Financial Inclusion: A Study on the Scope and Effect in the Indian

Economy

Project Report Submitted in Partial fulfillment of the requirement for

the award of Degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted by
Abhishek Anand
Reg. No: 1702004370
Under the guidance of
Sanjeev Kumar Chopra

SIKKIM MANIPAL UNIVERSITY (SMU)

DIRECTORATE OF DISTANCE EDUCATION
August 2018

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 Abstract

If the misery of the poor be caused not by the laws of nature, but by
our institutions, great is our sin.”
Charles Darwin
The financial sector acts a multiplier and a mediator for the economic
growth and stability. Financial sector is the backbone of any
developing nation. So, in order attain the continuous growth and
development a country must focus on providing the financial services
to every citizen of the country. Consequently financial inclusion plays
an indispensable role in inclusive growth of an economy. In simple
terms financial inclusion strives to address the challenge of poor
access of financial services to rural masses in India. Financial
inclusion can play a key role in facilitating inclusive economic growth
particularly in a developing economy.
“Financial inclusion is about the broadening of financial services to
those people who do not have access to financial services sector,
providing greater financial literacy and consumer protection so that
those who are offered the products can make appropriate choices. The
imperative for financial inclusion is both a moral one as well as one
based on economic efficiency”. In India financial inclusion is not new
unusual requirement. Out of 248 crores of household 60% of the

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population in India is unbanked.  40% in urban areas  60% in rural
areas An inclusive finance must provide better banking services to all
sections of society, especially low-income and weaker sections. The
uniqueness of having a bank account is that it not only provides basic
banking facility but also finance for investment/production purposes
which opens opportunities for enhanced employment. The origin of
financial inclusion can be traced back to the year when United Nation
initiatives were undertaken which specified the provision of credit,
insurance, savings and other banking services to all “bankable
households.” Government of India has been very active towards
improving the level of financial inclusion and for this numerous
efforts have been undertaken by government. Through this paper an
attempt has been made to provide an overview on status of
financial inclusion in India in past few years.
Through this study an attempt has been made to provide an overview
on status of financial inclusion in India in past few years. On the basis
of analysis conducted, it can be stated that the financial inclusion is in
progressive stage in India in terms of branch penetration.
Objective of financial inclusion is to deliver the banking services at an
affordable cost to vast sections of society.The world as also seen how
the so called weak banks and financial institution of India came
triumphant during recession of 2008. However in recent years

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Government of India & RBI have been making concerned efforts to
promote Financial Inclusion as one of the important national objective
for Economic Development. Some of the major efforts made in last
few decades includes nationalization of banks, establishment of
RRB’s and recently zero balance Basic Saving Bank Deposit account
i.e, Jan Dhan Yojana.

Keywords: Financial Inclusion, inclusive growth, developing

economy

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 BONAFIDE CERTIFICATE

Certified that this project report titled “Financial Inclusion: A Study

on the Scope and Effect in the Indian Economy” is the bonafide
work of “Abhishek Anand” who carried out the project work under
my supervision in the partial fulfillment of the requirements for the
award of the MBA degree.

SIGNATURE
(Sanjeev Kumar Chopra)
Guide Reg No: MBARJ0534

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 DECLARATION BY THE STUDENT

I, Abhishek Anand bearing Reg. No. 1702004370 hereby declare that

this project report entitled “Financial Inclusion: A Study on the
Scope and Effect in the Indian Economy” has been prepared by me
towards the partial fulfillment of the requirement for the award of the
Master of Business Administration (MBA) Degree under the guidance
of Sanjeev Kumar Chopra.

I also declare that this project report is my original work and has not
been previously submitted for the award of any Degree, Diploma,
Fellowship, or other similar titles.

Signature
(Abhishek Anand)
Reg. No. : 1702004340
Place: Lucknow
Date: October 15, 2018

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 Table of Content
1. CHAPTER I – INTRODUCTION………………………………
…..……
1.1 Introduction…………………………………………..
2. ……………..
2.1 Scope of the study……………………………………
3. CHAPTER 3 – LITERATURE REVIEW……………….
3.1 Introduction………………………………………….
4. ……….
4.1 Research approach…………………………………...
Error: Reference source not found………………………………
…
Error: Reference source not found………………………………
…….
4.4 Data collection…………………………….……….
4.4.1 Types of Data…………………………………
4.4.2 Methods of Data Collection…………………
4.5 Problems faced……………………………………
5. CHAPTER V – DATA ANALYSIS & INTERPRETATION
6. ……………………………
6.1 Findings………………………………………………
……………………………………………

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 ……………………………………………
7. CHAPTER VII – LIMITATIONS AND SCOPE OF FUTURE
RESEARCH………………………………
7.1 Limitation…………………………………………
…………………………
8. Bibliography …………………………………………
9. 9. Appendix – Questionnaires.............................................

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 CHAPTER I – INTRODUCTION

1.1 Introduction
In simple term financial inclusion means that individuals and
businesses have access to useful and affordable financial products and
services that meet their needs – transactions, payments, savings, credit
and insurance – delivered in a responsible and sustainable way.
Financial inclusion is the delivery of financial services at affordable
costs to vast sections of disadvantaged and low income groups.
Unrestrained access to public goods and services is the sine qua non of
an open and efficient society.

