Extent Of Financial Inclusion Research Articles

A District Level Analysis of the Status of Financial Inclusion in Assam, India: Implications for Social Development Policies and Programmes

In recent years, India has placed a greater emphasis on the issue of financial inclusion. The purpose of this research is to assess the current status of financial inclusion in the various districts of Assam, India. A financial inclusion index is developed for each district in Assam by using data pertaining to three key dimensions of financial inclusion: banking penetration, availability of banking services and usage of banking services. The findings indicate that despite several initiatives to provide financial services to all, the success of financial inclusion in Assam is still far from satisfactory. Significant disparities exist in the extent of financial inclusion across the districts in Assam. While a few districts have achieved considerable success, the achievements of the majority of districts are unsatisfactory. The regression analysis indicates that literacy has a significant effect on such disparities in financial inclusion. The study argues that to enhance the efficacy and success of financial inclusion, all stakeholders need to make a concerted effort with a social development perspective.

Measurement of Financial Inclusion in India: An Integrated Approach with TOPSIS and EWM

The extent of financial inclusion among Indian states for the period has been measured and compared by constructing a composite index using an integrated methodology of TOPSIS (Technique of order preference by similarity to ideal solution) with EWM (Entropy Weighting Method). The proposed index has three broad dimensions of banking penetration, availability, and usage of banking services with an extended variable. Data for the study include: state wide bank data, demographic, geographic, and economic data, and are taken from Reserve Bank of India’s (RBI) publications. There is a general improvement in financial inclusion in India, while UT of Chandigarh and Delhi top the index, and Manipur and Nagaland bottom of the index. The southern region tops India on financial inclusion in terms of average rank. The methodology adopted in this study is not widely adopted in IFI literature. Moreover, the index has been constructed with statically assigned weight by using EWM.

Extent of Financial Inclusion in Haryana: A District-level Analysis

The present article investigates the level of financial inclusion in Haryana by creating a multi-dimensional financial inclusion index. The study constructed the index for the district of Haryana in 2010 and 2020. After an extensive review of literature, the study takes into consideration three basic variables as a representation of extent of financial inclusion, namely penetration of banking, accessibility of banking services and usage of the banking system. The study confirmed that the level of financial inclusion is quite high in Gurugram district but the situation is alarming in Mewat district indicating a wide inter district disparity in financial inclusion. Thus, the study advocated an inclusive policy for financial inclusion to bring all the segments of the community under the scope of the formal monetary arrangement. Further, setting up of digital set-up to remote and rural areas, opening of more financial literacy centres and more liberal credit policies can help to fulfil the true spirit of financial sector reforms.

Effectiveness of Financial Inclusion in Economic Growth of India

Financial Inclusion (FI) is a significant interaction to accomplish the objective of comprehensive development. Appropriately, the Reserve Bank of India (RBI) has put forth, supported attempts to expand the entrance of basic financial services in unbanked zones, while proceeding with its strategy of guaranteeing satisfactory however feasible progression of credit to need areas of the economy. FI is conveyance of banking administrations at a reasonable cost to the immense segments of oppressed and low-pay gatherings. By FI we mean the arrangement of reasonable financial services, to be specific admittance to installments and settlement offices, investment funds, advances, and protection services by the formal framework to the individuals who are generally not offered these kinds of services by any other financial institutions due to their poor credit history. Meaning of FI emerges from the issue of financial exclusion of almost 3billion individuals from the basic financial services across the world, with just 34percent populace occupied with formal banking. India has, 135 million FI families, the second most noteworthy after china. The current paper is a modest endeavor to discover the reasons for financial exclusion in India, examine the degree and extent of FI with regards to India and propose measures to take care of the issue of financial exclusion in India.

