Measurement of financial inclusion

The Indian banking industry has seen consistent double-digit growth during the last 10 years. But there are several unmet customer needs—including financial inclusion, product innovation, low-cost innovative delivery models, leveraging technology and communication, improving efficiency, building long-term relationships with customers, etc— which the banking industry has to resolve. These challenges make way for opportunities, some of which are easy to capture.

Women are at a particular disadvantage in accessing financial services. In developing economies they are 20% less likely than men to have a bank account and 17% less likely to have borrowed formally. They have less access to safe savings vehicles and are more likely to use informal, and therefore probably riskier and more expensive, mechanisms. If women had better access to the financial system -even so much as a basic deposit account at a bank -it would be a major step in the direction of greater wealth and greater economic empowerment. And when women earn money and have more control over household spending, they spend it in ways that benefit children by investing in education and health. This article measures the extent of financial inclusion among rural women in Tirunelveli District.