Being able to have access to a transaction account is a first step

toward broader financial inclusion since a transaction account allows
people to store money, and send and receive payments. A transaction
account can also serve as a gateway to other financial services, which
is why ensuring that people worldwide can have access to a
transaction account is the focus of the World Bank Group’s Universal
Financial Access 2020 initiative.
As account holders, people are more likely to use other financial
services, such as credit and insurance, to start and expand businesses,
invest in education or health, manage risk, and weather financial
shocks, which can improve the overall quality of their lives.
Financial inclusion is now a common objective for many central banks
among the developing nations. Financial inclusion refers to the
accessibility and availability of financial services to all segments of
society, particularly the unbanked and underbanked populations. In
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the context of the Indian economy, financial inclusion has gained
significant attention since its introduction in the early 2000s. The aim
is to provide individuals and businesses with affordable and
convenient access to formal financial services such as banking, credit,
insurance, and investment opportunities.
India, with its vast population and diverse socioeconomic landscape,
faced a significant challenge of excluding a large section of its
population from the formal financial system. Financial inclusion has
been recognized as a powerful tool for poverty reduction, economic
growth, and social development. By bringing individuals into the
formal financial sector, it enables them to save, invest, and access
credit, thereby fostering entrepreneurship and economic participation.
The impact of financial inclusion on the Indian economy has been
multifaceted. Firstly, it has contributed to reducing income inequality
by promoting inclusive growth and providing opportunities for
marginalized communities to participate in the economy.
Additionally, it has facilitated the integration of informal sectors into
the formal economy, promoting transparency and accountability.
Furthermore, financial inclusion has played a crucial role in promoting
financial stability and resilience by channeling savings into the formal
banking system. It has also encouraged digital financial services,
leading to increased efficiency and convenience in transactions,
thereby boosting productivity and economic growth.
Overall, financial inclusion in the Indian economy has helped bridge
the gap between the rich and the poor, fostered economic
development, and created a more inclusive and sustainable financial
system. However, challenges remain, such as ensuring last-mile
connectivity, addressing financial literacy, and building trust among
the unbanked population. Efforts must continue to strengthen financial
inclusion initiatives and expand their scope to maximize their impact
on India's economy and society.
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 Government of India & RBI:
Finance is a powerful intervention for economic development. Access
to finance, especially for the poor, is empowering because financial
exclusion often leads to broader social exclusion. Yet, formal finance
does not appear to have adequately permeated vast segments of our
society, although progress is being made.
To advance the process, the Reserve Bank has granted ‘in principle’
approval to a multitude of players in the financial eco-system to
establish Payments Banks and Small Finance Banks. The recently
announced Jan Dhan Yojana by the government marks a landmark in
the quest for universal financial access. The government is also
focusing on paying benefits directly into these accounts. This will
ensure that a big chunk of the accounts opened under various schemes,
which are presently dormant, witness ‘movement’, thereby integrating
access with use. These are very heartening developments. Several
Committees in the recent past have opined on our quest for a more
inclusive financial regime. The thrust of their recommendations was
towards having an enabling regulatory framework, improving delivery
systems and exploiting its possible synergies. At the Reserve Bank
Conference on Financial Inclusion in April 2015, the Hon’ble Prime
Minister urged the Reserve Bank to take the lead in encouraging
financial institutions to set concrete targets for financial inclusion to
help transform the quality of life of the poor. Against this backdrop,
this Committee on Medium-term Path on Financial Inclusion (CMPFI)
was set up to devise a measurable and monitor-able action plan for
financial inclusion that encompasses both households and small
businesses. The Committee sets a much wider vision of financial
inclusion as ‘convenient‘ access to a set a basic formal financial
products and services that should include savings, remittance, credit,
government-supported insurance and pension products to small and
marginal farmers and low-income households at reasonable cost with
adequate protection progressively supplemented by social cash
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transfer besides increasing the access for micro and small enterprises
to formal finance with greater reliance on technology to cut costs and
improve service delivery, such that by 2021 over 90 per cent of the
hitherto underserved sections of society become active stakeholders in
economic progress empowered by formal finance. Thus, the financial
inclusion initiative as envisaged by the Committee is much broader in
scope, going beyond the traditional domain of the Reserve Bank.
Meaningful financial inclusion is not feasible without government-to-
person (G2P) social cash transfer. There is also an opportunity to
usher in next-generation reforms by replacing agricultural input
subsidy with income support, which increases the personal disposable
surplus of the poor on a regular basis and could place the inclusion
effort on a solid foundation.With the Jan Dhan, Aadhaar and Mobile
(JAM)) trinity taking hold, there is an ideal opportunity to seamlessly
integrate access and use and, in the process, ensure that leakages in
financial transfers are substantially lowered. Innovative delivery
channels, such as mobile wallet and e-money coupled with regulatory
changes to allow interoperability across banks and non-banks, seem to
hold the key to a more efficient payment system and reduce the
fascination for cash. Banks need to integrate the Business
Correspondent (BC) model into their business strategy and with help
from technology can develop a low-cost, reliable, ‘last mile’ delivery
channel that could win the trust of the common person. Biometric
identification coupled with the provision of credit information to
credit bureaus can help build a more robust credit system that can then
be used as the basis for obtaining loans at reasonable costs while
avoiding the pitfalls of over-indebtedness. For micro and small
enterprises, professionals who can evaluate the creditworthiness of
these firms by acting as intermediaries with the bank can help
alleviate the significant credit gap in this sector. In agriculture,
millions of small farmers live on the precipice, starved of credit. In the
absence of bold structural reforms of land digitization and tenancy
certification to enable credit to the tiller, the problem is likely to

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persist. Agricultural distress can only be addressed satisfactorily by
instituting universal crop insurance for small and marginal farmers at
a heavily subsidized rate by the government, the money for which can
be funded by doing away with the current interest subsidy scheme that
has distorted the agricultural credit system and seems to have impeded
long-term investment. While financial products have their benefits,
there is a clear danger of mis-selling, which could damage
marginalized segments who have an uncertain cash flow. Efforts on
financial education need to be strengthened, including product-driven
financial literacy so that the poor are not short-changed. Grievance
redressal for customer complaints in banks needs some imaginative
thinking. The overall governance structure would have to be more
business-like, focused on delivery. However, the progress is far from
satisfactory as evidenced by the World Bank Findex Survey (2012).
According to the survey findings, only 35% of Indian adults had
access to a formal bank account and 8% borrowed formally in the last
12 months. Only 2% of adults used an account to receive money from
a family member living in another area and 4% used an account to
receive payment from the Government. The miniscule numbers
suggest a crying need for a further push to the financial inclusion
agenda to ensure that the people at the bottom of the pyramid join the
formal financial system, reap benefits and improve their financial
well-being. Thus financial inclusion is cause as well as outcome of
economic development & this is the reason for selecting the topic
“FINANCIAL INCLUSION & ECONOMIC DEVELOPMENT.

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 CHAPTER 2 – SCOPE AND OBJECTIVE

2.1 Scope of the study

Through this study an attempt has been made in order to have an
insight of various aspects of the financial inclusion focusing mainly on
the status of financial inclusion in India.
 A study on scope of financial inclusion in the Indian economy
 A study on financial inclusion effect on the Indian economy

Financial Inclusion should include access to financial products and

services like,

 Bank accounts – check in account 

 Immediate Credit 
 Savings products 
 Remittances & Payment services
 Mortgage 
 Financial advisory services
 Entrepreneurial credit

Out of 248 crores of household 60% of the population in India is

unbanked.

 40% in urban areas

 60% in rural areas
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North Eastern(7%) , Eastern regions (8%). This state led to generation
of financial instability, poor economic development in developing
countries like India.

Household access to financial service

Objective of the study

 To understand the need of financial inclusion 

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 To understand the impact of financial inclusion on economic
development 
 To study the initiatives of GOI and RBI 
 To study the constraints to financial inclusion 
 To study the recent developments in financial inclusion

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 CHAPTER 3 – LITERATURE REVIEW

3.1 Introduction
This topic has been chosen because today exercises a potential
influence on employee productivity and human relation climate in an
organization. The project is aimed at understanding the satisfaction of
employees relating to their job-their working condition, their
supervisors, their fellow workers their payment and overall
organization.

