100% Financial Inclusion: Access and Usage

CMF Research Associate: Minakshi Ramji
Project Publication: Financial Inclusion in Gulbarga: Finding Usage in Access (January 2009)

Research tells us that an inclusive financial system, one that allows broader access to financial services, can lead to faster and more equitable growth. Such a system allows poor households to save and manage their money securely, decreases their vulnerability to economic shocks and allows them to contribute more actively to their development. Increasingly, with the proliferation of microfinance initiatives, there is evidence that inclusive financial systems can empower poor households socially as well.

In India, the drive for financial inclusion, initiated by the Reserve Bank of India, has thus far involved ensuring access to at least one zero minimum-balance ‘no frills’ savings bank account to every household. In this context, at least one district in each state has been brought under the purview of this drive with public sector banks in the region taking the lead to open at least one bank account per family in the district.

This project seeks to understand the process by which a household becomes financially included. Further, it will explore how this process is perceived by ‘banked’ and ‘unbanked’ households, whether being financially included results in usage of newly offered financial services and affects financial behaviour, with specific reference to the financial inclusion drive by RBI in twenty-five villages in Gulbarga district in Karnataka.

This study should be of particular importance to banks, policy makers and development practitioners alike. For policymakers, it will demonstrate the on-the-ground results of the current policies and provide evidence that will inform future policies. In the case of financial institutions, this information will facilitate the design of appropriate products that are demand-driven. In the case of microfinance institutions, the evidence herein may help them increase outreach and hence, financial viability.

See Some CMF Related Documents:
# Financial Inclusion Drive (Eye on Microfiance, Issue 6)

# Financial Inclusion Data [zip 370 KB]