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FINANCIAL INCLUSION
INITIATIVES IN RURAL
INDIA
BY:
DEVENDRA PUNDIR
SAKSHI VASHISHT
SHWETA DIXIT
SURBHI VERMA
SWATI JAIN
November 4, 2021 Wealth and Investment Management TARUN CHOPRA 1
INTRODUCTION
With a huge rural population, that is economically challenged,
Government in India has rolled out many initiatives like
• Marginal farmers
• Landless labor
• Unorganized sector
• Urban slum dwellers
• Migrants
• Ethnic minorities
• Socially excluded groups
• Geographical coverage
5.2% villages are having a bank branch
• Farmers coverage-
Out of 119 million farmers, small and marginal farmers are 97.7 million
(82.1 %)
Unrestrained access to public goods and services is the sine qua non
of an open and efficient society. As banking services are in the
nature of public good, it is essential that availability of banking and
payment services to the entire population without discrimination is
the prime objective of the public policy.
November 4, 2021 Wealth and Investment Management 6
• FI can be thought of in two ways. One is
exclusion from the payments system –i.e. not
having access to a bank account.
•NovemberTotal
4, 2021 AccountsWealth
perand100 persons
Investment Management still too less! 24
EARNER HAVING A BANK ACCOUNT
2007 (Per cent of Total Earners)
• Very low percentage in people having bank accounts in Annual Income less than
Rs.50,000 bracket in urban and rural area
• Even in higher income bracket exclusion exists
November 4, 2021
Source: Report on Currency and Finance 2006-08 (IIMS, 2007)
Wealth and Investment Management 25
SOURCES OF LOAN
(Per cent of Indebted Earners)
• to enable financial
institutions (FIs) to serve
the under-served and the
unbanked sector and also
to service the technology
requirements of entities
engaged in servicing the
bottom of pyramid
customers
November 4, 2021 Wealth and Investment Management 30
Biometric validation of Smart Card & Transaction
Confirmation Receipt
• SBI also hiring tens of thousands of BCs, who use smart cards,
mobile phones and handheld devices to reach the poor and
illiterate with little knowledge of financial services
• From the demand side, the big barriers are the lack of
awareness about financial services and products, limited
literacy, especially financial literacy of the populace, and social
exclusion.
• Many of the generic financial products are unsuitable for the
poor and there is not much of an effort to design products
suitable to their needs
• The unfriendly and unempathetic attitude of the banks to the
customers also plays an important role in undermining the
demand for financial services
• On top of that, exorbitant and often times non-transparent
fees, combined with burdensome terms and conditions
attached to the financial products, also dampens the demand