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Paramjit sujlan and chhavikiran(2018) studied that there is a dire need
to provide quality financial services in rural areas for economic
growth as it will help rural households to found the growth of their
livelihoods. according to them financial inclusion initiatives are in
progressive stage. Dr. Anupama rawat and Dr. tanima dutta(2016)
highlighted that there are many constraints that lead to the exclusion
of women like illiteracy, lack of awareness regarding programs,
unfamiliarity with technology, predominant male society and several
other reasons, how ever in recent times the government and the
society are emancipating women. Sonu garg and Dr. parul Agarwal
(2014) studied that even though enough efforts are being made by all
stake holders viz Regulator, Government, Financial Institutions and
others, the efforts are not yielding the kind of result expected.
Regulatory bodies, banks and Government should intensively work on
create awareness by educating people about finance. Thus, Innovative
products, out of the box service models, effective regulatory norms
and leveraging technology together could change the landscape of the
current progress of the much needed and wanted, Financial Inclusion
Program. Mehta L, Jindal S and Singh K (2015) studied that setting up
financial literacy centres and financial literacy campaign are necessary
for smooth running of financial inclusion program. Aurelie
Larquemin(2015) highlighted that Indian authorities and financial

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inclusion actors lack measurement and knowledge of the outcomes
and impact of the past and actual initiatives toward financial inclusion.
It is commonly acknowledging than the shift in the financial inclusion
eff orts, as summarized in the Pradhan Mantri JanDhan Yojana
(PMJDY) policy and recent schemes like the DBT program, are a
move in the right direction. However, evidence are lacking to establish
correlation or causality between specific policies and the financial
situation in India, and to design the next phases of the financial
inclusion eff orts. An ambitious program of evaluation of these
policies would highlight success and failures and help shape the next
steps of financial inclusion support. Supravat bagli and papita
dutta(2012) studied that In our society generally the marginalized
groups of population are financially excluded. In most of the cases
their livelihoods are not monetized and they are deprived of the
financial inclusion. Besides, they are not well aware of the available
banking services; on the other hand, banking officials are not also well
aware of the needs and capacity of the people under this section. As a
result, banks cannot bring them under the umbrella of financial
inclusion. Therefore, the mass financial literacy and awareness among
the marginalized sections of people are absolutely necessary to
achieve financial inclusion.

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Akhil Damodaram(2013) studied that Financial inclusion is still a long
road ahead. Innovations in the field of branchless banking and
banking business model are making their way towards this goal.
Recent exploration suggests that product plays a very important role in
creating a financially inclusive ecosystem. Sachindra GR (2013)
studied that the key issue now is to ensure that rural credit from
institutional sources achieves wider coverage and expands financial
inclusion. For achieving the current policy stance of “inclusive
growth” the focus on financial inclusion is not only essential but a pre-
requisite. And for achieving comprehensive financial inclusion, the
first step is to achieve credit inclusion for the disadvantaged and
vulnerable sections of our society. The state has to play an important
role in financial markets.

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CHAPTER 4 – RESEARCH METHODOLOGY

4.1 Research approach

Research on financial inclusion involves understanding and analyzing
various aspects of accessibility, affordability, and usage of financial
services among different demographics. Here are some approaches
that researchers might take when investigating financial inclusion:

Quantitative Analysis: This approach involves using statistical

methods to analyze large datasets related to financial access and
usage. Researchers can use data from surveys, financial institutions,
government reports, and other sources to quantify the level of
financial inclusion across different regions, demographics, and
socioeconomic groups. This analysis might include indicators such as
the number of bank accounts, access to credit, usage of digital
financial services, etc.

Qualitative Research: Qualitative methods involve in-depth

interviews, focus groups, and ethnographic studies to gain a deeper
understanding of people's attitudes, behaviors, and challenges related
to financial inclusion. This approach helps researchers uncover the
reasons behind certain financial behaviors, cultural aspects affecting
financial decisions, and barriers to accessing financial services.
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Case Studies: Researchers may conduct detailed case studies of
specific regions, communities, or programs that have successfully
improved financial inclusion. By examining these cases, they can
identify best practices, challenges faced, and lessons learned that
could be applied in other contexts.

Policy Analysis: This involves assessing existing policies and

regulations related to financial inclusion. Researchers analyze the
impact of policy changes or interventions on the level of financial
inclusion. This approach helps in understanding how government
initiatives, regulatory changes, or public-private partnerships influence
access to financial services.

Technological Impact Studies: Given the increasing role of

technology in expanding financial services (such as mobile banking,
digital payments), researchers might focus on studying the impact of
technological advancements on financial inclusion. This includes
evaluating the effectiveness of digital financial tools and their
accessibility to different segments of society.

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Longitudinal Studies: Long-term studies tracking changes in
financial inclusion indicators over time can provide insights into
trends, progress, and persistent challenges. These studies help in
understanding the effectiveness of ongoing interventions and
identifying areas that need further attention.

Cross-country Comparative Studies: Comparing the status of

financial inclusion across different countries or regions allows
researchers to identify successful strategies implemented in one area
that could be replicated or adapted in others.
Certainly! Here are some additional research approaches and
methodologies commonly used in studying financial inclusion:

Econometric Analysis: This involves applying economic theories and

statistical techniques to analyze the causal relationships between
various factors and financial inclusion indicators. Econometric models
help in understanding how changes in variables like income,
education, infrastructure, etc., affect financial inclusion.

Behavioral Economics Studies: Understanding human behavior and

decision-making regarding financial matters is crucial for promoting
financial inclusion. Behavioral economics research focuses on

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cognitive biases, social influences, and psychological factors that
impact financial choices. This approach helps in designing
interventions that better align with people's behaviors and preferences.

Gender-focused Research: Given the disparities in financial access

between genders, researchers often conduct studies focusing on
gender-specific issues related to financial inclusion. These studies
explore the unique challenges faced by women in accessing financial
services, their decision-making autonomy, and the impact of gender-
focused interventions on financial inclusion.

Impact Evaluation: Researchers use impact evaluation methods, such

as randomized control trials (RCTs) or quasi-experimental designs, to
assess the effectiveness of specific financial inclusion interventions or
programs. By comparing outcomes between groups exposed to
interventions and those that are not, researchers can measure the direct
impact of these interventions.

Network Analysis: Understanding the network structures within

communities or regions can provide insights into how information
about financial services spreads, social capital impacts access, and the
role of social networks in promoting or hindering financial inclusion.

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Policy Simulation: Researchers use simulation models to predict the
potential impact of different policy interventions on financial
inclusion. This approach helps policymakers assess the likely
outcomes of implementing certain policies before they are
implemented, allowing for informed decision-making.

Ethical Considerations and Impact Assessment: Research on

financial inclusion often involves ethical considerations, especially
regarding data privacy, inclusivity, and the potential impact on
vulnerable populations. Researchers explore these ethical dimensions
and conduct impact assessments to ensure that financial inclusion
initiatives are equitable and do not harm the intended beneficiaries.

By combining these diverse research approaches, researchers can

generate comprehensive insights into the complexities of financial
inclusion, contributing to the development of more effective strategies
and policies to foster inclusive financial systems. Combining multiple
research approaches often provides a more comprehensive
understanding of financial inclusion, enabling policymakers, financial
institutions, and development organizations to design more effective
interventions and initiatives to promote inclusive financial systems.

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Error: Reference source not found
Research philosophy in the context of financial inclusion pertains to
the fundamental beliefs, assumptions, and perspectives guiding the
approach, methods, and conduct of research in this field. Several
research philosophies can underpin studies on financial inclusion:

Positivism: This philosophy emphasizes empirical observation,

quantifiable evidence, and the objective analysis of data. Researchers
adopting a positivist approach aim to uncover universal patterns and
regularities in financial inclusion. They rely on quantitative data,
statistical analysis, and rigorous methodologies to derive generalizable
conclusions about financial inclusion.

