Indian Journal of Finance

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Antecedents and Extent of Financial Inclusion : A Cross-Sectional Study


Affiliations
1 Ph.D. & Independent Researcher, Motilal Nehru National Institute of Technology, Allahabad, Prayagraj - 211 004, Uttar Pradesh, India
2 Associate Professor, Institute of Technology and Sciences, Ghaziabad - 201 007, Uttar Pradesh, India

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According to the latest study by World Bank on financial inclusion, globally 31% of people are excluded from access to formal financial services. But despite growth in account ownership, inequality persists. The objective of the present study was to examine the current status of financial inclusion and to further explore the factors leading towards the lower level of financial access among the households. The study was conducted in four districts of the National Capital Region in India namely, Ghaziabad, Noida, Gurugram, and Faridabad, with a sample size of 300 respondents between the period of 2018 – 2019. The study is unique in nature, as the survey was conducted both in rural and urban areas. The factor analysis technique was applied to explore a large set of variables into few factors affecting the financial inclusion. Further, the households were grouped into three degrees on the basis of their financial behavior and attitude. Finally, the study concluded that supply-side and demand-side factors were the main factors for the lower access to basic banking services. Furthermore, financial attitude, financial knowledge, and financial behavior were the factors shaping the minds of the respondents. The results revealed that majority of the respondents fell under Degree 1, that is, having access to banking products, but their level of financial literacy and active usage of bank accounts was significantly low. Therefore, it is concluded that though a sufficient number of people had a formal bank account, there existed a low level of financial literacy due to which they were not active users of financial services.

Keywords

Financial Inclusion, Economic Development, Financial Access, Commercial Banks, RBI.

JEL Classification : I3, O1, O16.

Paper Submission Date : April 13, 2020; Paper Sent Back for Revision : September 11, 2020; Paper Acceptance Date : November 12, 2020; Paper Published Online : March 15, 2021.

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  • Antecedents and Extent of Financial Inclusion : A Cross-Sectional Study

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Authors

Priyanka Tandon
Ph.D. & Independent Researcher, Motilal Nehru National Institute of Technology, Allahabad, Prayagraj - 211 004, Uttar Pradesh, India
Anurag Bhadur Singh
Associate Professor, Institute of Technology and Sciences, Ghaziabad - 201 007, Uttar Pradesh, India

Abstract


According to the latest study by World Bank on financial inclusion, globally 31% of people are excluded from access to formal financial services. But despite growth in account ownership, inequality persists. The objective of the present study was to examine the current status of financial inclusion and to further explore the factors leading towards the lower level of financial access among the households. The study was conducted in four districts of the National Capital Region in India namely, Ghaziabad, Noida, Gurugram, and Faridabad, with a sample size of 300 respondents between the period of 2018 – 2019. The study is unique in nature, as the survey was conducted both in rural and urban areas. The factor analysis technique was applied to explore a large set of variables into few factors affecting the financial inclusion. Further, the households were grouped into three degrees on the basis of their financial behavior and attitude. Finally, the study concluded that supply-side and demand-side factors were the main factors for the lower access to basic banking services. Furthermore, financial attitude, financial knowledge, and financial behavior were the factors shaping the minds of the respondents. The results revealed that majority of the respondents fell under Degree 1, that is, having access to banking products, but their level of financial literacy and active usage of bank accounts was significantly low. Therefore, it is concluded that though a sufficient number of people had a formal bank account, there existed a low level of financial literacy due to which they were not active users of financial services.

Keywords


Financial Inclusion, Economic Development, Financial Access, Commercial Banks, RBI.

JEL Classification : I3, O1, O16.

Paper Submission Date : April 13, 2020; Paper Sent Back for Revision : September 11, 2020; Paper Acceptance Date : November 12, 2020; Paper Published Online : March 15, 2021.


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DOI: https://doi.org/10.17010/ijf%2F2021%2Fv15i3%2F158129