A Study on Impact of Financial Inclusion on Inclusive Growth in India

Inclusive growth is the buzzword for the developing economies like India. After three decades of the post-liberalisation period we have to think whether our economic growth is really inclusive. The disparities or inequalities in income, education, health, drinking water, sanitation and shelter are still remaining a barrier to inclusive growth. Besides, gender-gap or male-female discrimination still cannot be eradicated from the society. The 11th Five Year Plan (2007-12) chartered a strategy for inclusive growth to bridge the divisions between ‘haves’ and ‘have not’. Financial inclusion is the key strategy to achieve inclusion growth. In August 2014 the Modi Government launched a financial inclusion programme, PMJDY, with the view to reach several necessary financial services to the remotest area at an affordable cost. Inclusive financial system mobilises more productive resources leading to economic growth and better opportunities for reduction in poverty. In this backdrop, the present paper focuses on the extent of financial inclusion, need of inclusive growth and impact of financial inclusion on inclusive growth in India.

India's inclusive growth - an approach based on TOPSIS method

This study analyses the achievement of 32 Indian states and union territories in the inclusiveness of financial system, their relative position, major emerging trends and computes the rate of growth during a period of 2000-2001 to 2016-2017. The level of inclusion is determined using technique of order preference by similarity to ideal solution (TOPSIS) method and growth rate is computed by log linear regression model. The results indicate that states and union territories have secured different level of inclusiveness of financial system. While the situation has seen tremendous improvement in approximately 20% states/union territories, it has faced significant decline in 13% states/union territories. There is no robust change in as many as 70% states/union territories. These dynamics in the extent of financial inclusion will act as a guide in policy formulation by concerned authorities.

The extent of financial inclusion through MGNREGS: a district level analysis in West Bengal, India

PurposeMahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) launched in the year 2006, with the pursuit of the objective of removing poverty and unemployment and thus address the issue of financial inclusion. The performance of the programme across the states in India has not been uniform. The purpose of this study is to focus on the financial inclusiveness features associated with MGNREGS program across the selected districts in West Bengal in the years of recent past.Design/methodology/approachIn this study, financial inclusion index has been developed by consideration of four indicators with the help of principal component method. Fixed effect regression model has been applied to explain the impact of relevant determinants on financial inclusion index.FindingsIt is observed that out of 19 districts, seven districts registered an increase in the value of the financial inclusion index in the year 2019 compared to that in the year 2013. The empirical analysis for identifying the determinants of overall inclusion reveals that factors like households having active job card, utilization of fund, amount of labour cost and number of works have significant influence on financial inclusion.Originality/valueThe study widely discussed how the scheme was helping in promoting financial inclusion by providing wage payment through banks and post offices accounts. The author has also tried to highlight some of the difficulties in accelerating the speed of financial inclusion when banks and post offices are used as a means for wage payment and finally provide remedial measures that could be taken to tackle these problems.

A Perspective on Financial Literacy and Inclusion in India

The financial inclusion is a crucial element in the fight against poverty. The ability to take effective decisions regarding the use and management of money with required informed judgments is financial literacy. It enables a person to understand the importance of savings and thus regarded as an important requirement for functioning effectively in modern society. Large sections of the rural population borrow from moneylenders (their sole resource) at a very high and unreasonable cost causing slavery and have no access to any financial services. The article highlights that considering the immensely large population of the country, the progress on financial inclusion is not enough and financial institutions and banks need to manage their efforts towards financial inclusion since the development of the economy is impacted and linked with the extent of financial inclusion in the country. Access to finance by the underprivileged group, poor, and disadvantaged is essential to remove poverty on one hand and the economic growth on the other.