Interpretivism: In contrast to positivism, interpretivism focuses on

understanding subjective experiences, meanings, and contexts.
Researchers adopting an interpretivist stance in financial inclusion
research seek to explore the diverse perspectives, values, and social
constructs that shape individuals' interactions with financial services.
Qualitative methods like interviews, case studies, and ethnography are
commonly used to delve into these subjective aspects.

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Critical Theory: Researchers inclined towards critical theory in
financial inclusion research critically analyze power structures,
inequalities, and socio-political dynamics that influence financial
access. This approach aims to uncover underlying systemic issues and
advocate for transformative changes in policies and practices to
address barriers faced by marginalized groups.

Pragmatism: Pragmatism combines aspects of both positivism and

interpretivism, emphasizing the practical application of research
findings. Researchers adopting a pragmatic approach in financial
inclusion might use a mixed-methods approach, utilizing quantitative
and qualitative techniques based on what is most effective for
addressing specific research questions.

Feminist Research: This philosophy focuses on understanding and

addressing gender disparities in financial inclusion. It aims to
challenge androcentric biases, explore gendered experiences related to
access to financial services, and advocate for gender-sensitive policies
to promote inclusive financial systems.

Ethnography and Participatory Action Research (PAR):

Ethnographic research involves immersing oneself in the community

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to understand their behaviors and interactions related to finance. PAR
engages community members in the research process, empowering
them to identify issues and co-create solutions for enhancing financial
inclusion.

The choice of research philosophy in financial inclusion studies

depends on various factors, including the research questions, the
context being studied, the desired depth of understanding, and the
intended impact of the research findings. Often, a combination of
these philosophies may be used to comprehensively address the
complexities of financial inclusion, considering both quantitative data-
driven analysis and qualitative exploration of social contexts and
individual experiences
.
Error: Reference source not found

The study is mainly descriptive in nature. The data is mainly collected

from secondary sources like research papers, book of references, case
studies, magazines, internet websites, journals etc. various studies on
this subject have also been referred in this study. In this paper an
attempt has been taken to analyze the various initiatives taken by
Banks and Government of India. The data used in it is purely from
secondary sources according to the need of this study.

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Designing a research study on financial inclusion involves structuring
the approach, methods, and procedures to investigate and understand
specific aspects related to access, usage, and impact of financial
services. Here's a breakdown of a potential research design:

Identifying Research Objectives and Questions: Begin by defining

clear research objectives and framing specific research questions. For
example:
 What are the main barriers to financial inclusion in a particular
region or among specific demographics?
 How do cultural factors influence financial behavior and access to
financial services?
 What are the impacts of a specific financial inclusion program or
policy on the target population?

Selecting Research Methodology: Choose the appropriate

methodologies that align with the research objectives. A mixed-
methods approach (combining qualitative and quantitative methods) is
often useful in studying financial inclusion. Examples of
methodologies include:

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 Quantitative Methods: Surveys, data analysis of existing datasets,
econometric modeling, and statistical analysis to quantify trends
and patterns in financial inclusion indicators.
 Qualitative Methods: Interviews, focus groups, ethnographic
studies, and case studies to explore perceptions, attitudes, and
experiences related to financial services.

Sampling Strategy: Define the target population and develop a

sampling strategy. Consider factors such as demographics, geographic
locations, socio-economic status, and the specific focus of the study.
Ensure the sample represents the diversity within the population being
studied.

Data Collection: Implement the chosen methods to collect data. This

might involve:
 Conducting surveys/questionnaires to gather quantitative data on
financial behaviors, access to services, and preferences.
 Organizing interviews or focus groups to explore qualitative
aspects such as attitudes, beliefs, and challenges related to financial
inclusion.

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Data Analysis: Analyze the collected data using appropriate
techniques and tools:
 Quantitative analysis might involve statistical methods to identify
correlations, trends, and patterns in financial inclusion indicators.
 Qualitative analysis involves thematic coding, content analysis, or
narrative analysis to extract themes and understand nuances in
qualitative data.

Interpreting Findings and Drawing Conclusions: Synthesize the

results obtained from the analysis and relate them back to the research
objectives. Draw conclusions that address the research questions and
provide insights into financial inclusion issues or opportunities.

Recommendations and Implications: Based on the findings, suggest

recommendations for policymakers, financial institutions, or relevant
stakeholders. Highlight the implications of the research for improving
financial inclusion initiatives or policies.

Ethical Considerations: Ensure ethical standards are met throughout

the research process, including informed consent, data confidentiality,
and respecting the participants' rights.

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A robust research design in financial inclusion should aim for a
comprehensive understanding of the factors influencing access to
financial services, the effectiveness of existing interventions, and
recommendations for fostering greater inclusion in financial systems.
Flexibility in design and methods often proves beneficial in navigating
the complexities inherent in studying financial inclusion.

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4.4 Data collection
For the research report on financial inclusion, various types of data are
collected and analyzed to understand different aspects of access to and
usage of financial services. These types of data include:

 Demographic Data:
Information about the demographic characteristics of individuals or
households, such as age, gender, income level, education, employment
status, and geographic location. Demographic data helps in
understanding how different groups interact with financial services.
 Financial Service Usage Data:
Data on the usage of various financial services, including bank
accounts, credit facilities, insurance, remittances, pension schemes,
digital payment platforms, and other financial products. This data
provides insights into the extent to which individuals access and
utilize different financial services.
 Savings and Borrowing Data:
Information about savings habits, borrowing behaviors, and credit
access. This includes data on savings amounts, frequency of savings,
sources of borrowing, loan repayment patterns, and interest rates.
 Financial Literacy and Awareness Data:

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Data related to financial knowledge, understanding of financial
concepts, and awareness of available financial products and services.
Assessing financial literacy levels helps understand the impact of
education on financial inclusion.
 Transaction Data:
Records of financial transactions, both formal and informal, conducted
by individuals or businesses. Transaction data provides insights into
spending patterns, types of transactions made, and the use of formal
financial channels.
 Geo-spatial Data:
Geographic information about the location and distribution of
financial services, banking infrastructure, and the accessibility of
financial institutions in different regions or communities. Geo-spatial
data helps identify areas with limited access to financial services.
 Qualitative Data:
Narrative data obtained from interviews, focus groups, or open-ended
survey questions. Qualitative data captures perceptions, attitudes,
experiences, and barriers faced by individuals in accessing financial
services. It helps provide context and depth to quantitative findings.
 Policy and Regulatory Data:
Information about government policies, regulatory frameworks, and
financial inclusion initiatives implemented at regional, national, or

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international levels. Understanding policy landscapes helps in
assessing the impact of regulations on financial inclusion.
 Historical Data:
Longitudinal data or historical trends in financial inclusion indicators
over time. Historical data assists in identifying trends, patterns, and
changes in financial behaviors and access to services.
 Cross-country Comparative Data:
Comparative data across different countries or regions to understand
variations in financial inclusion levels, policies, and approaches.

Utilizing a combination of quantitative and qualitative data sources

helps provide a comprehensive understanding of the multifaceted
nature of financial inclusion. Analyzing these types of data can aid in
identifying gaps, barriers, opportunities, and effective strategies to
promote inclusive financial systems.

