Financial Inclusion
Financial Inclusion
Financial Inclusion is something we have been experiencing daily even if we are not aware of its true meaning. This is where we would like to give you a brief explanation of the purpose, importance, and outcome of financial inclusion in India.
What is Financial Inclusion?
It is the universal access to a variety of financial services at an economic cost. It is a process to ensure access to financial services and timely and adequate credit needed by vulnerable groups such as low-income groups and ensures delivery of financial services which include – bank accounts for savings and transactional purposes, low-cost credit for productive, personal, and other purposes, financial advisory services, and insurance facilities.
The purpose of Financial Inclusion
Financial Inclusion aims to establish financial institutions to cater to the needs of the underprivileged. These institutions have clear-cut regulations and maintain high standards ideal for any trusted financial industry. It builds and maintains financial sustainability so that everyone has a certainty of funds. The intention is to have numerous institutions that offer affordable financial assistance that creates competition so that clients have options to choose from. The primary goal is to increase awareness about the benefits of financial services among the economically underprivileged sections of society and improve financial literacy in the nation.
Financial Inclusion in India
The Reserve Bank of India has first introduced the concept of financial inclusion in India, in 2005. Since then, several schemes have been introduced that help people secure financial services and products at an economic price – such as deposits, fund transfer services, loans, insurance, payment services, and many more. The government’s financial experts and policymakers planned and researched to launch the below-mentioned schemes:
- Pradhan Mantri Jan Dhan Yojana (PMJDY)
- Atal Pension Yojana (APY)
- Pradhan Mantri Vaya Vandana Yojana (PMVVY)
- Stand Up India Scheme
- Pradhan Mantri Mudra Yojana (PMMY)
- Pradhan Mantri Suraksha Bima Yojana (PMSBY)
- Sukanya Samriddhi Yojana
- Jeevan Suraksha Bandhan Yojana
- Credit Enhancement Guarantee Scheme for Scheduled Castes
- Venture Capital Fund for Scheduled Castes under the Social Sector Initiatives
- Varishtha Pension Bima Yojana (VPBY)
Role of Fintech in Financial Inclusion
Fintech in the financial industry is a complete revolution of advanced technology in the financial sector that provides easy and hassle-free digital financial services. With the introduction of fintech, financial inclusion has improved extensively. India has multiple fintech companies that are constantly working towards simplifying the process of financial services. This is where WeFin, a Fintech has been designed to offer financial services and products at minimal costs and accessible from the comfort of your home. Since its digital, it is helpful to customers as their expenses are low and they can choose, compare and transact according to their own will. Several people in Indian rural areas have smartphones and have access to mobile internet, they can use fintech to get financial services. Enabling people in rural areas to apply for loans or credit cards by using their smartphones.
Financial Inclusion involves every person in the formal banking industry to secure every bit of their finances for future purposes. The focus is on savings among underprivileged classes living in urban and rural areas. This contributes to the progress of the economy of the nation.
Expanding financial technology has been an effective strategy to achieve financial inclusion globally. While the incorporation of technology does pose an issue for a certain section of people, it is being used to deliver banking services to those who are typically unserved and with proper awareness achieving complete financial literacy and independence is a sure shot in the near future.