Financial Inclusion

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Financial Inclusion Scenario

(A study on extent of Financial Inclusion in remote villages of Medak Dist)

P.Hima Bindu *

Sneha Jain**

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Abstract:

The correlation between financial inclusion and economic growth has long been widely recognized: low financial inclusion impedes economic growth. Access to easy and affordable credit by the disadvantaged social groups is acknowledged as a key criterion for poverty alleviation and reducing social inequity. However despite broad consensus on the importance of access to finance as a powerful poverty alleviation tool and substantial financial sector reforms in India, it is estimated nearly half the rural households continue to be excluded from the formal financial sector.

Hardly one-fourth of the rural households are assisted by banks. Hence the major task before banks is to bring most of those excluded, i.e. 75% of the rural households, under banking fold. So there is a need for the formal financial system to look at increasing financial literacy and financial counseling to focus on financial inclusion and distress amongst farmers. Indian banks and financial market players should actively look at promoting such programs as a part of their corporate social responsibility.

The present paper tries to analyze extent of financial inclusion in India, and evaluate financial inclusion scenario . It further tries to identify reasons of financial exclusion by considering demand side challenges rather than supply side challenges. To understand the people perception of financial inclusion in general context, a survey is conducted in Mallaipalli,Lacchapeta and Chervapuram villages of Dubbak Mandal in Medak Dist, in Andhra Pradesh.

Key Words:Demand Perspective,Supply perpective,Obligation to Opportunity

* Associate Professor, Department of Master of Business Administration, CMR College of Engineering and Technology (Affiliated to JNTU), Hyderabad, Andhra Pradesh (himabindu_s@yahoo.com ,Ph No:9704409222)

** Assistant Professor Department of Master of Business Administration, CMR College of Engineering and Technology (Affiliated to JNTU), Hyderabad, Andhra Pradesh (sj1984@gmail.com ,Ph No:9963797388)

Financial Inclusion Scenario

(A study on extent of Financial Inclusion in remote villages of Medak Dist)

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1. INTRODUCTION

The prophecy of Millennium Development goals of U.N. i.e. “growth with equity” clearly envisages that the growth spree of the globe in the 21st century has left some people behind the time. Handful of the global populace are still languishing in the vicious circle of poverty & are cast aside by those who are economically stronger & swifter in the sway of globalization & liberalization. For sustenance/better growth of the world, the deprived sections should be dragged into the mainstream of growth. This is because of the fact that poverty any where is a grave threat to prosperity everywhere. Financial services actively contribute to the humane & economic development of the society. These lead to social safety net & protect the people from economic shocks. Hence, each & every individual should be provided with affordable institutional financial products/services popularly called “Financial Inclusion”.

Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost. Financial products & services are identified as basic banking services like deposits accounts, institutional loans,...
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