4.4.1 Types of Data

4.4.2 Methods of Data Collection

When conducting research on financial inclusion, various methods of

data collection can be employed to gather information about access,
usage, and barriers to financial services. Some common methods
include:

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 Surveys and Questionnaires:

Designing structured surveys or questionnaires is a widely used

method to collect quantitative data. These instruments can be
distributed electronically or in person to gather information about
individuals' financial behaviors, access to services, attitudes, and
preferences related to financial inclusion.

 Interviews:

Conducting structured or semi-structured interviews allows for in-

depth exploration of individuals' experiences, perceptions, and
challenges related to financial inclusion. This method provides rich
qualitative data and allows researchers to delve deeper into specific
issues.

 Focus Group Discussions:

Bringing together small groups of individuals from the target

population facilitates interactive discussions about financial inclusion.
Focus groups enable researchers to explore shared experiences,
cultural perspectives, and social dynamics influencing financial
behavior.

 Observations and Fieldwork:

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Observational methods involve direct observation of behaviors,
interactions, and access to financial services in real-world settings.
Researchers can gather valuable insights by observing how individuals
engage with financial institutions or use financial products.

 Secondary Data Analysis:

Utilizing existing datasets and reports from government agencies,

financial institutions, international organizations (like the World Bank
or IMF), and research publications can provide valuable quantitative
information about financial inclusion indicators, trends, and patterns.

 Case Studies:

Conducting in-depth case studies of specific communities, programs,

or interventions related to financial inclusion provides a detailed
understanding of the impact, effectiveness, and challenges faced by
these initiatives.

 Ethnographic Studies:

Immersing researchers in the target community or setting allows for

an in-depth understanding of cultural norms, social practices, and the
context influencing financial behaviors and access to services.

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 Mobile Surveys or Digital Data Collection:

Leveraging mobile technology or digital platforms to collect data,

especially in areas with limited access to traditional data collection
methods, can be effective in reaching a wider audience.

When selecting data collection methods, consider the research

objectives, the target population, available resources, ethical
considerations, and the depth of information required. Often, a mixed-
methods approach combining quantitative and qualitative techniques
can provide a comprehensive understanding of financial inclusion
issues. Additionally, ensuring proper validation, piloting, and ethical
considerations are essential to the success of data collection efforts in
financial inclusion research.

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4.5 Problems faced
Some common problems faced in financial inclusion project research
include:
 Data Availability and Quality:
Limited availability of reliable and comprehensive data on financial
inclusion indicators can hinder research efforts. In some cases, the
data might be outdated, incomplete, or inconsistent, making it
challenging to draw accurate conclusions.
 Sampling Challenges:
Obtaining a representative sample of the target population, especially
from marginalized or remote areas, can be difficult. Limited access to
certain groups or communities might lead to biased results, affecting
the study's validity.
 Complexity and Multidimensionality:
Financial inclusion is a multidimensional concept influenced by
various economic, social, and cultural factors. Measuring and
analyzing its multifaceted nature require comprehensive frameworks
and methodologies, which can be complex and challenging to
implement effectively.
 Ethical Considerations:
Research involving sensitive financial information requires strict
adherence to ethical standards, including data privacy, informed
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consent, and confidentiality. Ensuring compliance with ethical
guidelines while collecting and handling data is crucial but can be
challenging.
 Contextual Variations:
Financial inclusion challenges differ across regions, cultures, and
socioeconomic contexts. What works in one context might not be
applicable or effective in another. Research needs to consider and
address these contextual variations adequately.
 Long-term Impact Assessment:
Evaluating the long-term impact and sustainability of financial
inclusion projects can be challenging. Measuring sustained
improvements in financial well-being over time requires longitudinal
studies and continuous follow-up, which can be resource-intensive.
 Interdisciplinary Approach:
Understanding financial inclusion necessitates an interdisciplinary
approach that integrates insights from economics, sociology,
technology, and other fields. Collaborating across disciplines might
pose challenges in terms of language barriers, different research
methodologies, and conflicting perspectives.
 Policy and Regulatory Constraints:
Changing policies, regulations, or political environments can
significantly affect the landscape of financial inclusion projects.

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Uncertainties related to policy changes might disrupt ongoing research
or render findings less relevant.
 Evaluation of Program Effectiveness:
Assessing the effectiveness and impact of financial inclusion
programs or interventions requires rigorous evaluation methodologies.
Identifying causality and distinguishing project effects from external
factors can be challenging.
 Limited Stakeholder Collaboration:
Inadequate collaboration between researchers, policymakers, financial
institutions, and community stakeholders might restrict the research's
applicability and hinder the translation of research findings into
actionable policies or practices.

Addressing these challenges often requires careful planning,

innovative methodologies, stakeholder engagement, and continuous
adaptation throughout the research process. Overcoming these hurdles
is crucial to conducting impactful and meaningful research on
financial inclusion projects.

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CHAPTER V – DATA ANALYSIS & INTERPRETATION

Data analysis and interpretation in the context of financial inclusion

involve processing collected data to derive meaningful insights and
conclusions about the accessibility, usage, and impact of financial
services among different demographics. Here's a guide on data
analysis and interpretation steps:

 Data Cleaning and Preparation:

Ensure the collected data is accurate, complete, and consistent.

Remove any inconsistencies, errors, or missing values.

Organize the data in a format suitable for analysis, such as creating

data sets, coding responses, and labeling variables.

 Descriptive Analysis:

Start with descriptive statistics to summarize and describe the main

features of the data. This includes measures such as mean, median,
mode, standard deviation, etc., to understand the distribution and
central tendencies of variables related to financial inclusion.

 Segmentation and Group Comparison:

Segment the data based on different demographics (age, gender,

income levels, geographical regions, etc.).
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Compare these segments to identify disparities or differences in
financial inclusion indicators among various groups.

 Correlation and Regression Analysis:

Conduct correlation analysis to understand relationships between

different variables related to financial inclusion. For instance, how
income levels correlate with access to financial services.

 Regression analysis helps identify predictors or factors

influencing financial inclusion indicators.

For example, determining how education levels impact financial

literacy or access to credit.

 Factor Analysis or Cluster Analysis:

1. Factor analysis can help identify underlying factors or dimensions

within financial inclusion indicators. It assists in grouping related
variables and understanding their interrelationships.

2. Cluster analysis can be used to segment individuals into

homogeneous groups based on their financial behavior or access to
services.

 Qualitative Data Analysis:

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If qualitative data (such as interview transcripts) is collected, thematic
analysis or content analysis can be used to identify recurring themes
or patterns in participants' narratives related to financial inclusion.

 Visualization Techniques:

Use data visualization tools (e.g., charts, graphs, heat-maps) to present

findings visually. Visual representations help in communicating
complex data patterns effectively.

 Interpretation and Drawing Conclusions:

Interpret the analyzed data to draw meaningful conclusions about the

state of financial inclusion, the factors influencing it, and its impact on
different demographics or regions.

Relate findings to existing literature, theories, or frameworks in

financial inclusion to provide a broader context for interpretation.

 Limitations and Recommendations:

Discuss limitations of the analysis, including any constraints in the

data collection or analysis process.

Based on the findings, propose recommendations for policymakers,

financial institutions, or stakeholders to improve financial inclusion.