Extent of Financial Inclusion and Exclusion among Rural Households in Fazilka District of Punjab

Financial inclusion is a process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as economically weaker sections and low income groups in particular, at an affordable cost in a fair and transparent manner by regulated mainstream institutional players (CRISIL, 2013). The study brought out that an average number of bank accounts came out 2.06 per household which is higher in banking village(2.80). The extent of bank account holders was highest among large famers (4.40) and lowest among labourers. Out of the total bank accounts, the public banks occupied the highest share (41.74 per cent), followed by private banks (24.76 per cent). Out of the total number of bank accounts, 50.47and 54.39 per cent accounts were not functional in banking and non-banking village respectively. The awareness level about Jan Dhan Yojna was exceptionally low in non-banking village as compared to banking village. Besides, crop loan (32.67 per cent), majority of the sampled households used bank accounts for availing bank loan (38 per cent) only.

Extent of Financial Inclusion: a literature Review

A strong financial system is a foundation of economic growth, development and progress of an economy. A financial system which gains impetus from being functionally diverse, displays competent performance, is precarious to our national objectives of building a market-driven, productive and advancing economy. Growing system forefronts levels of investment and economy growth with its depth and exposure. In this period of becoming economic power and self-reliant, it is vivacious for any policy implications to resultcordial conditions for persons, households and private institutions. The affluence of contact of banking services and vigorous bank branch network are the major enablers of developmental and expansionary activities in India. India has an dynamic financial market/system comprising of money market, Forex market, capital market, debt market to cater to financial needs and wants of various participants and segments of the society. It guarantees smooth and proficient flow of monetary resources, meeting the financial needs required for extension of wealth. India has a remarkable and well-structured banking system to satisfy the pecuniary needs of individuals and households’ and which back the progress and development of the economy. Towards attainment of these needs, basic reforms, supervision and constant monitoring are envisioned to confirm a modern and up-to-date banking practices, healthy competition, and financial inclusion and well-balanced de-regulation.

Financial Inclusion through Pradhan Mantri Jan Dhan Yojana: A Study of Rural Punjab

Pradhan Mantri Jan DhanYojana (PMJDY) is a national mission for financial inclusion. The present study was undertaken to examine the extent of financial inclusion through PMJDY. The study revealed that about 55.46 per cent of the respondents had bank account under PMJDY while about 44.54 per cent of them were financially excluded under the scheme in the study area. Most of the PMJDY account holders were male, labourer, illiterate and married. More than half of the PMJDY account holders’ bank accounts under the scheme were found dormant. Majority of the PMJDY account holders had bank account in the public sector banks and were in the other than their native village. All the account holders had saving bank account. Majority, (68.62 per cent) of the account holders opened their account for Direct Benefit Transfer (DBT) schemes purpose. None of the account holders received over draft facility of 5000 in Punjab. About 39.36 per cent account holders had RuPay Card, 8.51 per cent had life insurance and 10.11 per cent had accident insurance under the scheme

Financial inclusion in Punjab: An inter district analysis

Despite a tremendous development in the access of financial services, vast proportions of the population are still excluded from the formal financial institutions. The promotion of inclusive financial system is the need of the hour. There is lack of comprehensive measures that can be used to estimate the extent of financial inclusion. This paper has proposed the financial inclusion index based on penetration, availability and usage dimensions of financial inclusion across all the districts of Punjab which takes values between 0and 1. 0 denotes complete financial exclusion and 1 indicates complete financial inclusion in an economy. Since 1955 government of India has been taking efforts for inclusion such as creation of State Bank of India in 1955; nationalization of commercial banks in 1969 and 1980; initiating the Lead Bank Scheme in 1970; establishing Regional Rural Banks (RRBs) in 1975; introducing Self-Help Group (SHG)-Bank Linkage Programmer in 1992 and formulating the Kisan Credit Card scheme in 2001. However, greater access is expected to foster financial inclusion An inclusive financial system should have as many users as possible, that is, an inclusive financial system should penetrate widely amongst its users. Likewise, the availability of bank branches captures the extent of accessibility to the formal financial system only partially. The usage of formal financial services depends on others factors such as GDP per capita, development of agriculture and industries etc. Financial inclusion along with the Governmental developmental programmer however can lead to an overall financial and economic development in the state and extending the banking services to everyone in the state will be the key driver towards an inclusive growth.

