South Asian Journal of Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Bank-Led Financial Inclusion and Human Development:Evidence from India


Affiliations
1 Department of Commerce, Guru Nanak Dev University (GNDU), Grand Trunk Road, Off National Highway No. 1, Amritsar 143005, Punjab, India
     

   Subscribe/Renew Journal


Financial inclusion and equality of finance are topical on the agenda of ‘inclusive growth’, especially in a class inequality smitten country like India. With this backdrop, the study proposes an Index of Financial Inclusion (IFI) and uses it to examine the magnitude and spread of financial inclusion in 25 states, 4 Union Territories (UTs), and 6 geographic regions of the country. It also examines the nature and extent of its relationship with the level of human development for the year 2007-08; and further proposes a modified and financial inclusion incorporated measure of human development. The results indicate high financial inclusion in Chandigarh, Delhi and Goa throughout the period of the study. The states of the Southern region of the country reflect the maximum progression in financial inclusion. On the flip side, the North-Eastern region of the country, along with its constituent states exhibits a tremendously poor stance of inclusion. With the exception of these (North-Eastern) states, financial inclusion and human development are noted to be highly correlated. Additionally, financial inclusion (IFI), prosperity of states (Per Capita Net State Domestic Product) and Human Development Index (HDI) reflect a tandem movement with each other. Equality of access to finance is imperative to ensure human development, thus, financial inclusion should also be considered as a dimension of social/human development.

Keywords

Financial Access, Financial Inclusion, Human Development Index (HDI), Index of Financial Inclusion (IFI), India.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Agrawal, A. (2008, March). The need for financial inclusion with an Indian perspective. Mumbai, India: IDBI Gilts Limited. Retrieved from http://sites.google.com/site/amolagr/TheneedforFinancialInclusionwithanIn.pdf

  • Ambarkhane, D., Singh, A. S., &Venkataramani, B. (2016). Measuring Financial Inclusion of Indian States. International Journal of Rural Management, 12(1), 72-100.

  • Anderloni, L., Bayot, B., Bledowski, P., Iwanicz-Drozdowska, M., & Kempson, E. (2008). Financial Services Provision and Prevention of Financial Exclusion. Brussels, Belgium: European Commission.

  • Arashiro, Z. (2010). Financial Inclusion in Australia: Toward Transformation Policy (Social Policy Working Paper No. 13).Melbourne, Australia: Brotherhood of St Laurence and Centre for Public Policy. Retrieved fromhttp://library.bsl.org.au/showitem.php?handle=1/196

  • Arora, R. U. (2010). Measuring Financial Access (Griffith Business School Discussion Paper No. 2010-07). Nathan, Australia: Griffith University. Retrieved from https://www120.secure.griffith.edu.au/research/file/fd0408e2-75c5-c430-ea2d-2fe7274a467f/1/2010-07-measuring-financial-access.pdf

  • Bagli, S., & Dutta, P. (2012). A study of financial inclusion in India. Radix International Journal of Economics & Business Management, 1(8), 1-18.

  • Beck, T., Demirguc-Kunt, A., & Peria, M. S. M. (2007). Reaching out: Access to and use of banking services across countries. Journal of Financial Economics, 85(1), 234-266.

  • Bihari, S. C. (2011). Growth through financial inclusion in India. Journal of International Business Ethics, 4(1), 28-25.

  • Cabral, H. J. (2008). Multiple comparisons procedures.Circulation, 117(5), 698-701.

  • Chakravarty, S. R., & Pal, R. (2010). Measuring Financial Inclusion: An Axiomatic Approach. Mumbai: Indira Gandhi Institute of Development Research.

  • Census of India (1991). Primary Census Abstract. Retrieved from http://www.censusindia.gov.in/DigitalLibrary/Archive_home.aspx

  • Census of India (2001). Primary Census Abstract. Retrieved from http://www.censusindia.gov.in/DigitalLibrary/Archive_home.aspx

  • Census of India (2011). Primary Census Abstract. Retrieved from http://www.censusindia.gov.in/DigitalLibrary/Archive_home.aspx

  • Chattopadhyay, S. K. (2011). Financial Inclusion in India: A Case-study of West Bengal (No. WPSDEPR: 8/2011). Mumbai, India: Reserve Bank of India.