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Data analysis and interpretation in financial inclusion research are
essential for understanding complex relationships, identifying
disparities, and informing evidence-based policies and interventions
aimed at promoting inclusive financial systems.

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CHAPTER VI – FINDINGS, CONCLUSIONS &
RECOMMENDATIONS

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6.1 Findings

 Constraints to Financial Inclusion

The three big challenges are- high cost, lack of robust technology, and
lack of awareness. 

1. The banks are faced with high operating cost in extending the
fiancial services to the remote areas. 

2. High maintenance cost of these accounts as well as small ticket size

of the transactions is also adding to the problem.

 Possible way forward for promoting Financial Inclusion

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With the arrival of banking technology and realization that poor are
bankable with good business prospects, financial inclusion initiatives
will strengthen financial deepening further and provide resources to
the banks to expand credit delivery. The banking technology
initiatives meant for financial inclusion should be collaborative and
innovative with an objective to reduce the transaction costs. Thus,
financial inclusion along with the Governmental developmental
programmes will lead to an overall financial and economic
development in our country and as in the case for most developing
countries ,extending the banking services to everyone in the country
will be the key driver towards an inclusive growth.

 Role of financial inclusion on economic development

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The financial system serves as a catalyst to economic development.
The formal financial channels collect savings and idle funds and
distribute such funds to entrepreneurs, businesses, households and
government for investment projects and other purposes with a view of
a return. This forms the basis for economic development in modern
economic theory. The financial system plays the role of inter-
mediation and acts as a buffer in the mobilization and allocation of
savings for productive activities in an economy. Managing the
financial liquidity to avoid inflationary pressures and to flush out
enough liquidity to sustain the growth are the functions of financial
systems. It also assists in managing the risks faced by firms and
businesses, improvement of portfolio diversification, availability of
variety of financial instruments to suit the varied needs of the
businesses , people and shock absorbing capacity from external
economic changes. Additionally, the system provides linkages for the
different sectors of the economy and economies of scale.

 Banking reforms for promoting Financial Inclusion & recent

development

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With a view to covert banking services from the “class phenomenon”
to the “mass phenomenon”, the Central government nationalized
fourteen major commercial banks in 1969. It was considered that
banks were controlled by business houses and thus failed in catering
to the credit needs of poor sections such as cottage industry, village
industry, farmers, craft men, etc. The second dose of nationalization
came in April 1980 when six more banks were nationalized. The
broad objectives of nationalization of banks were- 

1. Social Welfare 

2. Controlling Private Monopolies 

3. Expansion of Banking 

4. Reducing Regional Imbalance 

5. Priority Sector Lending 

6. Developing Banking Habits

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To further the goal of financial inclusion, the government launched
the Lead Bank Scheme in 1969 itself. It was based on the
recommendation of the Gadgil Study Group. The basic idea was to
have an “area approach” for targeted and focused banking. Under the
scheme a cluster of villages were to be allotted to public sector banks
for serving to their credit needs. Thus, the RBI has adopted a bank-led
model for achieving financial inclusion and removed various
regulatory bottle necks in achieving greater financial inclusion in the
country. Further, for achieving the targeted goals, RBI has created
conducive regulatory environment and provided institutional support
for banks in accelerating their financial inclusion efforts. In more
specific terms, following were some of the initiatives taken by the RBI
for promoting Financial Inclusion in the country-

(a) Priority Sector Lending: It is an important role given by the

Reserve Bank of India (RBI) to the banks for providing a specified
portion of the bank lending to few specific sectors like agriculture or
small scale industries. This is essentially meant for an all round
development of the economy as opposed to focusing only on the
financial sector

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(b) Setting up of the “Ultra Small Branches”: These are non brick-
mortar branches, the purpose of which is to reduce the infrastructural
costs in setting up branches in rural areas. Under this initiative, the
banks will appoint banking correspondent who will deal with all cash
transactions and other routine work in that area. A bank officer will
visit this ultra small branch once a week and connect this business
correspondent to the banks’ core banking solution (CBS) through a
secured network enabling data access and transfer between the small
branch and the bank.

(c) Opening of no-frills accounts: Basic banking no-frills account is

with nil or very low minimum balance as well as charges that make
such accounts accessible to vast sections of the population. Banks
have been advised to provide small overdrafts in such accounts.

(d) Relaxation on know-your-customer (KYC) norms: KYC

requirements for opening bank accounts were relaxed for small
accounts in August 2005; thereby simplifying procedures by
stipulating that introduction by an account holder who has been
subjected to the full KYC drill would suffice for opening such
accounts. It has now been further relaxed to include the letters. issued
by the Unique Identification Authority of India containing details of
name, address and Aadhaar number.

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(e) Engaging business correspondents (BCs): In January 2006, RBI
permitted banks to engage business facilitators (BFs) and BCs as
intermediaries for providing financial and banking services. The BC
model allows banks to provide doorstep delivery of services,
especially cash in-cash out transactions, thus addressing the lastmile
problem. (f) Use of technology: Recognizing that technology has the
potential to address the issues of outreach and credit delivery in rural
and remote areas in a viable manner, banks have been advised to make
effective use of information and communications technology (ICT), to
provide doorstep banking services through the BC model where the
accounts can be operated by even illiterate customers by using
biometrics, thus ensuring the security of transactions and enhancing
confidence in the banking system.

(g) General-purpose Credit Card (GCC): With a view to helping

the poor and the disadvantaged with access to easy credit, banks have
been asked to consider introduction of a general purpose credit card
facility up to Rs 25,000 at their rural and semi-urban branches. The
objective of the scheme is to provide hassle-free credit to banks’
customers based on the assessment of cash flow without insistence on
security, purpose or end use of the credit. This is in the nature of
revolving credit entitling the holder to withdraw up to the limit
sanctioned

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(h) Simplified branch authorization: To address the issue of uneven
spread of bank branches, in December 2009, domestic scheduled
commercial banks were permitted to freely open branches in tier III to
tier VI urban centers, subject to reporting. In the north-eastern states
and Sikkim, domestic scheduled commercial banks can now open
branches in rural, semi-urban and urban centers with out the need to
take permission from RBI in each case, subject to reporting.

(i) Opening of branches in unbanked rural centers: To further step

up the opening of branches in rural areas so as to improve banking
penetration and financial inclusion rapidly, the need for the opening of
more bricks and mortar branches, besides the use of BCs, was felt.
Accordingly, banks have been mandated to allocate at least 25% of the
total number of branches to be opened during a year to unbanked rural
centers.

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(j) Opening of intermediate brick and mortar structure, for
effective cash management, documentation, and redressal of customer
grievances and close supervision of BC operations. Banks have been
advised to open intermediate structures between the present base
branch and BC locations. This branch could be in the form of a low
cost simple brick and mortar structure consisting of minimum
infrastructure such core banking solution terminal linked to a pass
book printer and a safe for cash retention for operating larger
customer transactions.

