Leveraging Small Finance Bank (SFB) In Achieving Financial Inclusion in India
Journal Title: International Journal of Business and Management Invention - Year 2018, Vol 7, Issue 2
Abstract
Despite the growth which the banking sector has made especially in the last two decades, there are concerns that banks have not been able to include vast segments of the population, especially the disadvantage sections of the society, into the fold of basic banking services. Estimate and surveys of different study reports point out that exclusion levels of people in India is estimated to be around 40%. Realising that financial inclusion will remain a dream unless a paradigm change is introduced, the RBI, on September 16, 2015, had announced the name of 10 entities called as ―Small Finance Banks‖ (SFB). SFBs have been designed to reach out to the remotest places and unbanked Micro and Small Enterprises in all parts of the country. This paper discusses the various aspects of financial exclusion and the role of SFB in expanding the access to finance agenda of the government. The study also delves into the need and importance of Small Finance Bank in achieving the financial inclusion in India and tries to understand the various transformational challenges of MFI into Small Finance Bank. The study has utilized secondary data sourced from reports, journals, articles available at RBI database, MFIN Micrometer, CGAP, MicroSave, World Bank and NITI Aayog, etc. Techniques of simple statistics have been applied for analysing the data and getting the results to derive a logical conclusion. The study found that there is huge potential in the rural market; SFB needs to develop suitable products, credible strategy and a strong distributional channel to attract the potential clients. In addition to it, there is a need for cost effective mobile based technology deployments that are better suited to reach underserved areas. The future of SFB will determine the path that microfinance sector will take.
Authors and Affiliations
Jeeban Jyoti Mohanty
Keywords
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