  • CRISIL (2013). CRISIL Inclusix: An Index to Measure India’s Progress on Financial Inclusion. Mumbai, India: CRISIL. Retrieved from www.crisil.com/pdf/corporate/CRISIL-Inclusix

  • Dacanay, J. C., Nito, B., & Buensuceso, P. (2011, July). Microfinance, Financial Inclusion and Financial Development: An Empirical Investigation with an International Perspective. Paper presented at the International Conference on Managing Services in the Knowledge Economy.

  • Demirgüç-Kunt, A., & Klapper, L. F. (2012). Measuring Financial Inclusion: The Global Index Database (6025). Washington, DC: The World Bank Group.

  • Dev, S. M. (2013). India Development Report, 2012-2013. Oxford, UK: Oxford University Press.

  • FérezBlando, S. C. (2013). Linking financial inclusion and development. Retrieved from www.ucm.es/eco-internacionalydesarrollo

  • Fernando, N. A. (2007). Low-income households’ access to financial services: international experience, measures for improvement, and the future. Manilla, Philippines: Asian Development Bank.

  • Gupte, R., Venkataramani, B., & Gupta, D. (2012). Computation of financial inclusion index for India. Procedia-Social and Behavioral Sciences, 37, 133-149.

  • HM Treasury (2004). Promoting Financial Inclusion. London, UK: Author.

  • Honohan, P. (2008). Cross country variation in household access to financial services. Journal of Banking and Finance, 32(11), 2493-2500.

  • Kelkar, V. (2008). Financial inclusion for inclusive growth. ASCI Journal of Management, 39(1), 55-68.

  • Kempson, E., & Whyley, C. (1999a). Kept Out or Opted out? Understanding and Combating Financial Exclusion. Bristol, UK: Policy Press.

  • Kempson, E., & Whyley, C. (1999b). Understanding and combating financial exclusion. Insurance Trends, 21, 18-22.

  • Kempson, E., Atkinson, A., & Pilley, O. (2004). Policy Level Response to Financial Exclusion in Developed Economies: Lessons for Developing Countries. Bristol, UK: Personal Finance Research Centre.

  • Kodan, A. S. & Chhikara, K. S. (2013). A theoretical and quantitative analysis of financial inclusion and economic growth. Management and Labour Studies, 38(1 & 2), 103-134.

  • Kuri, P. K., & Laha, D. (2011). Financial inclusion and human development in India: An inter-state analysis. Indian Journal of Human Development, 5(1), 61-77.

  • Leyshon, A., & Thrift, N. (1995). Geographies of financial exclusion: Financial abandonment in Britain and the United States. Transactions of the Institute of British Geographers, 20(3), 312-341.

  • Mehrotra, N., Puhazhendhi, V., Nair, G., & Sahoo, B. (2009). Financial inclusionan Overview (Occasional Paper No. 48). Mumbai, India: National Bank for Agriculture and Rural Development (NABARD).

  • Montenegro, A. (2004). An economic development index. Retrieved from http://129.3.20.41/eps/dev/papers/0404/0404010.pdf.

  • Prusty, R., Tanna, J. J., Desai, M. & Bansal Sr., A. (2011). Financial inclusion in India: An inter-state analysis. ShodhDristi, 2(3), 31-41.

  • Rahim, N., Wan, K., & Franceschelli, M. (2009). Financial inclusion amongst new migrants in Northern Ireland: A literature review. London, UK: Information Centre about Asylum and Refugees (ICAR), City University. Retrieved from http://icar.livingrefugeearchive.org/Financial%20Inclusion%20Literature%20Review%20ICAR%202009.pdf

  • Reserve Bank of India (RBI). (1995a). Basic statistical returns of scheduled commercial banks (1994-95). Mumbai, India: Author.

  • RBI (1995b). Handbook of Statistics of Indian Economy (1994-95). Mumbai, India: Author.

  • RBI (2004a). Basic Statistical Returns of Scheduled Commercial Banks (2003-04). Mumbai, India: Author.

  • RBI (2004b). Handbook of Statistics of Indian Economy (2003-04). Mumbai, India: Author.

  • RBI (2008a). Report of the Committee on Financial Inclusion. Mumbai, India: Author.

  • RBI (2008b). Report on Currency and Finance. Mumbai, India: Author.

  • RBI (2012). Report on Trend and Progress of Banking in India, 2010-11. Mumbai, India: Author.

  • RBI (2013). Report on Trend and Progress of Banking in India, 2011-12. Mumbai, India: Author.

