Role of banks in financial inclusion in India

Abstract

Financial inclusion is emerging as a new paradigm of economic growth that plays major role in driving away the poverty from the country. It refers to delivery of banking services to masses including privileged and disadvantaged people at an affordable terms and conditions. Financial inclusion is important priority of the country in terms of economic growth and advanceness of society. It enables to reduce the gap between rich and poor population. In the current scenario financial institutions are the robust pillars of progress, economic growth and development of the economy. The present study aims to examine the impact of financial inclusion on growth of the economy over a period of seven years. Secondary data is used which has been analyzed by multiple regression model as a main statistical tool. Results of the study found positive and significant impact of number of bank branch and Credit deposit ratio on GDP of the country, whereas an insignificant impact has been observed in case of ATMs growth on Indian GDP.

Innovation determinants of financial inclusion in top ten African countries: a system GMM approach

“…The coefficient of ATM access is negative but statistical; this implies that an increase in ATM penetration is associated with financial inclusion in Africa. This is contrary to the prior expectation which contradicts the findings of Bapat & Biswa (2016) and Iqbal and Sami (2017) who shows that access to ATM is associated with high rate of financial inclusion. The negative sign of the coefficient is due to the ATM charges banks normally charge that mostly discourage people to open the account as they view it as a means of exploitation.…”

“…Interest rate especially deposit rate play a significant role in financial inclusion by inducing people to save in a formal financial system. This is in tandem with the findings of Evans & Adeoye (2016), Bapat & Biswa (2016), and Iqbal and Sami (2017).…”

“…This simply because the increase in prices leads to an increase in profit and demand for formal credit to finance business activities. This is not in tandem with the findings of Bapat & Biswa (2016), and Iqbal & Sami (2017) who in separate studies show that high inflation discourages people save because of the fear of loss of value of their wealth.…”

“…The study also reveals that countries with low credit constraints tend to have a high rate of financial inclusion relative to the once with strict requirements. Iqbal & Sami (2017), investigated the role of a bank in financial inclusion in India, reported that availability of Automated Teller Machine (ATM), Point of Sales device (POS), and credit and debit card determined access to financial services. the study also reveals that Indian financial inclusion success is related to the spread of financial institutions across both urban and rural areas and ATMs that significantly influence ownership of formal bank accounts.…”

Formal credit inclusion within one-commune-one-product (OCOP) in the agricultural restructuring strategy of northwestern Vietnam

“…Particularly, credit is necessary to expand food production to fulfil the demand of the rising global population (Oberholster et al, 2015). While credit inclusion or the delivery of credit services to farmers at affordable terms has the major role in agricultural restructuring, limited access to credit hinders farm investment and productivity in Vietnam (Iqbal & Sami, 2017;Luan & Bauer, 2016). Lack of access to credit is therefore a big challenge in moving the OCOP program forward and linking producers to bank loans.…”