Financial inclusion and socioeconomic development: gaps and solution

Shailesh Rastogi · E. Ragabiruntha

121 citations0/0 files storedInternational Journal of Social Economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Microfinance and Financial Inclusion FinTech, Crowdfunding, Digital Finance Financial Literacy and Behavior

Abstract

Purpose The purpose of this paper is to identify factors relevant for financial inclusion (FI) and establish a model that shows how these factors lead to economic development (ED) through FI. Design/methodology/approach Primary data were collected through structured questionnaire. Out of 350, 311 respondents accurately filled the questionnaire. The data were collected from rural areas of Tamil Nadu. Exploratory factor analysis has been applied to evaluate drivers/factors relevant for FI. Confirmatory factor analysis has been applied to establish reliability and validity of the identified factors. A structural model has been proposed and empirically tested for ED through FI. Findings The main findings of the current paper are as follows: online banking (OB), understanding banking services (UBS) and financial literacy (FL) are the drivers of FI; FI can lead to ED, as the proposed model of ED, through FI, is supported in the paper ( χ 2 /degree of freedom and CMIN/degree of freedom are less than 3; GFI and AGFI are more than 0.90 and 0.85, respectively). Behavior of the people, with respect to mode of financial transactions, has changed due to demonetization. (The χ 2 test for mode of financial transaction is significant). Research limitations/implications The geographical reach of the sample should cover the whole India. The sample should also have equal representation from rural and urban areas. Practical implications The identified factors for FI (OB, UBS and FL) should be more focused to bring about better results for FI in India. These factors can lead to a more effective execution of FI initiatives. In addition to this, policy makers can be confident of relying upon FI as a tool for ED. Originality/value The identified three drivers for FI have not been explored earlier. In addition to this, ED (through FI) in the form of structural model has also not been tested earlier. Government of India can realign their policies toward FI by using findings of this paper. In addition to increasing the access of formal financial system to masses, more thrust can be given to OB and FL for better results of FI in India.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 121 citations exist upstream.

References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1999Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives 1988Structural equation modeling in practice: A review and recommended two-step approach.1981Credit Rationing in Markets with Imperfect Information 1999Evaluating the use of exploratory factor analysis in psychological research.1993Finance and Growth: Schumpeter Might Be Right 1996Financial Dependence and Growth 1999Sample size in factor analysis.

Cited by

2022Investigating the Impact of Financial Inclusion Drivers, Financial Literacy and Financial Initiatives in Fostering Sustainable Growth in North India 2021Unified Payment Interface (UPI): A Digital Innovation and Its Impact on Financial Inclusion and Economic Development 2021Social and economic empowerment of women through financial inclusion: empirical evidence from India 2021Examining the influence of financial inclusion on financial well-being of marginalized street vendors: an empirical evidence from India

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.