EVALUATION OF A NATIONAL LEVEL SCHEME FOR UPLIFTING RURAL POPULATION THROUGH FINANCIAL INCLUSION IN A DEVELOPING COUNTRY: EVIDENCES FROM RURAL INDIA
Keywords:
Financial Inclusion, Rural Upliftment, Developing Countries, Program Evaluation.
Abstract
This study aims to understand the factors that encourage the people from rural background to access the banking Services offered under a financial inclusion scheme, with evidences from a developing country, India. Pradhan Mantri Jan Dhan Yojana (PMJDY), scheme launched by Government of India, has an objective of connecting the banking industry with the people residing in the remote areas of the country. The research is aimed to gauge the PMJDY’s accomplishments in terms of fulfilment of its objectives. The research helps in getting a ground level feedback of the financial inclusion schemes’ achievements and issues involved in its successful implementation. This study also explores the perceptions of the individuals regarding the benefits offered by the scheme. A field survey of 2446 respondents was conducted in Purvanchal region of Uttar Pradesh, India. The questionnaire was constructed based on the theoretical model built after an extensive review of literature in the field of financial inclusion. The results from the analysis indicate that the awareness about the scheme and support by authorities are the two major factors that contribute to the successful implementation of a financial inclusion scheme. Overall awareness and availing of banking services under PMJDY scheme has been initiated but not uniformly.
JEL Classification Codes: O10, G20, G21.
References
Aghion, P., & Bolton, P. (1997). A theory of trickle-down growth and development. The Review of Economic Studies, 64(2), 151-172.
Agrawal, A. (2008). The need for financial inclusion with an Indian perspective. Economic Research, 3, 1-10.
Ali, M., Nazir, M. I., Hashmi, S. H., & Ullah, W. (2021). Financial inclusion, institutional quality and financial development: Empirical evidence from OIC countries. The Singapore Economic Review, 1-28.
Allen, F., Demirguc-Kunt, A., Klapper, L., & Peria, M. S. M. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. Journal of financial Intermediation, 27, 1-30.
Aportela, F. (1999). Effects of financial access on savings by low-income people.
Ashraf, N., Karlan, D., & Yin, W. (2010). Female Empowerment: Impact of a Commitment Savings Product in the Philippines, World Development. Pergamon, 38(3), 333–344. https://doi.org/10.1016/j.worlddev.2009.05.010.
Banerjee, A. V., & Newman, A. F. (1993). Occupational choice and the process of development’, Journal of Political Economy, 101(2), 274–298. https://doi.org/10.1086/261876.
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor, J Econ Growth. Springer New York LLC, 12(1), 27–49. https://doi.org/10.1007/s10887-007-9010-6.
Chakravarty, S. R., & Pal, R. (2013). Financial inclusion in India: An axiomatic approach. Journal of Policy Modeling, 35(5), 813–837. https://doi.org/10.1016/j.jpolmod.2012.12.007.
Chhabra, N. (2015). Financial inclusion in India. Maharshi Dayanand University, Rohtak. Retrieved from https://shodhganga.inflibnet.ac.in/handle/10603/36960.
Chowhan, S. S., & Pande, J. C. (2014). Pradhan Mantri Jan Dhan Yojana: A Giant Leap Towards Financial Inclusion, International Journal of Research in Management & Business Studies, 1(4), 19–22. Retrieved from https://www.academia.edu/download/53996699/IRJMBS.pdf
Cull, R., Ehrbeck, T., & Holle., N. (2014) Financial inclusion and development: Recent impact evidence. Retrieved from http://www.cgap.org/sites/default/files/FocusNote-Financial-Inclusion-and-Development-April-2014.pdf.
Dangi, N., & Kumar, P. (2013). Current Situation of Financial Inclusion in India and Its Future Visions’, International Journal of Managment and Social Sciences Research, 2(8), 155–166. Retrieved from http://www.irjcjournals.org/ijmssr/Aug2013/23.pdf.
Demirgüç-Kunt, A., Klapper, L. F., Singer, D., & Van Oudheusden, P. (2015). The global findex database 2014: Measuring financial inclusion around the world. World Bank Policy Research Working Paper, (7255).
Demirgüç-Kunt, A., Honohan, P., & Beck, T. (2008) Finance for all? Policies and Pitfalls in Expanding access, World Bank Policy Research Report. Retrieved from http://125.234.102.146:8080/dspace/handle/DNULIB_52011/4154
Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from a field experiment in kenya, American Economic Journal: Applied Economics, 5(1), 163–192. https://doi.org/10.1257/app.5.1.163.
Ghosh, S., & Vinod, D. (2017). What Constrains Financial Inclusion for Women? Evidence from Indian Micro data, World Development. Elsevier Ltd, 92, 60–81. https://doi.org/10.1016/j.worlddev.2016.11.011.
