Of Financial Inclusion Status In Greater Noida, Uttar Pradesh”

In an economy like India which is expanding rapidly, the business environment needs to be transformed and increase the access of financial services to the lowest level of the society. The aim of this study is to analyze the financial literacy levels and status of financial inclusion in Greater Noida district of Uttar Pradesh. Financial inclusion can be measured based on three tangible and critical dimensions viz. Branch Penetration, Credit Penetration and Deposit Penetration. Research Paper aimed to analyze these dimensions and also assess the government's financial inclusion initiatives and the financial services offered by commercial banks.Research was done through studying literature review and analyzing the data collected from the various group of residents of Greater Noida. Study revealed that there is a significant disparity in consumers' perceptions of how satisfied they are with government schemes and financial services, which prevents financial inclusion from reaching its full potential. The higher economic level group, which is also more educated than the lower economic level group, finds it easier to open bank accounts as well as access other services, indicating that financial inclusion is significantly influenced by both economic status and educational attainment. Several suggestions are also made for improving the integration of commercial banks' financial services and financial inclusion initiatives

Exploring financial inclusion in MENA countries: an entropy weight approach

PurposeResearch on financial inclusion (FI) in Islamic countries has evolved and gained prominence. This study aims to construct an extensive multidimensional FI index to ascertain the level of inclusion and trends in the Middle East/North Africa (MENA) countries. Additionally, this study examines the potential role of Islamic finance in improving access to financial services.Design/methodology/approachData for the study were collected from databases covering MENA countries for the period 2010–2020. An inclusion index has been constructed using the entropy method.FindingsKey findings indicate that the overall FI has improved in Islamic countries. However, it should be noted that all MENA countries fall within the low or medium levels of the inclusion index. It was observed that insurance access and penetration savings were poor in the Islamic MENA countries.Social implicationsThe authors recommend that policymakers focus on insurance access and saving behaviour in their respective countries. Based upon these observations, policymakers should promote the economic benefits of Islamic finance, which will help improve FI and economic development in Islamic countries. This study emphasises the necessity of policy framework reform to provide Islamic financial services to the poorest in society at low or no cost for better economic benefits.Originality/valueMost studies tend to overlook important indicators such as insurance, savings and credit penetration while calculating the index. These indicators add value to the existing literature. The majority of prior studies used United Nation Development Programme methodology or principal component analysis for Inclusion Index measurements. The adoption of the entropy weighting method is the novelty of this study.

FINANCIAL INCLUSION IMPLICATIONS ON THE LIQUIDITY OF THE NIGERIAN CAPITAL MARKET

The objective of this study was to examine the implications of financial inclusion on capital market liquidity in Nigeria. Therefore, we applied Vector Autoregression (VAR) technique to the analysis of the quarterly time series data obtained from Central Bank of Nigeria’s statistical bulletin and World Development Indicators for the period, 2008Q1 to 2018Q4. Findings of this study reveal that deposit penetration, bank penetration and credit penetration have positive but non-significant impact on stock market turnover ratio in Nigeria. Furthermore, unlike deposit penetration which exerts negative and non-significant influence on the value of shares traded ratio; bank penetration and credit penetration have positive but non-significant impact on the value of shares traded ratio in Nigeria. The study posits that financial inclusion exerts no significant influence/implications on stock market liquidity in Nigeria with a very negligible variation in the latter (stock market liquidity) explained by the former (financial inclusion). It is therefore recommended that accounts and bank penetrations should be re-engineered towards their translations to high volume and value of capital market transactions rather than mere financial penetration without any capital market implications in Nigeria.

RETRACTED: The construction of enterprise's financial supply chain management under blockchain technology

AbstractThis paper uses the advantages of blockchain technology to help construction enterprises obtain low‐interest bank loans, effectively reduce financing costs, thus improving the level of financial supply chain, innovating financial management (FM) of construction enterprises, solving the FM transformation problem of construction enterprises and promoting the sustainable development of construction enterprises, and thus doing the following work. First, this paper describes the concept and characteristics of BT and the motivation of FM of construction enterprises to use BT. Second, it analyses BT's three main application advantages in construction enterprise financing: reducing financial risks, improving the credit penetration of core enterprises, and reducing financing costs. Meanwhile, this paper summarizes the problems that should be paid attention to in implementing the current financial supply chain management strategy in enterprises. It provides a solid theoretical foundation for the research of FM transformation in construction enterprises. Finally, the overall design and functional analysis of the BT FM platform are carried out. The functions of the BT FM platform are divided into four modules: system management, credit management, contract management, and information management. Besides, their specific business processes are analysed. The research results show that BT is applicable in enterprises, and the value of each participant's financing platform can be clearly defined from the construction of BT‐based financing platform. The income quota of the owner's individual operation is 33%, and the income quota of the tripartite cooperation is also 33%, which further illustrates the effectiveness of the financial financing model of construction enterprises based on BT and the feasibility of its actual implementation in the future. In this paper, the related issues of financial supply chain management are systematically and comprehensively summarized, which has theoretical guiding significance for the research of FM transformation of construction enterprises based on BT.

