Study Examines India’s Policies for Financial Inclusion of the Unbanked
By Sharita Forrest
Globally, 1.7 billion people do not have a bank account, and policymakers struggle to provide affordable, safe and accessible financial services to the unbanked population.
Despite India’s long history of financial inclusion initiatives, the country has had limited success at drawing its most vulnerable citizens into using banks and financial services rather than high-cost or risky arrangements such as borrowing from moneylenders or hiding cash under a mattress.
Doctoral student Gaurav R. Sinha and social work professor Lissette M. Piedra at the University of Illinois at Urbana-Champaign examined some of the policies that India implemented over a 24-year period to determine why a large proportion of its citizens remained unbanked.
With about 190 million unbanked adults, India is second only to China among developing countries in the number of residents who don’t have bank accounts or participate in the formal financial sector, according to World Bank.
Photo courtesy of Ashwini Chaudhary.