Gloukoviezoff, G. (2007). From financial exclusion to overindebtedness: The paradox of difficulties for people on low incomes?, in New Frontiers in Banking Services: Emerging Needs and Tailored Products for Untapped Markets. Berlin, 213–245. https://doi.org/10.1007/978-3-540-46498-3_6.
Gounasegaran, C., Kuriakose, F., & Iyer, D. K. (2013). Financial inclusion: Progress so far, facts for you. Banking and Finance. Retrieved from http://www.efymag.com/admin/issuepdf/25-29_Financial Inclusion_Sep-13.pdf.
Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence, World Development. Elsevier Ltd, 111, 84–96. https://doi.org/10.1016/j.worlddev.2018.06.020.
Gutiérrez-Romero, R., & Ahamed, M. (2021). COVID-19 response needs to broaden financial inclusion to curb the rise in poverty, World Development. Elsevier Ltd, 138, 105229. https://doi.org/10.1016/j.worlddev.2020.105229.
Honohan, P. (2004). Financial Development, Growth and Poverty: How Close are the Links?’, in Financial Development and Economic Growth. Palgrave Macmillan UK, 1–37. https://doi.org/10.1057/9780230374270_1.
HR, U., & KN., R. (2013). The Role of SHGS in Financial Inclusion. A Case Study, International Journal of Scientific and Research Publications, 3(6), 1–5. Retrieved from http://www.ijsrp.org/e-journal.html
Joseph, J., & Varghese, T. (2014). Role of Financial Inclusion in the Development of Indian Economy’, Journal of Economics and Sustainable Development, 5(11), 6–15. Retrieved from https://core.ac.uk/reader/234646410.
Kumar, C., & Mishra, S. (2011). Banking Outreach and Household level Access : Analyzing Financial Inclusion in India, 13th Annual Conference on Money and Finance, 1–33.
Leeladhar, S. (2006). Taking Banking Services to the Common Man - Financial Inclusion, Reserve Bank of India Bulletin, 9519, 73–77. Retrieved from https://rbidocs.rbi.org.in/rdocs/bulletin/pdfs/68236.pdf
Mialou, A., Amidzic, G., & Massara, A. (2017). Assessing Countries’ Financial Inclusion Standing — A New Composite Index’, Journal of Banking and Financial Economics, 2(8), 105–126. https://doi.org/10.7172/2353-6845.jbfe.2017.2.5.
Mohan, B. (2014). Pradhan Manti Jan Dhan Yojana (PMJDY): Features, Needs And Challenges, International Journal of Marketing, Financial Services & Management Research, 2277–3622.
Mukherjee, A., & Chakraborty, S. (2012). Financial Inclusion of the poor and Marginalised in Jharkhand: Analysis of the Existing Model. International Journal on Research and Development-A Management Review, 1(1). Retrieved from https://papers.ssrn.com/abstract=2169673 (Accessed: 31 January 2021).
Paramasivan, C., & Ganeshkumar, V. (2013). w of Financial Inclusion in India, International Journal of Manage-ment and Development Studies, 2(3), 45–49.
PMJDY (2020). Pradhan Mantri Jan-Dhan Yojana| Department of Financial Services Ministry of Finance, Government website. Retrieved from https://www.pmjdy.gov.in/account
Ramji, M. (2009). Financial inclusion in Gulbarga: Finding usage in access, ifmrlead.org. 26. Retrieved from http://ifmr.ac.in/cmf.
Reserve Bank of India (2015). Reserve Bank of India - Reports, RBI report. Retrieved from https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?ID=836#CH1
Sarma, M. (2008). Index of financial inclusion (No. 215). Working paper.
Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of international development, 23(5), 613-628. https://doi.org/10.1002/jid.1698.
Sen, A. (2000). SOCIAL EXCLUSION: CONCEPT, APPLICATION, AND SCRUTINY. Retrieved from https://www.think-asia.org/handle/11540/2339
Shylendra, H. S. (2006). Microfinance Institutions in Andhra Pradesh’, Economic and Political Weekly, 1959–1963. Retrieved from https://www.jstor.org/stable/4418232
Singh, C., Mittal, A., Garg, R., Goenka, A., Goud, R., Ram, K., ... & Kumar, U. (2014). Financial inclusion in India: Select issues. IIM Bangalore research paper, (474).
Sriram, M. S. (2012). The AP microfinance crisis 2010: discipline or death?, Vikalpa, 37(4), 113–128.
Sriram, M., & Sundaram, N. (2015). Financial Inclusion Index: A Customized Regional Model with Reference to Economically Most Backward Districts of Tamil Nadu, India, print) Mediterranean Journal of Social Sciences, 6, 2039–2117. https://doi.org/10.5901/mjss.2015.v6n6p209.
