A discourse analysis of financial inclusion: post-liberalization mapping in rural and urban India

Abstract

Purpose The purpose of this study is to measure the availability, accessibility and usability of financial products and services in both rural and urban India from 1991 to 2014. Design/methodology/approach This paper uses principal component analysis (PCA) method to construct financial inclusion index that serves as a proxy variable for indicating the inclusiveness of financial products and services among the rural and urban people. To fulfill this objective, the study proposes separate indexes of financial inclusion for both rural and urban India from 1991 to 2014. The paper uses annual time series data from 1991 to 2014 to construct the rural-urban financial inclusion index. The used data have been collected from the basic statistical returns of Reserve Bank of India and Economic Political Weekly research foundation. Findings The study inferences that though there is a remarkable increase in financial inclusion in India from 1991 onwards, it does not result in sizeable growth of financial access to rural masses in comparison to urban masses. The rural India does not substantiate an equivalent growth to that of urban India, contrasting a perceptible increase in financial inclusion. The finding of this study will help the researchers and policymakers to understand the status of financial inclusion in the context of both rural and urban India. Furthermore, policymakers can take appropriate policy initiatives to fulfill the financial inclusion gap that exists between rural and urban people. Additionally, the proposed index is easy to compute and can be used to make comparison across countries for further studies. Originality/value The present paper attempts to include all possible dimensions (and indicators within a dimension) that have been considered so far by various authors. Therefore, the authors hope that this index will be more indicative and accurate than previous index. Again, the authors propose to use PCA for the first time to assign the weight of factors in the financial inclusion index for rural and urban India separately.

Empowering Women Through Financial Inclusion: A Study of Urban Slum

“…Financial exclusion is a concern for developed as well as developing countries (Dymski, 2005). Even a 'well-developed' financial system has not been successful in bringing universal financial inclusion in many countries (Lenka & Barik, 2018).…”

“…Financial inclusion brings unbanked and underbanked people in the financial system to provide them the opportunity to access the financial services in order to create economic growth and leads to empowerment opportunities (Lenka & Barik, 2018). The Reserve Bank of India (RBI), in 2015, defines financial inclusion as 'the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream institutional players.'…”

What Role Does Financial Inclusion Play for Poverty Reduction? Empirical Evidence From The Indian States in the Post-Liberalization Era

“…Most of the studies have used AHP for weights of the variables in the composite index construction. However, the problem with AHP is that there is no prior information available about the weight of a particular variable (Lenka and Barik, 2018). So AHP may not be a good method to find out the weight of factor included in the multidimensional index.…”

Encouraging Financial Literacy Through Corporate Social Responsibility of Financial-Service Businesses in Indonesia: A Conceptual Paper

“…However, it still requires more active development and efforts in the implementation. A study conducted in India shows that although there has been a significant increase in financial inclusion in India from 1991 to the present, but it has not been able to produce a significant increase in the financial access of people in rural areas in India when it is compared to community financial access in urban areas of India [18]. The results of other studies conducted in India shows that banks have a very important role to increase financial inclusion in terms of credit, savings and investment.…”