  • RBI (2014a). Handbook of Statistics of Indian Economy (2013-14). Mumbai, India: Author.

  • RBI (2014b). Report on Trend and Progress of Banking in India, 2012-13. Mumbai, India: Author.

  • RBI (2015a). Basic Statistical Returns of Scheduled Commercial Banks (2013-14). Mumbai, India: Author.

  • RBI (2015b). Report on Trend and Progress of Banking in India, 2013-14. Mumbai, India: Author.

  • Rovai, A. P., Baker, J. D., & Ponton, M. K. (2014). Social science research design and statistics:A practitioner’s guide to research methods and IBM SPSS analysis. Chesapeake, VA: Watertree Press LLC.

  • Sangwan, S. S. (2013). State Wise Comparison of Financial Inclusion in India. Chandigarh, India: Centre for Research in Rural and Industrial Development.

  • Sankaramuthukumar, S., & Alamelu, K. (2012). Financial inclusion: African scenario. Insight on Africa, 4(2), 121-135.

  • Sarma, M. (2008). Index of Financial Inclusion. New Delhi, India: Indian Council for Research on International Economic Relations.

  • Sarma, M. (2010). Index of Financial Inclusion (Discussion Paper No. 10-05). New Delhi, India: Centre for International Trade and Development (CITD), Jawaharlal Nehru University.

  • Sarma, M. (2012). Index of Financial Inclusion – A Measure of financial sector inclusiveness (Working Paper No. 07/2012).New Delhi, India: Centre for International Trade and Development (CITD), Jawaharlal Nehru University.

  • Sarma, M., &Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613-628.

  • Sinclair, S. P. (2001). Financial Exclusion: An Introductory Survey. Edinburgh: UK Center for Research into Socially Inclusive Services (CRSIS), Edinburgh College of Art/Heriot Watt University.

  • UNDP (2014). Human Development Report 2014. New York: UNDP. Retrieved October 1, 2015, from www.hdr.undp.org/en/content/human-development-report-2014

  • United Nations (2006). Building Inclusive Financial Sectors for Development. New York, NY: Author.

  • World Bank (2008). Access to Finance and Development: Theory and Measurement. Washington, DC: World Bank.

  • World Bank (n.d.) Financial Inclusion: Overview. Washington DC: The World Bank Group. Retrieved from http://www.worldbank.org/en/topic/financialinclusion/overview

  • Yorulmaz, R. (2013). Construction of a regional financial inclusion index in Turkey. Journal of BRSA Banking and Financial Markets, 7(1), 79-101.


Abstract Views: 229

PDF Views: 0




  • Bank-Led Financial Inclusion and Human Development:Evidence from India

Abstract Views: 229  |  PDF Views: 0

Authors

Kajole Nanda
Department of Commerce, Guru Nanak Dev University (GNDU), Grand Trunk Road, Off National Highway No. 1, Amritsar 143005, Punjab, India
Mandeep Kaur
Department of Commerce, Guru Nanak Dev University (GNDU), Grand Trunk Road, Off National Highway No. 1, Amritsar 143005, Punjab, India

Abstract


Financial inclusion and equality of finance are topical on the agenda of ‘inclusive growth’, especially in a class inequality smitten country like India. With this backdrop, the study proposes an Index of Financial Inclusion (IFI) and uses it to examine the magnitude and spread of financial inclusion in 25 states, 4 Union Territories (UTs), and 6 geographic regions of the country. It also examines the nature and extent of its relationship with the level of human development for the year 2007-08; and further proposes a modified and financial inclusion incorporated measure of human development. The results indicate high financial inclusion in Chandigarh, Delhi and Goa throughout the period of the study. The states of the Southern region of the country reflect the maximum progression in financial inclusion. On the flip side, the North-Eastern region of the country, along with its constituent states exhibits a tremendously poor stance of inclusion. With the exception of these (North-Eastern) states, financial inclusion and human development are noted to be highly correlated. Additionally, financial inclusion (IFI), prosperity of states (Per Capita Net State Domestic Product) and Human Development Index (HDI) reflect a tandem movement with each other. Equality of access to finance is imperative to ensure human development, thus, financial inclusion should also be considered as a dimension of social/human development.

Keywords


Financial Access, Financial Inclusion, Human Development Index (HDI), Index of Financial Inclusion (IFI), India.

References