Comparative Analysis of Financial Inclusion

Abstract
The heterogeneity in view about the financial inclusion prevails across the globe. Since the need of financial
products varies from individual to individual and country to country (Kempson and Whyley, 1999; Regan
and Paxton, 2003; Speak and Graham, 2000). But, majority of researchers and thinkers opine that ‘financial
inclusion is the easy availability of all banking services at an affordable cost, reasonable time & adequate
quantity to all needy people and which should also be available in appropriate forms’ (broader sense);
‘financial inclusion includes the easy access of all people to the minimum basic financial services’ (narrow
sense). The determinants and impacts of financial inclusion are main ingredients of the article. The depth
ratio emerged as leading contributor in the value of financial inclusion index among all the three variables—
depth or penetration, availability and usage—across the world, including Indian states, through the loglinear
regression model. The study further indicated that a 1 per cent increase in the financial inclusion led
to on an average 0.142 per cent increase in the value of human development index (cross-country data);
while in case of Indian states, it resulted into 0.139 per cent increase in the index. The depth, availability
and usages ratios were found to be inversely associated to the poverty. The study found only three states
of India in between high financial inclusion position, while remaining 90 per cent states belong to very low/
weak financial inclusion status. On the basis of findings of the study, it is suggested that the policy makers
around the globe should strive to surge the level of financial inclusion for an optimal, sustainable, inclusive
economic growth and development of the economies by focusing on removing the regional imbalances.

District Chamba is one among the backward districts of Himachal Pradesh. The present
study covered whole of the area of Chamba district in Himachal Pradesh. It studied all the aspects of
financial inclusion in this particular district with population residing on hilly and tough terrines.
Largely, the study is based on the observation through direct interviews with stakeholders ranging
from district/tehsil/block level Govt. Officials, Bank officials, office bearers of Panchayati Raj
Institutions, Technical hands and the labourers i.e. beneficiaries working under MNREGS. Study was
based on primary data and it was collected through a well structured schedule of questions. Study
shows that to improve the financial inclusion position of the district, the banking system needs to be
improved more.