A study on Rural Customer Perception with respect to formal financial system, from the financial inclusion point of view
Abstract: Formal financial system includes the banking sector and what is the perception of rural people regarding the activities of formal financial system was discussed on the full abstract. The term rural finance is about providing financial services- secure savings, credit, money transfer and insurance in rural areas. The past study showed that for the rural people, secure and flexible saving schemes are more important than access to credit. It is difficult to understand rural peoples mind and offer the services according to their needs. When talking about loans for investment and working capital, it enables the rural people to make investments, and purchase agricultural inputs and working capital. But besides these, there lies another view which said that loans are not always favourable; some poor borrowers experience difficulties in repaying their debts, due either to circumstances beyond their control (sickness, theft, etc). The perception of rural customer regarding formal financial system also effects due to the reason that in recent years several microfinance institutions such as SHG (Self-Help Group), BISWA (Bharat Integrated Social Welfare Agency), NBFC are engaged to serve the poor section of the society. As a result, majority of the developing world’s rural population does not have access to the formal financial system. Although these measures have helped in widening the access of rural households to institutional credit, vast majority of the rural poor have still not been covered. Such lending done under the poverty alleviation schemes suffered high repayment defaults and left little sustainable impact on the economic condition of the beneficiaries. The poor status of financial services is evident from the facts that considerable gap between demand and supply for all financial...
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