Estimating farmers' intention towards institutional credit adoption by using extended theory of planned behavior

AbstractThe role of socio‐psychological factors on farmers' institutional credit adoption intention is rarely studied in the context of developing nations. This study estimates the direct and mediating association of various socio‐psychological factors with farmers' institutional credit adoption intention. An extended theory of planned behavior (TPB) was adopted and empirically tested using the cross‐sectional data from 384 farmers from West Bengal. The study used structural equation model for the mediation analysis. Results showed that primary TPB constructs like attitude, subjective norm, and perceived behavioral control were positively and significantly associated with the intention of institutional credit adoption. Besides direct effect, the primary TPB constructs mediated the relationship between institutional credit adoption intention and other explanatory constructs used in this study. Findings predicted a positive partial mediation between trusted information sources, formal education level, coping appraisal, risk perception, and farmers' formal credit borrowing intention. Risk perception displayed a direct and mediated, however, negative, association with farmers' institutional credit adoption intention. These findings provide a clear understanding of factors predicting farmers' intention to adopt institutional credit and comprehensive insight into establishing policies for effective institutional lending at the ground level. The study delivers a paramount scientific perspective to the policymaker of developing countries suffering from insufficient institutional credit penetration in the farming community to design practicable frameworks and incentivize policies to motivate farmers in institutional credit borrowing.

Exploring Dimensions of Financial Inclusion from Stakeholders' Perspectives: Evidence from Rural Areas of Jammu District

Reserve Bank of India devised initiatives to provide affordable and easy financial services to not only the privileged ones but also to the ignored and neglected sections of our society. Regardless of their personal net worth or the size of their organization, all individuals and organizations should be able to access and afford financial products and services according to the determinants of financial inclusion. Financial penetration is a relative small term which is used to represent the share of one credit agency relative to that of others in the credit market. In other words we can say that financial penetration is expressed in terms of loans availed by the household from different sources of credit institutions and non-institutional financial sources. As the union territory of Jammu and Kashmir comprises of different topographic and demographic regions, which include the plains, mountainous and snow-bound areas, the financial facilities are not evenly distributed all over the geographical areas of the union territory of Jammu and Kashmir. This study is confined to territorial areas of district Jammu. Many isolated villages struggle to meet their basic financial demands as a result of the lack of banking facilities. Following this scenario, to ascertain financial inclusion level of the region, a study was done using three different perspectives, including credit penetration, deposit penetration and branch penetration in remote regions of all blocks of district Jammu in the UT of Jammu and Kashmir.

Финансово-экономические стратегии тувинских семей (по материалам социологических исследований)

The article analyzes the financial and economic strategies of modern Tuvan families based on the materials of sociological studies conducted in the Republic of Tuva in 2019 and 2021. The features of the credit and savings behavior of the surveyed population in the context of different socio-demographic groups were studied using, among other things, statistical data on income, debt burden of the population. The reason for the high level of credit penetration into the practice of modern Tuvan families is not only an insufficient level of financial literacy and a culture of savings, but also objective monetary poverty. The article shows that the high level of demographic burden in the republic does not contribute to the development of savings and savings strategies. Based on the results of the analysis, the author concludes that the actual poverty of the population will grow unless a special policy is realized to develop the regional economy, as well as to increase financial literacy and a culture of savings among the population of the republic.