Micro-econometrics Approach to Financial Inclusion through PMJDY in India: A Case of Cuttack District of Odisha

The paper aims at measuring the extent of financial inclusion through Pradhanmantri Jan Dhan Yojana (PMJDY) by analysing the primary data, collected during May-August, 2016 from 300 households of Cuttack district of Odisha, India. The data are analysed with the help cross tabs, ratio, percentage and Logit model. Accessing of financial services by the poor and vulnerable groups is a pre-condition for to employment, poverty reduction, economic growth and social cohesion. Recently, the Prime Minister of India has taken the initiative which has given birth to PMJDY as the National Mission on Financial Inclusion on August 28, 2014. Its main objective is to guarantee financial inclusion of the poor and rural population and to give them financial freedom and stability. It has the motto to cover all households in the country having a bank account and other banking facilities. The scheme is based on “Sab ka sath sab ka vikas” i.e. inclusive growth. It was reported that a total of 7 crores bank accounts have been opened with deposits totalling more than 5000 crores of rupees as of November 6, 2014. The findings of the study show that the effectiveness of PMJDY depends on the various factors like economic factors, socio-demographic factors and others. It shows that the factors like income from primary occupation, level of education, age, gender, bank deposit, post office deposit, mutual fund, loans to friends and relatives, self-help groups, other policies like LIC, working family members outside village for wage and in MGNREGA influence more than half of the people to open their accounts under PMJDY. Whereas some other factors like unawareness of the scheme, more distance from the banks discourage some people to open their account under this scheme. The result of the Logit model reveals as years of education, income from secondary occupation, working in MGNREGA and outside village for wage increases the odds ratio to have an account under PMJDY for the households’ increases by 9, 6, 97 and 99 percent respectively. This calls for the policy to increase the level of education, and other earning opportunity to the households so that the ultimate objective of the Yojna could be achieved.

Financial Inclusion and Indebtedness-A Study of Rural Punjab

Financial inclusion is a process of ensuring access to financial services and timely and adequate credit at an affordable cost. For financial growth, it is a move from opening an account in the bank to regular savings and finally to a relationship which enables the borrower to access loans on regular basis. The present study was conducted in rural Punjab with the objectives to examine the extent of financial inclusion in terms of number bank accounts and to analyze the availability of institutional and non-institutional credit, its adequacy, timely access to credit and rate of interest. Ten villages were selected for the purpose of study and total enumeration method was used for collection of primary data. The study highlighted that despite the majority of the respondents having bank account, the access to credit was very low which needs the attention of the policy makers.

Financial Inclusion in Bangladesh: Evidence from Two Villages

The paper uses participatory research to explore the extent of financial inclusion in two villages in Northeastern Bangladesh. It also uses Findex database to draw a comparative image of financial access in Bangladesh and other parts of the world. While Bangladesh data on financial inclusion exhibit financial capacity of the market, participatory evidence shows financial capability of the service receivers. Review of literature, secondary data and participatory evidences show that there are substantial financial gaps across the economies and within the households. In rural context, it is evident that financial access is low in developing countries like Bangladesh.

