Background/Objectives: The purpose of this present study is to introduce the financial inclusion index at the household level and compare the inclusiveness of the Kadmat Island of Lakshadweep.
Methods/Statistical Analysis: Based on the primary data collected from 100 households a separate financial inclusion index was composed in two dimensions and incorporated into a single index using the scoring and weighted average method. This unique index can be used to compare the inclusiveness of the financial sector across the households of any Island economy.
Findings: The entire households attained maximum financial inclusions in terms of provision of the financial services while there is greatest variation of demand of it. The extent of the financial inclusion also differed among the various households with regards to socio-economic and cultural factors. The monopolistic financial service provider of the Island limits the quality of services offered to the Island households. The financial inclusion index is relatively higher in the households of government employees when compared with fisherman. But in terms of access to financial services like net banking, share trading, access to unified payment services reveals no variations.
Applications and Improvement: The methodology adopted in this study can be applied to any measure the financial inclusion across any households of any regions by altering the regional specific independent variables.