EFFECT OF VALUE ADDED TAX ON CENTRAL BANK OF NIGERIA’S FINANCIAL INCLUSION STRATEGY

Although financial inclusion in Nigeria has progressed significantly, the country still lags behind other peer-level countries in many of the indicators of inclusion. Credit penetration as an index of financial inclusion is worse in Nigeria compared to other peer countries. Value-Added Tax (VAT) is an indirect tax with an Impressive performance in price stability and economic growth in all countries where it has been introduced. This study evaluated the effect of VAT on Central Bank of Nigeria's financial inclusion strategy, specifically concerning payment attitude, point of sale (POS) use, and attitude to save. The study adopted a descriptive research design, a nonprobability judgment sample of 140 participants extracted from customers of 5 deposit money banks in JOS north local government of Plateau state who responded to a re-validated 5 points Likert scale questionnaire. Data were analyzed using quantitative techniques of spearman ranking correlation with aid of SPSSv25 to test the hypotheses. Results of statistical data analyses showed that VAT Scheme has a significant effect on payment attitude; VAT scheme has a significant effect on POS use, and VAT scheme has a significant effect on attitude to save in the Nigerian banking industry. The study concluded that a probable cause of the statistically significant positive relationships is the efficient provision of financial services despite the VAT charged. The study recommended that needed infrastructure should be put in place for the achievement of the Central bank of Nigeria’s financial inclusion strategy. Security measures should be put in place to further safeguard financial inclusion channels, and awareness should be created among citizens, groups, and associations on the inherent benefits of financial inclusion.

Financial Inclusion and Youth Agriculture Involvement in Tanzania: A Case of Misenyi District, Kagera Region.

The paper investigated the effects of financial inclusion on youth agriculture involvement in Tanzania. Specifically the study was conducted in Kagera region, Misenyi district with the specific objectives of examining the effects of branch penetration, credit penetration, deposit penetration, interest rate and finding out the effects of education on financial service usage and youth agriculture involvement. The study was supported by the institution theory. Data were collected using questionnaires and they were analysed using linear regression with the helpof SPSS software. Descriptive statistics, pairwise correlation and regression analysis was used to present the findings and the results indicated that a huge level of financial inclusion is needed to achieve a sizable effect on agricultural involvement. This is due to the minimal effect magnitudes on the dependent variable resulting from financial inclusion variables. Financial inclusion and agricultural involvement policies need to consider women and middle-aged individuals, deposit penetration need to be explored and credit penetration need to be extended to maximize its effects on agricultural involvement.

Microfinance institutions and credit penetration: An analysis on Odisha

Purpose: In recent times, the Indian microfinance industry is one of the fastest growing sectors for the development of Indian economy. Basically, the Microfinance Institutions (MFIs) are concentrated only in some specific regions of the country. Using data on MFI penetration and demographic, socioeconomic and historical determinants, this article examines possible explanations for the high concentration of MFIs in the state of Odisha, India.

An Estimation of the Magnitude and Spatial Distribution of Usury Lending

In parallel with financial deepening, attention is increasingly being paid to the segment of the population that is not involved in formal financial intermediation. Some of these households typically have poor income situations, and therefore, due to their low creditworthiness, their demand for credit remains unmet. In our study, for the first time in the Hungarian academic literature, we attempt to estimate the magnitude of the spread of usury lending. Domestic responses to the Eurostat Survey on Income and Living Conditions were used to determine the order-of-magnitude of vulnerable, and thus potentially affected households. Based on our results, the proportion of Hungarian households that – due to their financial and housing conditions – are so vulnerable that they may be exposed, at least on an ad-hoc basis, to the risk of usury lending, can be estimated at between 3 and 13 per cent. In order to identify areas where usury lending is believed to be rife in the local community, we used as a basis the intersection of settlements lagging behind due to their economic-housing underdevelopment and districts with low (formal) credit penetration, based on the aggregate data from the Hungarian Central Statistical Office and the Central Bank of Hungary. The areas most affected by usury lending may be the country border settlements in Borsod- Abauj-Zemplen, Szabolcs-Szatmar-Bereg and Hajdu-Bihar counties. This result is also supported by the regional distribution of available official statistics on criminal usury.

