Financial Inclusion in India: A case-study of West Bengal

Chattopadhyay, Sadhan Kumar (2011): Financial Inclusion in India: A case-study of West Bengal. Published in: Reserve Bank of India Working Paper , Vol. July 2, No. WPS(DEPR): 8/2011

Abstract

The study observes that although there has been an improvement in outreach activity in the banking sector, the achievement in respect of financial inclusion is not significant in West Bengal. An index of financial inclusion (IFI) has been developed in the study using data on three dimensions of financial inclusion. It is revealed from the index that Kolkata district leads with the highest value of IFI, while rest of the districts show a very low level of financial inclusion. This implies that the State has to go a long way in achieving financial inclusion. Apart from this computation, a survey has also been conducted in the state in order to gauge the financial inclusion in rural Bengal and the results reveal that around 38 per cent of the respondents do not have sufficient income to open a savings account in the bank. It is also revealed that moneylenders are still a dominant source of rural finance despite wide presence of banks in rural areas. It is also observed that although various measures have been undertaken for financial inclusion in the State, the success is not found to be significant. However, only supply side factor is not responsible for the financial exclusion. Demand side factors are also equally responsible for this exclusion. Thus there is a need to solve both these problems with the help of appropriate policies. A whole-hearted effort is called for from all the corners of the society, viz., bankers, beneficiaries and regulators in order to make financial inclusion more meaningful and effective.

• Item Type: MPRA Paper
• Language: English
• Keywords: index of financial inclusion, money-lenders, dimensions
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; D - Microeconomics > D9 - Intertemporal Choice > D92 - Intertemporal Firm Choice, Investment, Capacity, and Financing; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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