Financial Inclusion: Lessons From Rural South India

Financial inclusion/exclusion has recently been emphasised as an important policy option aimed at alleviating poverty, minimising social exclusion and enhancing economic growth. In this article, we review the growing interest in financial exclusion and inclusion, define them and demonstrate their existence in developing and developed countries. Our empirical focus is on whether financial inclusion has been successfully implemented in four sites in rural South India where banks claimed that financial inclusion is complete. Although many rural people in South India are financially included, the concept of financial inclusion is more complex than usually portrayed. Our findings show that social and personal deprivation contributes to financial exclusion and should be viewed as key barriers to financial inclusion. We also suggest that financial inclusion is not a monolithic phenomenon and should be studied in a multi-layered fashion, ranging from having a bank account to making full use of modern financial instruments. Disciplines Economic Policy | Public Affairs, Public Policy and Public Administration | South and Southeast Asian Languages and Societies Comments Cnaan, R. A., Moodithaya, M. S., & Handy, F. (2012). Financial inclusion: Lessons from rural South India. Journal of Social Policy, 41(1), 183-205. doi: http://dx.doi.org/10.1017/S0047279411000377 © Copyright Cambridge University Press 2012. The Journal of Social Policy is online at http://journals.cambridge.org/action/displayJournal?jid=JSP This journal article is available at ScholarlyCommons: http://repository.upenn.edu/spp_papers/164 http://journals.cambridge.org Downloaded: 28 Aug 2013 IP address: 130.91.117.41 Jnl Soc. Pol. (2012), 41, 1, 183–205 C © Cambridge University Press 2011 doi:10.1017/S0047279411000377 Financial Inclusion: Lessons from Rural South India RAM A. CNAAN∗, M. S. MOODITHAYA∗∗ and FEMIDA HANDY∗∗∗ ∗[corresponding author] School of Social Policy & Practice, University of Pennsylvania, 3701 Locust Walk, Philadelphia, PA 19104, USA email: [email protected] ∗∗Nitte Education Trust, 7th Floor, Rambhavan Complex Kodialbail, Mangalore, India email: [email protected] ∗∗∗School of Social Policy & Practice, University of Pennsylvania, 3701 Locust Walk, Philadelphia, PA19104, USA email: [email protected]