Financial Inclusion:Unshackle the Impediments to Growth

Financial inclusion is the process of provision of financial services to the unbanked section of the society. Developing and underdeveloped nations have innovated and adopted various models through decades for inclusiveness of the unbanked section of the society and achieve inclusive and sustainable growth. “Financial Inclusion” as a term was formally introduced in India in the year 2005. However, Indian government has been working in this regard through decades. In era of 1950-1980, Banks were striving for profitability and Money lenders for higher interest income. Indian Economy at that time was characterized by low investment and saving rate and “Hindu growth rate”. All these factors lead Banks to resort to lending only to the Industrialist and high net worth individual with the expectation of profitability and to avoid assets to turn sour on the other hand moneylender had a greater share in credit disbursement to the rural household. Indian government has since then adopted series of reforms to boost inclusiveness of unbanked population of the economy. Present study attempts to explain policy measures adopted by Indian Government for financial inclusion and financial innovations done by various developing countries in this respect.