Unearthing Digital Financial Services and Financial Inclusion: An Empirical Evidence from India

The present study aims at determining the role of ICT (Information and Communication Technologies), macroeconomic and demographic characteristics of individuals in advancing financial inclusion levels in India. Financial inclusion has been proxied by credit penetration, account ownership and digital financial services by key digital modes (i.e. mobile cellular subscriptions and internet penetration). The secondary data have empirically been analyzed by using ordinary least squares estimation at the macro-level and employing logistic regression at the micro-level. The findings suggest that internet usage and mobile penetration rates have a positive association with financial inclusion in India. The study further discovers that individual characteristics and economic circumstances like education level, income level, age, gender, government transfers and saving behavior are also likely to impact financial inclusion indicators in India. Unearthing a perfect balance between adopting an inclusive financial approach, pro- poor growth, and a technologically advanced infrastructure is indispensable for each facet that has an important role to contribute. Finally, the study recommends that such moves are not an end in themselves rather expected to shoulder the responsibility of creating new economic order in India via financial inclusion toolbox through sustainable development goals (SDGs).

Evaluation of Financial Inclusion Index for accessing Banking Technology through Rural Population from the States of India

Reserve bank of India has described the term Financial Inclusion as the sequence of activities that has taken place in proving financial services to the most vulnerable people in country at a very low affordable cost. The financial services like assess to financial products such as small deposits and savings, providing basic credit requirements through formal financial institutions like post offices, banks, microfinance institutions and banks. Rural people faces may issues and challenges in using financial products and services to meet their basic needs. Hence this research study has done an analysis to evaluate index of financial inclusion for various states of India with four different types of dimensions like Penetration of Bank Branches in rural areas, Credit Penetration, Deposit and Penetration of Insurance Companies in the rural regions of all the states of India. Different resources namely the website of Reserve Bank of India, Census 2011 data, articles and journals has been utilized to gather the secondary data for the study. The dimensions such as deposit, credit, insurance company penetration and bank branch penetration in rural areas of different states of India has been measured by accessing multidimensional approach to examine financial inclusion index 2018. From the research study, it is found that the states Puducherry, Daman & Diu, Chandigarh and Goa has Financial Inclusion at below average level (between 35-50) and the remaining states in India has financial inclusion at very low level in rural areas (Below 35).As concerned with rural population many states in India has financial inclusion at below average and lower level. The concern authorities from Indian Government should examine those states that are highly eliminated from accessing banking services to restructure the position of financial inclusion

Unearthing Digital Financial Services and Financial Inclusion: An Empirical Evidence from India

The present study aims at determining the role of information and communication technologies (ICTs), macroeconomic and demographic characteristics of individuals in advancing financial inclusion levels in India. Financial inclusion has been proxied by credit penetration, account ownership and digital financial services by key digital modes (i.e., mobile cellular subscriptions and internet penetration). The secondary data have empirically been analysed by using ordinary least squares estimation at the macro-level and employing logistic regression at the micro-level. The findings suggest that internet usage and mobile penetration rates have a positive association with financial inclusion in India. The study further discovers that individual characteristics and economic circumstances like education level, income level, age, gender, government transfers and saving behaviour are also likely to impact financial inclusion indicators in India. Unearthing a perfect balance between adopting an inclusive financial approach, pro-poor growth, and a technologically advanced infrastructure is indispensable for each facet that has an important role to contribute. Finally, the study recommends that such moves are not an end in themselves, rather expected to shoulder the responsibility of creating new economic order in India via financial inclusion toolbox through sustainable development goals (SDGs).

A Study on Regional Disparity of Bank Performance towards Financial Inclusion

Financial inclusion plays an important role towards development of the nation. Over the years, from regional levels to World Banks all are taking initiatives to bring the unbanked population into banking net to fulfill the target of financial inclusion. In regular intervals, regulators are giving direction to banks and financial institutions toward expansion of banking services. As per the global statistics and national level data, a large percentage of the population still excluded from banking services. In this situation the present study looks into the regional disparity in financial inclusion, assessing bank performance across regions in regard to the expansion of banking coverage. The researchers apply ANOVA test with variables of bank branch penetration, deposit penetration and credit penetration to investigate disparity between regions. The research also measures the trend of growth of the selected variables by using trend equation. The period of study is 6 years from 2012–2013 to 2017–2018. The empirical results find that there is a regional disparity between regions and banks are not performing equally in all the regions in India. Among the regions, north-eastern region followed by northern region is far away in achieving expansion of banking services. The results also find higher growth trend in north-eastern region due to low banking penetration. In India bank-led model for financial inclusion has been emphasized. Hence, expansion of bank branch is essential for long-term sustainability of banking business and to reach a large number of excluded people with banking services.

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

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.