(k) The concept of differential banks: The RBI introduced the

concept of “Payment Banks” and “small banks” to attract serious
players and push financial inclusion. It allowed corporate houses,
including telecom players and retail chains, to set up payment banks,
and also gave them the option of forming joint ventures with
commercial banks. The guidelines had expanded the scope of
activities for providing third-party products and services, such as
mutual funds, insurance and pension. This would open avenues to earn
fee income. The guidelines have also allowed sending and receiving
remittances from multiple banks and international remittances and
permitted payment banks to function as business correspondents of
other banks. We will discuss this sub-topic in the subsequent section

55 | P a g e
6.2 Conclusion

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Despite all these initiatives, still there are millions of households
which are outside the ambit of financial system. Though, the banking
system has penetrated into the rural and remote areas, but still a large
percentage of our villages are without any bank branches. This may be
attributed to the lack of viability of operating a bank branch in such
areas, lack of business opportunities for banks etc. Over the last few
years a number of committees have been set up for reviewing the
working of banking system in India. Financial inclusion helps in
increasing the richness of the economy. It will increase the standard of
living of the people of the country and also ensure a rapid growth. It
will also reduce the gap between the haves and haves not. Financial
inclusion enhances the economy. The availability of banking facilities
and strong bank network in rural areas act as a fuel in development
and expansionary activities. A financial system, which is inherently
strong, functionally diverse and displays efficiency and flexibility, is
critical to productive and competitive economy. Traditional and
conventional banking solutions may not be the answer to address the
problem of financial inclusion in India. Banks need to introduce new
technologies in an innovative ways and create financially effective
models to carry forward the process of financial inclusion in an
effective and efficient manner. There is a urgent need to provide high
quality financial services in rural areas for economic growth as it will

57 | P a g e
help rural households to accumulate wealth for their overall growth.
Government of India has taken many initiative and schemes like
Pradhan mantri jan-dhan yojna to connect rural people with the
banking services, but still there are some segment of the nation which
is untouched from the financial inclusion initiatives and programs.
The positive thing is that financial inclusion initiatives are in
progressive stage. Rapidly developing technology has also played a
vital role in bridging the financial divide of the nation. Financial
Inclusion will help the poor in bringing them to the mainstream of
progressive growth and would also provide the financial institutions
an opportunity to be partners in inclusive growth. Financial inclusion
is the essence of sustainable and equitable economic growth and
development in a nation like India. The government should take
initiatives to form a training centres and financial literacy campaigns
to provide information and literacy among people about the financial
services and products of the banking centres in order to promoting
financial inclusion process. Challenges of financial exclusion are
faced by most of the states of the country and in order to solve it states
have to develop its own customized solutions drawing upon its own
experiences and features.

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6.3 Suggestion

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These suggestions should be implemented in India for enhancing
the Financial Inclusion process- 

 Government should increase number of low cost banks branches in

rural and remote areas in order to promote financial inclusion
programs. 

 Banks should focus more on products which should be simple,

affordable, low cost in maintaining that products and services and
which should be easily understood by the rural people. India has
the need to develop low bank branch model possibly similar to post
office. 

 Banks should do regular surveys at an stipulated interval in rural

and remote areas to know the financial needs of the people as well
as receive feedback from the customers about the financial services
and products. 

 R B I should allow service providers to provide better mobile

banking services at low cost price. 

 Micro Finance Organisations/ Non Banking Financial organisations

may be given authorization to do some financial services in remote
areas. 

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 Opening of Bank Accounts without minimum balance condition
should be allowed at all branches and places specially in remote
and unbanked areas. 

 Telecom Service providers and Banks should together work and

implement a new plan for Mobile Banking operations with low cost
too. 

 Mobile Banking should be encouraged as a smart way of sending

and depositing money in Rural areas and remote areas.

 Training should be provided to rural and remote areas people

regarding use of smart phone applications related to financial
services and products. 

 Low income families to be served aggressively through financial

inclusion: They should not only serve aggressively but also ways
should be shown to improve the lifestyle of the poor people of
society and around the world.

RBI and Government as part of their development role,

NABARD, which is spearheading this programme, and banks who
are the main promoters of the program, may initiate the following
effective steps to overcome these shortcomings: 

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 Promotion of Federation structure: The long term sustainability
of the SHG model may require a federal structure, without severing
the linkages that the SHGs have with the local bank branches. The
assumption that the federation structure should not be supplanted
on the SHGs and can be addressed when the demand emerges
needs reconsideration. 

 Maintenance of National Database on SHGs and MFIs: At

present, NABARD is maintaining the database on SHGs. It
publishes annual hand book on microfinance in India with focus
only on SHG Bank linkage programme. It is suggested that
NABARD be assigned the responsibility of collection of data
involving the entire sector, their compilation and dissemination. 

 Comprehensive regulatory framework: Presently, there is no

distinctive regulatory framework for the MFIs in India. Therefore,
there is a need of an exclusive regulation to regulate MFIs in India.

 Contribution to the MFDEF (Micro Finance Development and

Equity Fund) by Banks: The corpus may be built up on an
ongoing basis. A portion of profits of the bank may be contributed
to the fund. The Government may provide tax relief to Banks for
the contributions made. 

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 An integrated package of services ('a credit-plus' approach)
rather than just providing credits: When access to credit is
combined with savings facilities, non-productive loan facilities,
insurance, enterprise development and welfare-related services, the
adverse effects discussed above can be diminished. 

 Role of Corporate in Micro Finance: Corporate India, of late,

shown keen interest in the SHG movement as it provides an
alternative business opportunity for them besides being a means to
actualize its corporate social responsibility objectives. Many
corporates have realized that the people at the bottom of pyramid
can be brought into their business model. The group also sees a
critical role of the corporate sector in providing market linkage to
the products of the rural areas on a sustainable basis. The following
are the examples

1. ITC (through e-choupal model). 

2. Hindustan Lever Ltd (through Stree sakti project). 

3. Mahindra & Mahindra (through Mahindra Subh labh). 

4. Tata Group (through Tata kisan sansar)

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5. CHAPTER VII – LIMITATIONS AND SCOPE OF FUTURE
RESEARCH

7.1 Limitation

Future research on financial inclusion may encounter several

limitations, some of which include:

1. Data Availability and Quality:

Access to reliable, comprehensive, and up-to-date data on financial

inclusion indicators can be limited, especially in certain regions or
among specific demographic groups. Inconsistencies in data collection
methods across studies or lack of longitudinal data may hinder the
ability to make accurate assessments and comparisons.

2. Contextual and Cultural Variations:

Financial behaviors and attitudes are influenced by cultural, social,

and contextual factors. Future research may face challenges in
understanding and addressing these variations adequately, especially
in diverse and complex societies.

3. Changing Technological Landscape:

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The rapid evolution of technology and digital financial services poses
a challenge for researchers in keeping pace with emerging trends and
understanding their impact on financial inclusion. This dynamism
requires continuous adaptation of research methodologies and
frameworks.

4. Exclusion of Vulnerable Populations:

Marginalized or vulnerable groups, such as rural populations, women,

minorities, and people with lower income levels, often face greater
barriers to financial inclusion. Research might struggle to effectively
reach and represent these groups due to limited access, trust issues, or
cultural constraints.

5. Long-term Impact Assessment:

Assessing the long-term effects and sustainability of financial

inclusion interventions or policies can be challenging. Research might
encounter difficulties in tracking and measuring sustained
improvements in financial well-being over time.

