Financial Inclusion In India Research Articles

Dynamic Financial Inclusion in ASEAN 8: Do Macroeconomics and Financial Technology Matter?

This study aims to estimate the effects of macroeconomic indicators and financial technology on financial inclusion in ASEAN 8 during 2010-2018. There are three financial inclusion indicators, which include debit card ownership (Model 1), credit card ownership (Model 2), and domestic credit to GDP ratio (Model 3). Furthermore, the dynamic panel is applied to demonstrate dynamic financial inclusion models. The findings show that the domestic credit to GDP ratio is influenced by the unemployment rate, inflation, and financial technology. In addition, Model 1 and 2 show that the FEM is a robust model, while Model 3 indicates that REM is a robust model. This study encourages governments in ASEAN 8 to manage macroeconomic indicators progressively and stably to expand equal financial inclusion for the community

Financial Inclusion Indicators and their Effect on Corporate Profitability

The main objective of this research is to figure out the effect of financial inclusion indicators on the profitability of firms looking specifically on the banking sector in Jordan. The researchers used the applied approach relying on data of financial inclusion indicators published by the Central Bank of Jordan, World Bank, and Jordanian commercial banks. A regression analysis is employed to examine the relationship between financial inclusion and bank profitability (Return on Assets). Findings of the study showed that there is a significant relationship between financial inclusion and firm profitability. The study recommends that Jordanian commercial banks should increase access to financial services through different channels and tools in order to increase financial inclusion in the Jordanian community.

Household Debt, Financial Inclusion, and Economic Growth of India: Is it Alarming for India?

The process of economic growth must strive to include participation from all sections. In India, inclusive growth has always been a priority. The agenda of inclusive growth is reflected in the kind of policies and regulations that the policymaking and regulating institutions have been developing over the past decade. From Agricultural Economy to developing economy, India has come a long way in implementing financial sector reforms especially related to financial inclusion. The motive is economic growth. The present study was done to find the causal relationship between India’s financial inclusion and economic growth and household debt and economic growth using indicators for financial inclusion, household debt, and economic growth. The relationship was checked using the linear regression technique. The results indicated that only three out of ninety-six indicators of financial inclusion affected economic growth but. Household debt and economic growth have a negative relationship. The results have serious policy implications in India as India is moving towards financial inclusion.

Effects of International and Internal Remittances on Financial Inclusion in Ghana

This article examines the relationship between remittances and financial inclusion in Ghana. The data for the study was extracted from the results of an analytical review of the living standards survey indicators in Ghana. The methodological tools of the study are represented by a regression equation based on the use of the Force Entry Method to test the functioning of variables in the model. The study empirically confirms and theoretically proves that domestic remittances have a positive and significant impact on access to financial services, while international remittances affect the likelihood of opening a bank account, but do not have any significant impact on applying for a loan and lending to remittance households. It is substantiated that domestic and international money transfers have a significant positive impact on the opening of bank accounts, even when forging collateral. Based on the results of calculations, the paper substantiates the conclusion that remittances contribute to increasing the availability of financial services in Ghana. It was noted that domestic remittances have a greater potential to improve financial inclusion in Ghana than international remittances. The paper emphasizes that the provision of collateral is an important lever for lending to households. Remittances will have very little impact on financial inclusion when financial institutions require collateral to facilitate the application and grant. According to the results of the study, the following recommendation were provideds: development of a strategy to improve domestic remittances to increase indicators of financial inclusion and economic development; improving the conditions for remittances, especially domestic remittances, in order to ensure their flexibility and deepen financial integration; use of domestic remittances as collateral for household loans. Keywords: collateral, financial inclusion, financial institutions, Ghana, remittances, loan application, migration.

Istraživačka analiza finansijske inkluzije u Čadu

This paper aims to explore the state of financial inclusion in Chad. Adopting a Multiple Correspondence Analysis (MCA) on a sample of 1000 individuals from the Global Findex (2017), the study measured the inclusiveness of financial systems in Chad through a Financial Inclusion Index (FII). Furthermore, it assessed the distribution of the FII using the factor decomposition of the Gini coefficient. The findings showed that the average FII was low, 24.89%, and it varied between 7.43% and 60.35%. Financial institution account, deposit, withdrawal, and debit card ownership were the most influential indicators of financial inclusion in Chad. Moreover, the paper revealed that, despite its low level, financial inclusion was not smoothly distributed among the Chadian population (Gini coefficient of 0.196). The analysis of the financial inclusion inequality profile showed that there was a persistent financial inclusion gender gap in Chad, exacerbated by discriminations in education and income. Thus, policy interventions should target the provision of formal accounts, a reduction of costs of financial services (withdrawal and debit cards), and promoting formal savings by developing adequate savings products, to foster financial inclusion in Chad. Furthermore, these policies should be gender-responsive while considering its interaction with education and income.

