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Dr. N. Sundaram
Professor of Commerce, School of Social sciences and Languages,
VIT University, Vellore 632014, Tamil Nadu, India.
Mr. M. Sriram
Research Scholar, Commerce, School of Social sciences and Languages,
VIT University, Vellore 632014, Tamil Nadu, India.
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International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 3 (2016) pp 1575-1578
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Addressing financial exclusion needs holistic approach on the appropriate channels and provides access to basic account,
part of the banks to create awareness on financial products payment connections to peers, institutions, governments and
and education, advice on money management, debt enhanced financial services [30].
counseling, saving and affordable credit [17].
Reference [18] said that the support of financial inclusion can C. Barriers to financial access
be achieved only through linkages between micro finance Banking and financial institutions are providing services to
institutions and local communities. Banks should give mass low income groups in many ways [31]. But, there are some
publicity about zero balance account, accessing banking factors which create barriers for vulnerable groups to access
products by using more technology in the rural areas and the financial products and services provided [32]. The
modify ATMs as user friendly for those who are illiterate and constraints were segmented based on demand, supply and
less educated [19]. Banks needs to redesign their service institutional constraints [33].
approach to promote financial inclusion to low income group The major constraints found are less education, illiteracy, high
and consider the policy as business opportunity and corporate proximity from their living area to service institutions, low
social responsibility [20]. density of population, poor channel design and low product
The existing financial inclusion literature was analyzed in two quality [34]. The above constraints represent all the major
ways like challenging the simplistic bank or unbanked constraints on accessing financial services by the weaker
distinction and underutilizing their bank accounts [21]. This individuals as well as rendering of services by financial
paper argued that this segment must be given an ample institutions [35]. In case of firms, especially Small and
attention, if financial inclusion drive is to be successful. It also Medium Enterprises (SMEs), access to finance is not very
challenged the current measures of success for financial easy which creates hurdles for their growth [36].
inclusion. Reference [22] showed from his result that benefits The reason for including the financially excluded region was
can only be derived from active commitment with financial made as a debate and the reasons for economic imbalance
product and services and not just by access. Here the active were considered; found that it can be rectified by building
commitment is about usage of financial products and services. proper financial systems [37]. The reviews represented the
There has been some successful intervention by micro finance constraints faced by the weaker group by means of financial
institutions (MFIs) on financial education; however, there has access.
been a little discussion on how such education should be Reference [38] conducted a review about the issues and public
provided and who should lead this effort. Technologies such policy objectives on the access to financial services among
as mobile phones could be featured more prominently in areas different countries. This study was focused on the importance
where penetration rates are higher. It is proposed that of finance for economic well-being. The data provided in this
education should be targeted to poor individuals who have study was about the usage of financial services by households
distinct financial needs and varied levels of understanding. and firms across different nations [39]. It also provided the
universal access desirability and the overview of macro-
B. Digital financial inclusion economic, legal and regulatory barriers to access.
The financial lives of affluent households are entrenched in
digital financial system which facilitates the process of their DISCUSSIONS AND CONCLUSION
economic activity cheap and ease to remit or receive money While studies on financial inclusion have tackled the issue
[23, 24]. Their money is transacted in digital, by click of a from variety of viewpoints, with the exception of conceptual
button. Conversely, poor people are not availing this system, studies, the focus is seemingly on finding out the relationship
as they store their valuables by means of physical assets like between financial inclusion with awareness, digital
cash, precious metals and/ or livestock [25]. technology and constraints to access [40]. Moreover, at the
The process of financial inclusion has three aspects which are present global scenario, technology is found to be a
referred as clouds by Reference [26]. It was stated that first determining factor in the ultimate performance of financial
aspect is physical cash cloud which is operated by the existing inclusion policy, regardless of the context or the participants
poor people, a traditional cash management system. Secondly, of the study with relevant to this topic [41].
virtual account operated through e money and thirdly neither Financial inclusion is the only hope for financial development,
physical nor virtual but psychological, where people plan their which will lead to growth of economy [42]. It was well
financial life through thought process of brain. Blending documented in the above literature that supports this study to
traditional and virtual clouds reveals access and mixture of the great extent. An apparent increase in addressing the
virtual and psychological cloud leads to usage of financial population of financial exclusion requires a holistic approach
system [27]. for the banks to put forth the level of awareness on financial
It is evident that the extension of payments through digital system, appropriate financial advice and affordable system of
platforms offers the opportunity to connect the needy with credit to kindle the whole importance of formal financial
service providers [28]. Nevertheless, this system will not system management for which banks needs to enact strategies
automatically pull in the people to save the money but it pave for reach in a cost-effective manner and it should also be less
the way to embed the systems of automated financial process time consuming process. It is possible through bridging
like deposits, scheduled reminders and other financial relationship with NGOs, microfinance institutions and eligible
activities [29]. individual and agents.
Digital financial inclusion highly insists on poor people The promotion of financial system should reach the person
because it directly reaches for the welfare of needy through which is possible through technology, a viable tool that
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International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 3 (2016) pp 1575-1578
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provides financial access in quick and cost effective way. The Business Environment: Worldwide Survey Results.
best existing tool is Automated Teller Machine operated Discussion Paper 43. Washington, DC: International
everywhere in the nation. Banks should give wide publicity to Finance Corporation.
the facility of no frills account [43]. Technology can be a very [10] Cull. R., Demirg-Kunt, A., & Morduch, J. (2013).
valuable tool in providing access to banking products in Banking the world: empirical foundations of
remote areas. But ATMs still are not considered user friendly financial inclusion. MIT Press.
by the people who are illiterate and non user of technology. [11] Mehrotra, A. N., & Yetman, J. (2015). