Financial inclusion is the ease of access, availability and use offormal financial institutions by all the members of the economy. The present study was an attempt to understand the determinants offinancial inclusion in rural Punjab. To accomplish the objectives of the study, a sample of 150 households was taken from two villages of the Fazilka district by using a random sampling technique. As perceived by the sampled respondents, low savings (83.33%), low income (61.33%) and illiteracy (78.67%) were the major reasons for financial exclusion in the study area. The high transaction costs (43.33%) were the major problem faced by the rural households in availing of institutional loans. Due to all these hassles, people felt it easier to borrow money from informal credit sources due to easy availability (75.33%) and low transaction costs (85.33%). The regression analysis indicated that caste, farm size, savings and banking vs non-banking were the major factors that were significantly affecting the financial inclusion in the rural areas. Regular surveys in villages to meet the financial needs (80.67%), NGO's and non-profit organizations may evolve to propagate financial services to non-accessible areas (73.33%), awareness regarding banking services (90.00%), the opening of bank accounts without minimum balance condition (78.67%) were some of the suggestive policy measures to improve the financial inclusion in the rural areas of Punjab state.
Financial inclusion, Financial exclusion, Banking, Punjab