Analisis Pengaruh Inklusi Perbankan Syariah terhadap Pembiayaan UMKM Sektor Halal di Indonesia

Financial inclusion is an issue that is being echoed by the government together with other authorities and stakeholders. One of the main targets of financial inclusion besides households is the MSMEs. Some indicators of financial inclusion, namely access, use and quality. This study aims to analyze how the influence of Islamic banking inclusion (BUS and UUS) from access indicators to the distribution of MSME financing. The access indicator used is the number of Islamic banking offices which include KP, KC, KCP and KK. This research uses a quantitative method with a VAR (Vector Autoregression) model. The results showed that the number of BUS and UUS offices affect MSMEs in Islamic banking financing. In addition, Islamic banking in Indonesia is still not optimal in channeling financing to MSMEs. Various ways can be done by Islamic banking in order to expand access to MSME actors, including developing the Financial Technology (Fintech) system, expanding Islamic banking agents through the Laku Pandai program and expanding cooperation with MSME stakeholders.

Factors influencing financial inclusion in India

In the modern era, financial institutions serve as facilitators of economic progress and advancement. It is, therefore, necessary that people have equitable access to these financial institutions and the services they offer especially in emerging economies like India. Notwithstanding that the Indian banking sector has grown tremendously over the years in terms of performance and outreach, a large number of people have limited or zero access to the financial services. Financial Inclusion thus emerges as a necessity for it is equally beneficial to the banks as well as to the unserved population vis-a-vis the provision of new avenues for the former and financial services for the latter. In this study, we used panel data covering Indian states over a period of five years, from 2009 to 2013, to assess the factors influencing financial inclusion in the country. This study found that distinct state-effect is prevalent among the Indian states. Further, the number of factories as a proxy for industrialization and outstanding credit as a proxy for loans and advancements significantly reveal that income and employment generating schemes must be launched by the Government of India and the Central Bank of India keeping in mind the underprivileged lot.

Information and Communication Technology (ICT) Infrastructure and Financial Inclusion in India

ICT (Information and Communication Technology ) is the mostly discussed and observed subject matter now a days. In the all round progress of an economy , this sector has a key role to play. An economy cannot thrive well with proper information and communication technology. In driving the development of financial inclusion and sustainable development the role played by information and communication technology , cannot be overlooked. This infrastructure plays a crucial role ,enhancing the technical progress and thereby total productivity of the economy. Moreover previous findings have also showed a positive correlation of ICT on economic growth. This paper studies the role of ICT by using a multiple regression analysis. We have used mainly secondary data to arrive a logical conclusion. It is expected that this paper will help the policy makers and the researchers in analyzing and understanding the importance of financial inclusiveness for economic development.

International financial inclusion: Multidimensional determinants of access to saving and credit

This work assesses quantitatively the determinants of two of the main indicators of financial inclusion: savings account ownership and credit access. Through the use of a dynamic panel, this work verifies that on the supply side, formal saving requires an infrastructure to access these services, as well as palliatives to the asymmetric information in the financial sector, while on the demand side, the education and the stability of income sources of its potential users are crucial. In order to move to a more comprehensive financial inclusion by taking a formal loan, even though access to this infrastructure is still relevant, its effect is decreasing. Therefore the national educational level and Credit Information Societies acquire relevance, as well as the employment vulnerability, which affects eligibility and the commitment that indebtedness entails. The significance of certain cultural traits in the credit static panel warns that, although financial inclusion can be promoted through standards vetted internationally, its effectiveness cannot be separated from the social context where they are implemented.

Connecting the dots: Digital payments and financial inclusion in India

The digital payment system is playing a crucial role in promoting the financial inclusion programme in India. The main objective of this paper is to analyse the present status of digital payment and financial inclusion in the country. The study, which is based on secondary data, finds that all items of digital payments such as real-time gross settlement (RTGS), retail electronic clearing, prepaid payment investment (PPIs), electronic funds transfer/national electronic funds transfer (EFT/NEFT), immediate payment service (IMPS), usage at point of service (PoS), debit cards, mobile banking, credit cards and a number of ATMs are increasingly being used in India. The performance of digital payment transactions and mobile wallet transactions has been improving. In addition, the performance of financial inclusion programmes indicates that the contribution of public sector banks in terms of the number of accounts opened, balance in accounts and number of RuPay cards issued was the highest in comparison with other banks in India. This study also highlights the major challenges faced by digital banking in the country. The overall performance of digital banking indicates that digital payment is an essential part of financial inclusion in India.

Financial Modelling for Business Sustainability: A Study of Business Correspondent Model of Financial Inclusion in India

Executive Summary The study highlights the need for measures to accelerate the pace of the business correspondent (BC) model for financial inclusion in India. The financial analysis of the existing BCs with the existing products and services in practice shows a very diffusive break-even (more than 7 years). The occurrence of such a long-term break-even point can be a potential threat to the sustainability of new and struggling entrepreneurs like a Customer Service Point (CSP). A CSP agent runs a kiosk of a certain bank in a rural context, functioning like a BC between the bank and the beneficiaries. The primary investigation found that high cost and low volume of transaction at the CSP points are two major causes of the long break-even. In this context, the study revisited the constructs related to cost structure, market outreach, market potential and commission structure for channellizing respective banking and non-banking products. The major categories of products include (a) banking operation, (b) loan and over-draft, and (c) social security schemes. In search of a solution, the study adopts a non-random stratified sampling technique with a semi-structured interview process to collect the data from different stakeholders in the BC operation. To develop an economically viable BC model, the researchers use a standard financial modelling technique. In contrast to the existing kiosk model of CSP operation, the study found that while applying the new model a CSP agent takes three years to break-even under the same condition as that of the existing model. The study can also be applied in the domain of bottom of the pyramid (BOP) marketing by treating to create value among the low-income customers and business partners like CSPs. This research can further be extended to investigate the viability of the BC model from the banks’ return on investment perspective.

Increasing Digital Banking Adoption and Usage Trends in India and its Impact on Financial Inclusion

Financial Inclusion in India is growing with adaptation of increasing Digital Banking Trends with more Fintech players entering into the market. With more disruptive technologies and intervention with help of internet and mobile banking, adaptation and usage of electronic banking in rural and semi rural areas is also reflecting increasing trends. This reflects that more households are provided with affordable banking services including savings accounts, loans, pension and Rupay Debit Cards for the day to day retail transactions. This paper focuses on recent trends of digitalisation and analyzes the sustainability impact on increased and advanced Financial Inclusion in India.

Mobile Banking – An Answer to Financial Inclusion in Hilly Rural India.

Financial Inclusion is still a major challenge for the India, despite of being one of major agenda since 2004-2005, due to difficulty in reaching far flung areas of the country comprising 600,000 villages. This has huge implications on economic development of the country. Therefore there is regular thrust from Government of India (GoI) to bring everyone to the ambit of formal banking system through various schemes. Mahatma Gandhi National Rural Employment Act (MGNREGA) is one of the major GoI schemes that have contributed significantly to financial inclusion in India. India has more mobile connections compared to banking accounts, therefore GoI in Economic Survey 2014-15, proposed JAM (JanDhan Yojana, Aadhar Number and Mobile Number) trinity to use ICT for more efficient and effective spread of formal banking even to the hilly areas where brick and mortar banks are difficult to build and sustain. Hence to understand the constructs of mobile banking adoption for financial inclusion in Champawat district of Uttrakhand, India under MNREGA, this research discusses revised technology acceptance model (TAM) and carefully picked constructs from literature review which were weaved together by using Total Interpretive Structural Modeling (TISM) to form a conceptual model for Champawat District of Uttrakhand, India.

Determinants of Financial Inclusion in India: A Literature Review

Determinants of Financial Inclusion in India: A Literature Review

Efectos de la inclusión financiera en el desarrollo humano del departamento del Huila-Colombia

La inclusión financiera se ha convertido en un instrumento dentro de las políticas públicas que ejercen los países en busca de garantizar el acceso a servicios financieros. En Colombia se ha desarrollado el programa “Banca de las Oportunidades” con este propósito. Sin embargo, el programa no analiza el alcance de estos procesos en el bienestar de la población. En este artículo se analizan los efectos de la inclusión financiera en el desarrollo del departamento del Huila. En este sentido, se implementó una metodología mixta, mediante el método DEXPLIS; en la fase cuantitativa se estimó y analizó un modelo estadístico multivariado, a fin de determinar si existe relación entre inclusión financiera y desarrollo; en la fase cualitativa se aplicaron entrevistas a funcionarios de la Gobernación del Huila. Las técnicas de recolección de información fueron revisión de literatura, bases estadísticas y guía de entrevista. Dentro de los resultados obtenidos se determinó que existe una relación positiva entre el Índice de Desarrollo Humano (IDH) y los indicadores de inclusión financiera. Adicionalmente, se identificó que los indicadores de acceso y de uso repercuten en las dimensiones de salud, educación e ingreso siempre y cuando se garantice el uso de los productos y los servicios financieros.

