Financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sine qua non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy. The term "financial inclusion" has gained importance since the early 2000s, and is a result of findings about financial exclusion and its direct correlation to poverty. Financial inclusion is now a common ...view middle of the document...
Level of income : Level of income decides to have financial access . Low income people generally have the attitude of thinking that banks are only for rich.
'Terms and conditions : While getting loans or at the time of opening accounts banks places many conditions , so the uneducated and poor people find it very difficult to access financial services .
Complicated procedures : Due to lack of financial literacy and basic education , it is very difficult for those people who lack both to read terms and conditions and account filling forms .
Psychological and cultural barriers : Many people voluntarily excluded themselves due to psychological barriers and they think that they are excluded from accessing financial services .
Place of living : As the name suggests that commercial banks operate only in commercially profitable areas and they set up branches and main offices only in that areas .People who lived in under developed areas find it very difficult to go to areas in which banks are generally reside .
Lack of awareness : Finally , people who lack basic education do not know the importance of the financial products like Insurance , Finance , Bank Accounts , cheque facility ,etc.
Consequences Of Financial Exclusion Major Two Threats :
Losing opportunities to grow : In the absence of finance , people who are not connected with formal financial system lack opportunities to grow.
Country's growth will retard : Due to vast unutilized resources that is in the form of money in the hands of people who lack financial inclusive services.
Other Consequences :
Business loss to banks : Banks will loss business if this condition persists for ever due to lack of opening of bank accounts.
Exclusion from mainstream society : The people who lacks financial services , presumed that they are excluded from mainstream society .
All transactions cannot be made in cash : Some transactions can be made in cash . In this technological world everybody wants to have electronic cash system like debit...