Financial Inclusion in India: An Inter-State Analysis

Inclusive growth has been a major focus of the Government of India in the recent days towards achieving harmonious development of the country. A major initiative in this direction has been taken by the government of India in collaboration with the country’s Reserve Bank emphasising on financial inclusion so that the access of financial services reaches to the mass. The promotion of financial inclusion has been considered as a policy priority in India since 2005. However, the moot questions that need to be answered yet related to financial inclusion as a policy are: How is financial inclusion measured? What are the factors considered in its measurement? What is the magnitude of effect of a factor influencing financial incision? Is there any difference in such magnitude found across states or regions? Has there been any exclusion of any state or region from the financial inclusion policy so far? If yes, what could be the possible reasons? The present paper makes a modest attempt towards examining the above issues. The paper, entirely based on secondary data, has been organised in the following manner. Section-1 of the paper deals with a review of the policy related to financial inclusion. Section-2 examines the factors influencing financial inclusion followed by section-3 that evaluates the method of its measurement. Section-4 examines the extent of effect of the factors considered on the index of financial inclusion (IFI) along with evaluating the magnitude of difference across factors and states/regions. On the basis of the ranks earned by the states/regions on extent of financial inclusion, the paper attempts to find out those states or regions which are yet to come in the ambit of financial inclusion. Such states/regions may therefore be considered as part of “financial exclusion”. In the last section the paper brings out the summary conclusion along with policy suggestions on the basis of the analysis carried in the entire study.

The Extent of Financial Inclusion through Business Correspondent Model in Kadapa District, Andhra Pradesh

This paper explores the extent to which formal, regulated financial institutions such as banks have been able to partner with Business correspondents, commercial entities or Individuals whose primary objective and business is other than the provision of financial services and whether this model is meeting the needs of the vast swath of the society-those who are poor and living in the rural area in an affordable manner. The paper illustrates the case of Kazipet District in Andhra Pradesh where banks have recently developed extensive networks of such correspondents.

MGNREGA and Financial Inclusion – An Inter-District Analysis of Odisha

The study attempts to have an inter-district analysis of the performance of MGNREGA in Odisha. Among 23 states, Odisha is having an index of financial inclusion value of 0.2 and is at 15th rank. Thus the extent of financial inclusion is found to be significantly low in Odisha. Financial inclusion is the key to empowerment of poor, underprivileged and low skilled rural households as they compose 70 percentage of Indian population. Financial Inclusion can truly lift the financial condition and improve the standards of lives of the poor and the disadvantaged. To fasten the pace of financial inclusion, the Government of India in 2008 declared that wage payments, under the Mahatma Gandhi National Rural Employment Guarantee Act, the world’s largest rural public works programme, would be made through banks and post offices. As MGNREGA is a widely discussed public policy and knowledge about it is the need of the hour, the present paper will analyze how the scheme is helping in promoting financial inclusion via wage payment through banks and post offices in Odisha. It will also highlight some of the problems that are encountered when banks and post offices are used as a means for wage payment to accelerate the speed of financial inclusion and remedial measures that could be taken to tackle these problems.

Financial Inclusion : African Scenario

This paper attempts to study the extent of financial inclusion in Africa with Financial Inclusion Index (FII). The two-dimensions on which FII was measured are financial access index and financial usage index. This study was conducted on the backdrop of the absence of such an index for the African continent. The data for this study was taken from the Financial Access Survey of the International Monetary Fund. The region-wise analysis of financial inclusion index shows that the northern African countries are sound in financial inclusion followed by the east African countries, which are considered as the poorest economies of the world. The study proves the direct relationship between financial access and financial usage. The study concludes that the financial inclusion is very low in major parts of Africa, since 84 percent of the total sample countries fall in the Low Financial Inclusion category. It is suggested the financial products have four critical elements, viz. convenience, reliability, flexibility and continuity in order to achieve greater financial inclusion in Africa.

SHG-Bank Linkage Model - Key to Financial Inclusion in India An Empirical Analysis

The present paper attempts to examine the extent of financial inclusion by self-help group (SHG)-bank linkage programme against the backdrop of growing financial exclusion. It substantiates that the persons having lowincome and less geographical access to bank, e.g. agricultural labourers, marginal and small farmers, migrant labourers, tribal and women may be excluded from the financial inclusion. Further, it also seeks to examine the role of SHG-bank linkage model, banking density, financial literacy and level of economic development in achieving financial inclusion across various regions in India. The variable of percentage of adults covered in SHGs also has positive association with the level of financial inclusion, especially in credit accounts. It suggests that SHGs can play significant role in achieving the financial inclusion, especially for women and low-income families.