A Study on Financial Inclusion in India

A Study on Financial Inclusion in India

Status of Financial Inclusion in India, Persisting Challenges and Way Forward

Financial inclusion is a critical pillar of development and has been a major policy thrust for the Indian Government over the decades. However some of the major policy impetuses were received the last one decade resulting in some of the biggest policy interventions for financial inclusion in the world. Pradhan Mantri Jan Dhan Yojana, Direct Benefit Transfer under Digital Banking and Aadhar has been significant interventions in this area. Despite these and several areas policy measures as well as technological innovations adopted by RBI and banking sector, even though encouraging, is much less than satisfactory when it comes to their extent and penetration when it comes to usage by marginalized sections, people in the informal economy and those living in remote areas. The significant barriers for achieving inclusive growth are Financial illiteracy, lack of convenience, technology issues and viability. This study aims at integrating some of the results of existing literature on financial inclusion and role played by Government, RBI and the other banks in promoting inclusive growth. It also attempts to analyze the key persisting challenges on the demand as well as supply aspects of financial inclusion. On the basis of its findings the paper proposes a set of preliminary recommendations to strengthen and support financial inclusion in India. It has been observed that the financial sector has still not been able to design appropriate products in a sustainable way that can address the needs of the poor, those who are in the informal economy or to identify key gaps in a huge and diverse country like India where social security is very low for most of population. Technology obviously is playing and still needs to play a far greater role in addressing some of these challenges which the traditional banking models have failed to address.

Does Demographic Variables Influence on Financial Inclusion in India Post With Reference To Ariyalur District?

Financial Inclusion are influenced by the segment of Human population ( Demographic )variables such as Gender, Age, Educational Qualification, Occupation, Marital Status, Family Size, Income and their residential area under convenience sampling method were adopted. The primary data were collected with 70 Respondents of Post office account holder with the help of a well structured close ended and likert scale questionnaire which consists of parameters to measure the influence variables on financial inclusion. The collected data were analyzed with the help of the SPSS.21 software for validating the assumptions made by researcher. The study therefore done found that Demographic variable influence the financial inclusion processes, chi-square analysis and reliability test were confirmed that the demographic variables had sufficient impact on the financial inclusion of India Post.

Digital financial inclusion: evidence from Ukraine

The article examines the influence of the current stage of economy digitalization on the financial inclusion in Ukraine. The purpose is to assess the level of financial inclusion in the country, to determine the dominant influence of price and non-price barriers to access to financial services for the Ukrainian population when compared to other world countries and to define which part of the adult population is able to join the formal financial services system through the use of innovative channels and financial service systems. Based on the methodological approaches proposed by the World Bank and the G20 Financial Inclusion Indicators, the authors analyze the real traditional and digital access opportunities of the general public to financial services in Ukraine compared to other countries across the world. Particular emphasis is placed on overcoming existing non-price barriers that impede formal financial inclusion of the Ukrainian population. The research findings stress the need to adhere to the basic principles of digital financial inclusion in order to regulate activities of financial institutions and their agents in the digital provision of financial services, strengthen regulatory control over the use of innovative financial products and service systems, and protect the rights of consumers of financial services in Ukraine.

A Critical Study of Payments Banks in India

The Demonetization in the year 2016 has played a key role in changing the manner how we spend our money. It has also revolutionized the banking services. This has been made possible because of a monumental change in the data tariff regime due to the entry of Jio in the telecommunication market. The 1st Narendra Modi Cabinet’s policy of ‘Digital India’ has also paved the way for these online platforms. The aim of this paper is to study the origination of Payments banks in India as envisioned by the “Committee on Comprehensive Financial Services for Small Businesses and Low Income Households.” This committee was formed by the Reserve Bank of India in the year 2013 and headed by Nachiket Mor. The objective of the panel was to study various aspects of financial inclusion in India. The panel submitted its final report on 7 January 2014. This paper also studies the aims and objectives of the Payments Bank, the group of customers that it seeks to serve and the various services that it provides to its customers. There has been a meteoric rise in the user base of payments banks in the last two years. There are currently seven active payment banks in India like Jio Payments Bank, Paytm Payments Bank and Airtel Payments Bank to name a few. Since any banking services in India is not possible without the RBI’s approval, this paper is also aimed at reviewing the validity of Payments Bank as per the law. It also discusses the guidelines of Reserve Bank of India regarding the payments bank.