Dimensions for Measuring Financial Inclusion in the Rural Areas of Tamil Nadu

Background/Objectives: The Reserve Bank of India (RBI) has stated that financial inclusion is a process of delivering financial services at a reasonable cost to the people especially from the most down sided sections in the society. The financial services such as timely credit facilities and accessing financial products like small saving deposits reach the rural people easily by the formal financial institutions such as banking industries. Due to the non-availability of banking facilities, people from remote villages face several hindrances to meet their basic necessities. Therefore this paper has done an investigation to measure the level of financial inclusion with the three different dimensions such as Branch Penetration of Banking Industries, Deposit Penetration and Credit Penetration in the rural areas of all the districts in the state of Tamil Nadu. Methods/Statistical Analysis: Secondary data has been collected from various resources such as web sites of Reserve Bank of India (RBI), State Level Banker's Committee (SLBC) Tamil Nadu, articles and Journals. The dimensions such as Branch Penetration, Credit Penetration and Deposit Penetration in the rural areas of all the districts in Tamil Nadu have been measured using the multidimensional approach to calculate the index of financial inclusion. Findings: Ariyalur District has achieved 64.79 IFI that is, the maximum score of financial inclusion in the rural areas by the year 2015. The district Perambalur has higher (>55) level of financial inclusion. The Districts Sivaganga, Nagapattinam and Pudukottai have above average (between 40.0 to 55) level of financial inclusion. The districts Tiruvarur, Karur, Krishnagiri, Ramanathapuram, Dharmapuri, Thanjavur, Cuddalore, Nammakal, Tuticorin and Villupuram have financial inclusion in rural areas with below average level. And the rest of the districts have very low level of financial inclusion. Application/Improvement: Many districts of Tamil Nadu have very low level of financial inclusion in the rural areas. The Government of India and concern authorities should consider those districts which are excluded from receiving financial services to revamp the status of financial inclusion.

Determinants of Micro Enterprise Owners’ Loyalty towards Their Favourite Banks

Banking is a service that lies in a very competitive industry in most developed and developing countries, with different brands competing in a scenario of increasing banking and credit penetration. In a business-to-professional setting for banking, the range of services that a client uses with a bank is very high compared to retail banking. Thus, this paper would like to examine the loyalty of the micro-enterprise owners towards their favourite banks. Using both local and international banks in Malaysia as the focus of the study, an exploratory research was carried out to assess micro-enterprise owners’ level of loyalty to their banks. Self-administered questionnaires were collected from 356 banks’ business customers of various conventional and Islamic banks. The findings from this research have shown that a bank's reputation, quality services as well as customer relationship have a direct relationship to micro-enterprise owners’ loyalty. The micro-enterprise owners believed that as long as the bank provides good services, a good income is being generated through them with the security factor taken into consideration. This study's findings could provide important directions for the development of a holistic framework to explain the formation and structure of micro-enterprise owners’ loyalty towards banking and financial services industries.

State Wise Analysis of Financial Inclusion Measures by Scheduled Commercial Banks in India

Various schemes have been launched to make the basic financial services accessible to those who are in maximum need of these. In a diverse country like India, there is lack of literature to identify how these measures have affected the people. The paper uses parameters of deposit and credit penetration to see how the people in all the states have been influenced by financial inclusion measures. The credit penetration has been judged via percentage of population having access to small borrowers advances, agricultural advances and overall access to credit, whereas the deposit penetration has been measured percentage of population having access to saving banks accounts CRISIL INCLUSIX, a financial inclusion indicator by CRISIL forms the basis of study which measures the trend over 6 years from 2008–2013. Southern states emerge as leaders in parameters of credit penetration, except in case of agri-advances penetration, which is highest in the state of Punjab. In case of deposit penetration, small states like Goa and Mizoram take a lead. Study helps us to know the level of financial inclusion in a country and provides a base for further policy and decision making by the apex authorities.

Financial liberalization, market structure and credit penetration

Abstract This paper shows that the effects of financial liberalization on the credit market of a small and capital constrained economy depend on the market structure of domestic banks prior to liberalization. Specifically, under perfect competition in the domestic credit market prior to liberalization, liberalization leads to lower domestic interest rates, in turn leading to increased credit penetration. However, when the initial market structure is one of imperfect competition, liberalization can lead to the exclusion of less wealthy entrepreneurs from the credit market. This provides a rationale for the mixed empirical evidence concerning the effects of liberalization on access to credit in developing markets. Moreover, the analysis provides new insights into the consequences of foreign lenders’ entry into developing economies.