Impact of financial inclusion towards socio economic development of rural India

commerce

Abstract Financial inclusion is essential for improving the living conditions of rural masses, rural nonfarm enterprises and other vulnerable sectors. The basic objective is to provide financial services at affordable cost to the marginalized and disadvantaged segments of the society. While the rural people need it the most, rural communities remain the largest unserved market for financial services. Ensuring their financial inclusion can unlock the considerable economic potential of rural areas. Nationalization of banks and subsequent developments led to the expansion of commercial banks, RRBs and Co-operative credit institutions geographically all over India. Banks policy aimed at “social” and “development bonding” by providing credit and financial facilities to agriculture and other priority sectors. Even after 68 years of independence, banking facilities has not reached many rural and unprivileged sectors of the society which led to a financial gap and instability among the rural people. Now Govt. and RBI are formulating various schemes and policies to build financial strength in Rural India through Financial Inclusion. Despite of vast expansion, a large number of group remain excluded from the “opportunities and services” provided by the financial sector. Such excluded groups consist of small and marginal farmers, women, unorganized sector workers including artisans, self-employed and pensioners. Against this background, the objective of this paper is to bring out issues and challenges for reducing financial exclusion. In this paper the researchers has attempted to highlight the factors, significance and tracing out challenges of financial inclusion with social and economic development of the rural India.

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