Factors that Matter for Financial Inclusion: Assessment of Empirical Evidences, with Special Reference to India

Abstract

The issue of financial inclusion has become a developmental policy priority in almost all countries, including India. It therefore becomes important to find out and differentiate between the factors that matter for and against financial inclusion. The current article is an aim in this regard, and establishes a strong conceptual framework by carefully reviewing the existing evidences on the determinants of financial inclusion (with special reference to India). Among the various socio-economic variables, income is the most significant enabler of financial inclusion. Other than income; literacy, education, and absence of income inequality affect financial access/inclusion positively. In terms of the infrastructure related variables; road, telephone and internet connectivity foster greater financial inclusion. Among the banking variables, easy banking procedures, low credit/deposits ratio and NPAs, and high branch density enable greater financial services' availability to 'all'.