Suryanarayana, M. H. (2008). What Is Exclusive about’Inclusive Growth’?, Economic and Political Weekly, 93–101. Retrieved from https://www.jstor.org/stable/40278108
Swamy, V. (2014). Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households, World Development. Pergamon, 56, 1–15. https://doi.org/10.1016/j.worlddev.2013.10.019.
The World Bank (TWB) (2020). Population, total - India | Data’, The World Bank. Retrieved from https://data.worldbank.org/indicator/SP.POP.TOTL?locations=IN
Agrawal, A. (2008). The need for financial inclusion with an Indian perspective. Economic Research, 3, 1-10.
Ali, M., Nazir, M. I., Hashmi, S. H., & Ullah, W. (2021). Financial inclusion, institutional quality and financial development: Empirical evidence from OIC countries. The Singapore Economic Review, 1-28.
Allen, F., Demirguc-Kunt, A., Klapper, L., & Peria, M. S. M. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. Journal of financial Intermediation, 27, 1-30.
Aportela, F. (1999). Effects of financial access on savings by low-income people.
Ashraf, N., Karlan, D., & Yin, W. (2010). Female Empowerment: Impact of a Commitment Savings Product in the Philippines, World Development. Pergamon, 38(3), 333–344. https://doi.org/10.1016/j.worlddev.2009.05.010.
Banerjee, A. V., & Newman, A. F. (1993). Occupational choice and the process of development’, Journal of Political Economy, 101(2), 274–298. https://doi.org/10.1086/261876.
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor, J Econ Growth. Springer New York LLC, 12(1), 27–49. https://doi.org/10.1007/s10887-007-9010-6.
Chakravarty, S. R., & Pal, R. (2013). Financial inclusion in India: An axiomatic approach. Journal of Policy Modeling, 35(5), 813–837. https://doi.org/10.1016/j.jpolmod.2012.12.007.
Chhabra, N. (2015). Financial inclusion in India. Maharshi Dayanand University, Rohtak. Retrieved from https://shodhganga.inflibnet.ac.in/handle/10603/36960.
Chowhan, S. S., & Pande, J. C. (2014). Pradhan Mantri Jan Dhan Yojana: A Giant Leap Towards Financial Inclusion, International Journal of Research in Management & Business Studies, 1(4), 19–22. Retrieved from https://www.academia.edu/download/53996699/IRJMBS.pdf
Cull, R., Ehrbeck, T., & Holle., N. (2014) Financial inclusion and development: Recent impact evidence. Retrieved from http://www.cgap.org/sites/default/files/FocusNote-Financial-Inclusion-and-Development-April-2014.pdf.
Dangi, N., & Kumar, P. (2013). Current Situation of Financial Inclusion in India and Its Future Visions’, International Journal of Managment and Social Sciences Research, 2(8), 155–166. Retrieved from http://www.irjcjournals.org/ijmssr/Aug2013/23.pdf.
Demirgüç-Kunt, A., Klapper, L. F., Singer, D., & Van Oudheusden, P. (2015). The global findex database 2014: Measuring financial inclusion around the world. World Bank Policy Research Working Paper, (7255).
Demirgüç-Kunt, A., Honohan, P., & Beck, T. (2008) Finance for all? Policies and Pitfalls in Expanding access, World Bank Policy Research Report. Retrieved from http://125.234.102.146:8080/dspace/handle/DNULIB_52011/4154
Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from a field experiment in kenya, American Economic Journal: Applied Economics, 5(1), 163–192. https://doi.org/10.1257/app.5.1.163.
Ghosh, S., & Vinod, D. (2017). What Constrains Financial Inclusion for Women? Evidence from Indian Micro data, World Development. Elsevier Ltd, 92, 60–81. https://doi.org/10.1016/j.worlddev.2016.11.011.
Gloukoviezoff, G. (2007). From financial exclusion to overindebtedness: The paradox of difficulties for people on low incomes?, in New Frontiers in Banking Services: Emerging Needs and Tailored Products for Untapped Markets. Berlin, 213–245. https://doi.org/10.1007/978-3-540-46498-3_6.
Gounasegaran, C., Kuriakose, F., & Iyer, D. K. (2013). Financial inclusion: Progress so far, facts for you. Banking and Finance. Retrieved from http://www.efymag.com/admin/issuepdf/25-29_Financial Inclusion_Sep-13.pdf.
Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence, World Development. Elsevier Ltd, 111, 84–96. https://doi.org/10.1016/j.worlddev.2018.06.020.
Gutiérrez-Romero, R., & Ahamed, M. (2021). COVID-19 response needs to broaden financial inclusion to curb the rise in poverty, World Development. Elsevier Ltd, 138, 105229. https://doi.org/10.1016/j.worlddev.2020.105229.
Honohan, P. (2004). Financial Development, Growth and Poverty: How Close are the Links?’, in Financial Development and Economic Growth. Palgrave Macmillan UK, 1–37. https://doi.org/10.1057/9780230374270_1.
