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The Vicious Circle of Financial Exclusion: An Empirical Study in West Bengal


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1 Assistant Professor, Department of Economics and Quantitative Techniques, International School of Business Kolkata, PTI Building, 8th Floor, Block-DP 9, Sector- 5, Kolkata - 700 091, India

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Despite many efforts in the last twenty years, access to finance has remained scarce in rural India. Inadequate access to financial services is considered one of the main reasons behind inadequate economic opportunity and abject poverty in the developing countries. The present study is a research conducted among rural households in Howrah and Murshidabad districts of West Bengal. The main aim of this paper is to explore the various factors behind financial exclusion in West Bengal. The principal sources for financial exclusion are generated from the demand side and supply side factors. The study is essentially based on primary data captured through a structured questionnaire and was administered to a total of 150 respondents. In order to find out the causes behind the financial exclusion inside the demand and supply related factors, binary logistic regression method was considered to be appropriate. The results of the analysis suggess that from the demand side, income of the households, awareness, and education have a significant role on financial exclusion. From the supply side, cumbersome documentation process has a marginal effect on it. Thus, appropriate policies are required to solve these problems.

Keywords

Awareness, Credit Programme, Financial Exclusion, Institutional Credit, Logistic Regression

E32, G21, O16

Paper Submission Date : May 2, 2013 ; Paper sent back for Revision : September 12, 2013 ; Paper Acceptance Date : September 30, 2013.

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  • The Vicious Circle of Financial Exclusion: An Empirical Study in West Bengal

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Authors

Rabin Mazumder
Assistant Professor, Department of Economics and Quantitative Techniques, International School of Business Kolkata, PTI Building, 8th Floor, Block-DP 9, Sector- 5, Kolkata - 700 091, India

Abstract


Despite many efforts in the last twenty years, access to finance has remained scarce in rural India. Inadequate access to financial services is considered one of the main reasons behind inadequate economic opportunity and abject poverty in the developing countries. The present study is a research conducted among rural households in Howrah and Murshidabad districts of West Bengal. The main aim of this paper is to explore the various factors behind financial exclusion in West Bengal. The principal sources for financial exclusion are generated from the demand side and supply side factors. The study is essentially based on primary data captured through a structured questionnaire and was administered to a total of 150 respondents. In order to find out the causes behind the financial exclusion inside the demand and supply related factors, binary logistic regression method was considered to be appropriate. The results of the analysis suggess that from the demand side, income of the households, awareness, and education have a significant role on financial exclusion. From the supply side, cumbersome documentation process has a marginal effect on it. Thus, appropriate policies are required to solve these problems.

Keywords


Awareness, Credit Programme, Financial Exclusion, Institutional Credit, Logistic Regression

E32, G21, O16

Paper Submission Date : May 2, 2013 ; Paper sent back for Revision : September 12, 2013 ; Paper Acceptance Date : September 30, 2013.