A study on financial inclusion in gannavaram mandal

k.Sumanth 10102418

introduction
Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society The United Kingdom was one of the first countries to realize the importance of financial inclusion The Reserve Bank of India (RBI) set up the Khan Commission in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into the mid-term review of the policy (200506). In the report RBI exhorted the banks with a view of achieving greater financial inclusion to make available a basic "no-frills" banking account. In India, financial inclusion first featured in 2005, when it was introduced by K C Chakraborthy, the chairman of Indian Bank. Mangalam Village became the first village in India where all households were provided banking facilities Features: No-frills account, easy credit, use of regional languages, NGO/SHG, financial education

Research problems, objectives and Design

Research problem: Financial exclusion Very low saving Money lender are still dominant of rural finance Research objective: To identify cause of financial exclusion and low saving To understand the factor that making people to barrow money from money lenders Analyze essential financial service required by rural people Research Design: A Research design is concerned with turning a research question into a testing project. The best design depends on the research questions. Primary data is collected from 120 respondents of allapuram,buddavaram and tampalle villages of Ganavaram mandal and data is analyzed and interpreted through tabulation ,column chart and percentage.

Methodology
Data collection: Structured questioner is used for collection of data.

Sample size: 120 random sampling.

Data analysis: data is analyzed through Tabulation, column chart and Percentages

3.4 Data collection: For this research, in order to achieve the objective, the data has been collected using both primary and secondary source of data. The secondary data has helped in developing the background information, needed in order to build the report constructively and the reader to comprehend more thoroughly the survey outcome. Primary data has been collected through questionnaire. Direct survey method has been used to collect the data from the sample. The respondents are selected randomly by using random sampling method out of the population of the Ganavaram mandal villages. Questionnaires consist of close ended question

Data analysis& interpretation

Table:1 Availability of bank

Options
Yes No total
140 120 100 80 60 40 20 0 Yes

Respondents
120 0 120

percentages
100 0 100

responds percentages

NO

Total

100% of people are aware of availability of bank in there village.

Table:2 Type of bank

Options Public sector

Responds 120

percentages 100

Co-operative bank
Private bank total
140 120 100

0
0 120

0
0 100

80
60 40 20 0 public sector bank co-operative bank Private sector bank Total responds percentage

Villages consists of public sector bank only. There are no co-operative or private sector banks available.

Table:3 Do you have account in a Bank

Options Yes No

Responds 51 69

percentage 42.5 47.5

Total
140 120 100 80 60 40 20 0 Yes No

120

100

Responds percentages

Total

Only 42.5% of people have account in bank and 57.5% does not have any account

Table:4 Reasons for not having bank account

Options Lack of financial knowledge Low income

Responds 21 24

Percentage 17.5 20

Illiteracy/language
Banking procedure Neutral Total
140 120 100 80 60 40 20 0

7
6 62 120

5.833333
5 51.666667 100

responds percentages

Table:5 Type of account

Options Zero balance Saving account

Responds 34 17

Percentage 28.3333333 14.1666667

Current account
Fixed account None Total
140 120 100 80 60 40 20

0
0 69 120

0
0 57.5 100

responds percentage

0
zero saving current fixed balance accounts account deposit account account None Total

Only 28 of people have zero balance account which is initiated by financial inclusion program

Table:6 Documents required for opening account

Options Electoral card Ration card Pan card License neutral Total
140

Responds 0 51 0 0 69 120

Percentage 0 42.5 0 0 57.5 100

120
100 80 60 40 20 0 electoral ration pan card license card card neutral total responds percentages

Table 7:Initial deposit

Options 0-100 100-200

Responds 36 6

Percentage 30 5

200-300
>300 Neutral Total
140 120 100 80

1
8 69 120

0.833333
6.666667 57.5 100

responds 60 40 20 0 0-100 100-200 200-300 >300 neutral total percentages

57.5% of people does not do any saving and remaining initial deposits are low

Table:8 Approximate monthly savings

Options Less than 500 500-1000

Responds 44 2

Percentage 36.6666667 1.6666667

1000-2000
Above 2000 Neutral Total
140 120 100 80 60

5
0 69 120

4.1666667
0 57.5 100

40
20 0

responds percentage

Table:9 Reasons for low savings

Options Low income High expenses

Responds 60 23

Percentage 50 19.1666667

Others
Total
140

37
120

30.8333333
100

120
100 80 60 40 20 0 low income high expenses others total responds percentages

50% of dont save because of low income, 19.16% of high expenses 30.83% for other reasons

Table:10 Any instructions in vernacular language

Options Yes No

Responds 40 80

Percentage 33.3333333 66.6666667

Total
140 120

120

100

100
80 responds 60 40 20 0 yes no total percentages

33.33% are positive about instructions provide in local language 66.66 are say they never find any instructions in local language

