An analysis of financial inclusion in India: Trends, progress and performance of self-help groups in Punjab

Financial inclusion is essential for inclusive growth. It acts as a facilitator for economic empowerment as it increases the outreach and access to credit facilities. The financial penetration index calculated by social scientists have shown that the majority of states have very low scores. The research studies on the performance of Self-Help Groups (SHGs) assisted by government through financial inclusion programmes have shown positive impact on social mobilization, poverty reduction and economic sustainability. Various financial services like credit facilities for the rural women have proved as a powerful instrument for poverty alleviation. National Bank for Agriculture and Rural Development is the nodal agency in Indian Micro Finance Sector. The SHG-Bank Linkage Programme model involves SHGs directly financed by various banks like Commercial Banks, Regional Rural Banks and Cooperative Banks. An attempt has been made to analyze the perceptions of participants of Micro Finance Programmes in the two districts of Punjab. Interview schedule and focus group discussions were used to determine the impact of microfinance on economic empowerment. It has been found that there is a need of proper training programmes for the staff engaged in providing financial inclusion services.