The Microfinance Review

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Financial Inclusion for Financial Stability: Integration of Financial Literacy and Microfinance


Affiliations
1 Former Learning Head and Assistant General Manager Baroda Academy, Jaipur., India
2 Assistant General Manager (HRM) and Zonal HR HeadBank of Baroda, India
     

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Inequalities in power and wealth translate into unequal opportunities, which lead to a loss of productive potential and increased political instability. Ensuring growth with equity through policies and programmes that foster the participation of the poor in the process of economic growth by creating employment opportunities and increasing their access to income-generating assets, both physical and human, is the dire need of the hour. Financial inclusion by integrating financial literacy and microfinance is one way to empower people to access social and economic justice. Financial inclusion is delivering financial services to all people fairly, transparently, and equitably at an affordable cost through a formal channel. The way forward includes conducive policy issues like adoption of appropriate technology, meaningful collaborations amongst banks, government, regulators, mobile service providers and technology service providers, etc., introduction of innovative product lines and processes, bringing about financial literacy and awareness, customer service and protection, addressing the last mile connectivity problem, delivery by banks, focus on sound-visual-based financial literacy, enhancing the role of panchayat, unique identification numbers, etc. Revamped priority sector guidelines, aimed at ensuring credit access to small and marginal farmers as well as other beneficiaries of microfinance, will lead to a way beyond the present version of financial inclusion.

Keywords

Digitisation, Financial Literacy, Microenterprises, Microfinance
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  • Financial Inclusion for Financial Stability: Integration of Financial Literacy and Microfinance

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Authors

Subah Singh Yadav
Former Learning Head and Assistant General Manager Baroda Academy, Jaipur., India
Dinesh Kumar
Assistant General Manager (HRM) and Zonal HR HeadBank of Baroda, India

Abstract


Inequalities in power and wealth translate into unequal opportunities, which lead to a loss of productive potential and increased political instability. Ensuring growth with equity through policies and programmes that foster the participation of the poor in the process of economic growth by creating employment opportunities and increasing their access to income-generating assets, both physical and human, is the dire need of the hour. Financial inclusion by integrating financial literacy and microfinance is one way to empower people to access social and economic justice. Financial inclusion is delivering financial services to all people fairly, transparently, and equitably at an affordable cost through a formal channel. The way forward includes conducive policy issues like adoption of appropriate technology, meaningful collaborations amongst banks, government, regulators, mobile service providers and technology service providers, etc., introduction of innovative product lines and processes, bringing about financial literacy and awareness, customer service and protection, addressing the last mile connectivity problem, delivery by banks, focus on sound-visual-based financial literacy, enhancing the role of panchayat, unique identification numbers, etc. Revamped priority sector guidelines, aimed at ensuring credit access to small and marginal farmers as well as other beneficiaries of microfinance, will lead to a way beyond the present version of financial inclusion.

Keywords


Digitisation, Financial Literacy, Microenterprises, Microfinance

References