Table:11 Awareness of any banking services

Options Deposit/withdrawing/passbook Cheque book Loans General/kisan credit card ATM card None Total
140 120 100 80 60 40 20 0

Responds 91 7 66 24 46 20 120

Percentage 75.8333333 5.83333333 55 20 38.3333333 16.6666667 100

responds percentages

Table:12 Reasons for bank visit

Options Depositing money Withdrawing Loan

Responds 50 1 40

Percentage 41.6666667 0.83333333 33.3333333

Passbook
Neutral Total
140 120 100 80

9
20 120

7.5
16.6666667 100

60
40 20 0 responds percentages

Table:13 Availed loan form money lenders or Bank

Options Money lender Bank None

Responds 69 25 26

percentage 57.5 20.8333333 21.6666667

Total
140 120 100 80

120

100

responds 60 40 20 0 money lender bank none total percentages

Table:14 Why not bank

Options Lengthy legal procedure Language Delayed credit Other Neutral

Responds 38 4 0 52 26

Percentage 31.6666667 3.33333333 0 43.3333333 21.6666667

Total
140 120 100 80 60 40 20 0

120

100

responds percentages

Table:15 Amount of loan barrowed

Options 0-10000

Responds 45

Percentage 37.5

10000-20000
20000-30000 >30000 None

15
12 22 26

12.5
10 18.3333333 21.6666667

Total
140 120 100 80

120

100

responds 60 40 20 0 0-10000 10000-20000 20000-30000 >30000 none total percentages

Table:16 Purpose of taking loan

Options Agriculture Animal husbandry

Responds 15 2

Percentage 12.5 1.6666667

Marriage
Medical Neutral Others Total
140 120 100 80 60 40

10
25 26 42 120

8.3333333
20.833333 16.666667 21.666667 100

responds percentages

20
0 agriculture animal marriage husbandry medical neutral others total

Table:17 Did any SHG/NGO gave any advice regarding financial services

Options Yes No Total

140 120 100

Responds 39 81 120

Percentage 32.5 67.5 100

80
responds 60 40 20 0 yes no total percentages

Majority of people(67.5) say that none came to educate them about financial services though which stands 32.5%.

they are some positive feedbacks

Table:18 Does financial inclusion program meets your financial needs

Options Yes No

Responds 38 82

percentage 31.6666667 68.3333333

Total
140 120 100 80 60 40 20 0 yes

120

100

responds percentages

No

total

68.% of responds did not receive any kind of financial supports and 31% are satisfied by the services .well thus shows that the program initiated by government and financial are not yet meeting the need and they are not effectively functioning and reaching the needy.

Findings/suggestions and limitations

Average annual income of rural people lies between 50000-60000. There are no presence of co-operative banks and private banks. Majority of people in rural area dont save in bank because of lack of financial knowledge ,low income,illiteracy,language and cumbersome banking procedure . No frills account is the objective of financial inclusion but its percentage in very low which accounts 31% only. People who save are saving very low because of low income and high expenditure. Most of the instructions are not provides in local languages. People are aware of the service provided by bank but they hardly use them illiteracy language etc . most people dont have an account so there is no scope of visiting bank and using the services. Money lenders are still dominant player in rural finance because of banks lengthy legal procedures , language barriers, delayed credit and requirements of documents. Most of the loan taken is used for unproductive purpose such as marriage, medical expenses etc. This may be major reason that bank are not willing to grant loan SHG/NGO are not making enhalf efforts to educate the rural people. 68% of people haven't received any financial assistance from financial institutions From the above finding we can conclude that the purpose of financial inclusion is Not effective and. financial institution are inefficient in uplifting the life of rural people from poverty

Suggestions: Co-operative banks and privates banks should start branches in rural area. SHG/NGO should make more efforts in educating rural people. Dominance of money lenders can be reduced when banks are well acquainted with rural people so efforts should be made to maintain relation with rural people. Financial institutions should make effort to encourage people to start saving by personally assisting them in accessing financial services provides by banks Financial institutions should provide easy loans and this loans should be directed towards staring up small business more over government should establish various training section to order to start up business and create self employment programs for uplifting the life of under section people. Limitations: The following are the limitation of the research The study is only conducted in Gannavaram mandal of Krishna district The program is recently started in Krishna district Sample size is one 120 people of gannavaram mandal

conclusion
Financial inclusion is a tool with will facilitates financial services to venerable group of people it should be supported by all corners of society in order to up lift the life of weaker section of society. The spirit of financial inclusion must not be deviated the financial institutions ,government and NGO/SHG must act responsibly and ensure that the spirit of financial inclusion is not breached in the future ,which can help many people come out of poverty conditions