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A Study on

Financial inclusion an overview

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Page 1: Financial inclusion  an overview

A Study on

Page 2: Financial inclusion  an overview

Review of Literature

A Government Committee on financial inclusion, headed by C Rangarajan defines financial inclusion as

the process of ensuring access to financial services and timely and adequate credit where needed by

vulnerable groups such as the weaker sections and low income groups at an affordable cost.

Muhammad Yunus the 2006 Nobel laureate, who originated the idea of eradicating poverty thirty years

ago through his novel idea of banking the unbanked. Yunus is quoted stating that “…things are going wrong

not because of market failures. The problem is much deeper than that. The mainstream free-market theory

suffers from a conceptualisation failure, a failure to capture the essence of what it is to be human.”

Page 3: Financial inclusion  an overview

Research Methodology

Research Design

• The study on “Financial Inclusion in India” has been undertaken to throw a light on the concept of Financial Inclusion as it plays a vital role in India being a developed economy.

• The study analyse various initiatives qualitatively and quantitatively taken by the Government with the help of Reserve Bank of India along with Union Bank of India as its ally..

• Secondary data in the form of bank documents were analysed as to find out incidence of Financial Inclusion till date along with Primary data which was recorded direct from the people via mode of questionnaire.

Page 4: Financial inclusion  an overview

Sample Selection

• Confined to Chandigarh-Panchkula-Mohali region as a result findings are limited to a small region only

• The respondents were selected, on the basis of their profession (low income earners) which included, Rickshaw Pullers, Road side Artisans, Vegetable vendors, Contract Farmers, House hold maids.

Sampling Technique

The technique incorporated is that of convenience sampling (Non Probability Sampling). The field work was conducted over a period of 3 weeks with total100 respondents.

Page 5: Financial inclusion  an overview

Data Collection

In order to collect the data both Primary and Secondary research was conducted. • For Secondary Data various online websites, journals, research papers and committee reports were

referred in order to conduct proper analysis.

• Primary Data was collected via Schedules which were recorded via face - face interview

Data Analysis

Analysis of Secondary data was done by tabulating the data and calculating means and percentages across the variables .The data was condensed into simpler form so as to facilitate quick and effective analysis. Expert opinions were also sought

The Primary data in form of Survey was analysed with the help of software, Statistical Package for Social Services 8 and Microsoft Excel 2010 were used which includes nominal data and ordinal data represented via graphs ,trend lines, pie charts, radar.

Page 6: Financial inclusion  an overview

100

61%

39%

Male Female

SAMPLE SIZE

SAMPLE BIFFURCATION

56%42%

2%Primary Education

Secondary Education

Higher Secondary Education

Page 7: Financial inclusion  an overview

Low Income Earners

Moderatley Low Income Earners

Less than Medium Earners

Medium Income Earners

0% 5% 10%15%20%25%30%35%40%

Income Level of Respondents

Page 8: Financial inclusion  an overview

53%47%

yes no

Extent of Financial Inclusion

Page 9: Financial inclusion  an overview

66%

80%

8%

26%

6%12%8%

Low Income

Lack of Documents

Too expensive to maintain

Bank to far

Not Important

Lengthy Process

Tried but refused

Reasons for not having a Bank account

Page 10: Financial inclusion  an overview

41%

5% 1%No Indentification Card

No Job

Had Debts

Reasons for refusing a formal bank account

9%

98%

2%

Self Help Group Aadhar Gurantee Credit Card

Awareness regarding Government Initiatives

Page 11: Financial inclusion  an overview

38%29%

31%

Bank Private LendersRelatives

Sources of Loans

Page 12: Financial inclusion  an overview

YOU SAVE WITH

Bank

Self

Both

YOU SAVE FOR

Future Expenses

Emergency

Both

0

0.5

1

000.14

0.46

0.4

0000.16

0.26

0.58

Page 13: Financial inclusion  an overview

Saving small amount

Taking Loan

Financial Literacy

Advice on new schemes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Importance of a Banking account

Page 14: Financial inclusion  an overview

Saving small amount

Taking Loan

Financial Literacy

Advice on new schemes

0% 10% 20% 30% 40% 50% 60%

Importance given by banks to

Page 15: Financial inclusion  an overview

Suggestions for reduction in financial exclusion

1. Human Development 2. Access to Work – NREGA 4. Procedural/Documentation Changes5. Proactive Role of Government6. A Role for Rural Post Offices 7. Effective Use of IT Solutions8. Adequate Publicity9. Mobile Banking10. Imbibing Technological know how

Page 16: Financial inclusion  an overview

Conclusion

The future agenda of financial cooperatives in Increasing Financial Inclusion in India can be depicted through ‘Nine R’.

• REEXAMINE • REORIENT • RECAPITALISE • REVIEW • RESTRUCTURE • REDEFINE

• REORGANISE • REENGINEER • REVAMP

Page 17: Financial inclusion  an overview

THANK YOU !