6. Regulatory and Policy Constraints:

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Changes in regulatory environments or government policies can
significantly impact the landscape of financial inclusion. Researchers
may find it challenging to predict or analyze the effects of these
changes on the inclusivity of financial services.

7. Ethical and Privacy Concerns:

Studies involving sensitive financial information must adhere to strict

ethical guidelines. Balancing the need for data collection with privacy
concerns and ensuring the confidentiality of participants poses a
challenge for future research.

8. Measurement and Definition Challenges:

Defining and measuring financial inclusion consistently across

different contexts and populations can be complex. Researchers might
face difficulties in creating standardized metrics that capture the
multidimensional nature of financial inclusion comprehensively.

9. Interdisciplinary Approaches:

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Understanding financial inclusion requires interdisciplinary
perspectives, involving economics, sociology, anthropology, and
technology, among other fields. Integrating these diverse perspectives
into research might be challenging due to disciplinary boundaries and
silo ed approaches.

Addressing these limitations will be crucial for future research efforts

to generate comprehensive insights into financial inclusion, develop
effective strategies, and promote inclusive financial systems that
benefit all segments of society. Collaboration between researchers,
policymakers, financial institutions, and communities will be essential
in overcoming these challenges and advancing the field of financial
inclusion.

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7.2 Scope of Future Research

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The scope of future research in financial inclusion is extensive and
encompasses various dimensions and challenges. Some key areas for
future research include:

1. Digital Financial Services and Technology:

Investigating the impact of digital innovations (such as mobile money,

fintech solutions, blockchain) on enhancing financial inclusion.
Research might focus on understanding the adoption patterns,
usability, and effectiveness of these technologies in reaching
underserved populations.

2. Behavioral Economics and Financial Decision-Making:

Exploring behavioral biases, preferences, and decision-making
processes affecting financial behavior. Understanding these factors
can help design interventions and products that better align with
individuals' financial needs and behaviors.

3. Gender Inclusion in Finance:

Research examining the gender gap in financial inclusion, including

women's access to and usage of financial services. Understanding the
specific challenges faced by women and developing gender-sensitive
approaches to financial inclusion is crucial.

4. Rural and Remote Access:

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Addressing the challenges of financial access in rural and remote
areas. Research might focus on assessing innovative delivery
channels, infrastructure needs, and the impact of geographical
isolation on financial inclusion.

5. Policy Evaluation and Impact Assessment:

Evaluating the effectiveness of financial inclusion policies, regulatory

frameworks, and interventions. Assessing the impact of government
initiatives and regulations on expanding access to financial services
across different demographics and regions.

6. Financial Literacy and Education:

Studying the role of financial literacy programs in improving financial

inclusion. Research might focus on evaluating the effectiveness of
education initiatives in enhancing people's understanding of financial
products and services.

7. Sustainability and Long-term Impact:

Investigating the sustainability of financial inclusion initiatives and

their long-term impact on poverty reduction, economic empowerment,
and social development.

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8. Measurement and Metrics:

Developing comprehensive and standardized metrics to assess and

measure financial inclusion consistently across different contexts and
populations. Enhancing measurement tools can facilitate better
comparisons and evaluations.

9. Partnerships and Collaborations:

Studying successful public-private partnerships and collaborations in

promoting financial inclusion. Understanding how different
stakeholders can work together effectively to bridge gaps in financial
access.

10. Ethical and Legal Considerations:

Exploring the ethical implications of data collection, privacy concerns,

and the responsible use of personal financial information in research
and financial inclusion initiatives.

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Future research in financial inclusion requires interdisciplinary
collaboration, innovative methodologies, and a focus on real-world
impacts. By addressing these research areas, scholars, policymakers,
and practitioners can contribute to developing more inclusive financial
systems that empower individuals, reduce inequalities, and foster
economic growth and stability.

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 8. Bibliography

 Mehta L, Jindal S and singh K (2015),” financial inclusion in India:

shifting the base towards crowning glory”, Arabian journal of
business and management review

 Reserve Bank of India (RBI). Data Releases.

https://www.rbi.org.in/Scripts/ Statistics.aspx statistical database

 2014b. Report of the Committee on Comprehensive Financial

Services for Small Businesses and Low Income. Mumbai. India.
Mumbai

 2015. RBI Grants “In-Principle” Approval to 10 Applicants for

Small Finance Banks. Press

 Vishwanathan, N. S. 2014. Non-Banking Financial Company-

Micro Finance Institutions

 (NBFC-MFIs)—Directions—Modifications in “Pricing of Credit.”

http://rbi.org.in/ scripts/NotificationUser.aspx?Id=8734&Mode=0

 Akhil Damodaran (2013),” Financial Inclusion: Issues and

Challenges.

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 Paramjit sujlana, chhavi kiran(2018),”A study on status of financial
inclusion in India”, International Journal of Management Studies

 Dr Anupama Rawat, Dr Tanima Dutta,” Economic Development

and Women: Role Played by Financial Inclusion
 Other printed materials and reference books for thorough study and
understanding.
 World report.

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  9. Appendix – Questionnaires

Creating a questionnaire to assess financial inclusion involves careful

consideration of the research objectives, the specific aspects of
financial inclusion you want to measure, and the target population.
Here is a general guideline on how you might structure a
questionnaire:

 Demographic Information:
 Age, gender, education level, income, employment status, location,
etc. This information helps in segmenting and analyzing responses
based on different demographics.

 Access to Financial Services:

1. Questions to assess access to various financial services like savings
accounts, credit facilities, insurance, pensions, etc.
2. How frequently they use these services.
3. Reasons for not having access to certain financial services if
applicable.

 Usage Patterns:

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1. How individuals use financial services: savings habits, borrowing
behavior, types of transactions made, etc.
2. Preference for traditional banking or digital/online financial
services.

 Awareness and Understanding:

1. Awareness about different financial products and services
available.
2. Understanding of financial concepts like interest rates, inflation,
risk diversification, etc.

 Barriers to Access:
1. Identify perceived barriers to accessing financial services (e.g.,
distance to banks, documentation requirements, financial literacy,
trust in financial institutions, etc.).

 Financial Goals and Needs:

1. Individual or household financial goals.
2. Specific financial needs they feel are not met.

 Satisfaction and Feedback:

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1. Satisfaction level with current financial services.
2. Suggestions or feedback to improve access and services.
 Behavioral and Attitudinal Aspects:
1. Attitudes towards saving, borrowing, investing, and financial
planning.
2. Perceptions about the importance of financial services in improving
their lives.

 Impact of Financial Inclusion:

1. Questions assessing how access to financial services has impacted
their lives, livelihoods, and economic stability.

 Other Factors:
1. Cultural or societal factors that might influence financial behaviors.
2. Any specific programs or interventions they find helpful in
promoting financial inclusion.

When developing a questionnaire, it's crucial to pilot-test it with a

small group to identify any ambiguities, biases, or issues with the
questions. Adjustments can be made based on the feedback received
during the pilot study.

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Additionally, considering the sensitivity of financial information,
ensure confidentiality and clearly communicate the purpose of the
questionnaire to participants. Ethical considerations should be
followed while collecting and using the data obtained through the
questionnaire.

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