Financial Inclusion: Issues and Challenges in India

Financial inclusion is important for improving the living conditions of poor farmers, rural non-farm enterprises and other vulnerable groups. Financial exclusion, in terms lack of access to credit from formal institutions, is high for small and marginal farmers and some social groups. For developing nations the era is of inclusive growth and the key to inclusive growth is financial inclusion. Financial inclusion or inclusive financing is the delivery of financial services, at affordable costs, to sections of vulnerable and low income segments of society. There have been many formidable challenges in the financial inclusion area such as bridging the gap between the sections of society that are financially excluded within the ambit of the formal financial system, providing financial literacy and strengthening credit delivery mechanisms so as to improvise the financial economic growth. A nation can grow economically and socially, if its weakest section can turn out to be financially independent. This paper highlights the basic features of financial inclusion, and its need for social and economic development of the society. The study focuses on the role of financial inclusion, in strengthening India's position in relation to other economy. For analyzing such facts, data for the study has been gathered through secondary sources, including report of RBI, NABARD, books on financial inclusion and other articles written by eminent authors. After analyzing the facts and figures it can be concluded that undoubtedly financial inclusion is playing a catalystic role in the economic and social development of society but still there is a long road ahead to achieve the desired outcomes.