HR, U., & KN., R. (2013). The Role of SHGS in Financial Inclusion. A Case Study, International Journal of Scientific and Research Publications, 3(6), 1–5. Retrieved from http://www.ijsrp.org/e-journal.html
Joseph, J., & Varghese, T. (2014). Role of Financial Inclusion in the Development of Indian Economy’, Journal of Economics and Sustainable Development, 5(11), 6–15. Retrieved from https://core.ac.uk/reader/234646410.
Kumar, C., & Mishra, S. (2011). Banking Outreach and Household level Access : Analyzing Financial Inclusion in India, 13th Annual Conference on Money and Finance, 1–33.
Leeladhar, S. (2006). Taking Banking Services to the Common Man - Financial Inclusion, Reserve Bank of India Bulletin, 9519, 73–77. Retrieved from https://rbidocs.rbi.org.in/rdocs/bulletin/pdfs/68236.pdf
Mialou, A., Amidzic, G., & Massara, A. (2017). Assessing Countries’ Financial Inclusion Standing — A New Composite Index’, Journal of Banking and Financial Economics, 2(8), 105–126. https://doi.org/10.7172/2353-6845.jbfe.2017.2.5.
Mohan, B. (2014). Pradhan Manti Jan Dhan Yojana (PMJDY): Features, Needs And Challenges, International Journal of Marketing, Financial Services & Management Research, 2277–3622.
Mukherjee, A., & Chakraborty, S. (2012). Financial Inclusion of the poor and Marginalised in Jharkhand: Analysis of the Existing Model. International Journal on Research and Development-A Management Review, 1(1). Retrieved from https://papers.ssrn.com/abstract=2169673 (Accessed: 31 January 2021).
Paramasivan, C., & Ganeshkumar, V. (2013). w of Financial Inclusion in India, International Journal of Manage-ment and Development Studies, 2(3), 45–49.
PMJDY (2020). Pradhan Mantri Jan-Dhan Yojana| Department of Financial Services Ministry of Finance, Government website. Retrieved from https://www.pmjdy.gov.in/account
Ramji, M. (2009). Financial inclusion in Gulbarga: Finding usage in access, ifmrlead.org. 26. Retrieved from http://ifmr.ac.in/cmf.
Reserve Bank of India (2015). Reserve Bank of India - Reports, RBI report. Retrieved from https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?ID=836#CH1
Sarma, M. (2008). Index of financial inclusion (No. 215). Working paper.
Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of international development, 23(5), 613-628. https://doi.org/10.1002/jid.1698.
Sen, A. (2000). SOCIAL EXCLUSION: CONCEPT, APPLICATION, AND SCRUTINY. Retrieved from https://www.think-asia.org/handle/11540/2339
Shylendra, H. S. (2006). Microfinance Institutions in Andhra Pradesh’, Economic and Political Weekly, 1959–1963. Retrieved from https://www.jstor.org/stable/4418232
Singh, C., Mittal, A., Garg, R., Goenka, A., Goud, R., Ram, K., ... & Kumar, U. (2014). Financial inclusion in India: Select issues. IIM Bangalore research paper, (474).
Sriram, M. S. (2012). The AP microfinance crisis 2010: discipline or death?, Vikalpa, 37(4), 113–128.
Sriram, M., & Sundaram, N. (2015). Financial Inclusion Index: A Customized Regional Model with Reference to Economically Most Backward Districts of Tamil Nadu, India, print) Mediterranean Journal of Social Sciences, 6, 2039–2117. https://doi.org/10.5901/mjss.2015.v6n6p209.
Suryanarayana, M. H. (2008). What Is Exclusive about’Inclusive Growth’?, Economic and Political Weekly, 93–101. Retrieved from https://www.jstor.org/stable/40278108
Swamy, V. (2014). Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households, World Development. Pergamon, 56, 1–15. https://doi.org/10.1016/j.worlddev.2013.10.019.
The World Bank (TWB) (2020). Population, total - India | Data’, The World Bank. Retrieved from https://data.worldbank.org/indicator/SP.POP.TOTL?locations=IN
Published
2021-12-05
How to Cite
Goel, U., & Kumar, S. (2021). EVALUATION OF A NATIONAL LEVEL SCHEME FOR UPLIFTING RURAL POPULATION THROUGH FINANCIAL INCLUSION IN A DEVELOPING COUNTRY: EVIDENCES FROM RURAL INDIA. Indian Journal of Finance and Banking, 8(1), 40-58. https://doi.org/10.46281/ijfb.v8i1.1476
Section
Regular Research Article/ Short Communication Article
Copyright (c) 2021 Utkarsh Goel, Shailendra Kumar
This work is licensed under a Creative Commons Attribution 4.0 International License.
