SHG-Bank Linkage Model - Key to Financial Inclusion in India An Empirical Analysis

The present paper attempts to examine the extent of financial inclusion by self-help group (SHG)-bank linkage programme against the backdrop of growing financial exclusion. It substantiates that the persons having low-income and less geographical access to bank, e.g. agricultural labourers, marginal and small farmers, migrant labourers, tribal and women may be excluded from the financial inclusion. Further, it also seeks to examine the role of SHG-bank linkage model, banking density, financial literacy and level of economic development in achieving financial inclusion across various regions in India. The variable of percentage of adults covered in SHGs also has positive association with the level of financial inclusion, especially in credit accounts. It suggests that SHGs can play significant role in achieving the financial inclusion, especially for women and low-income families.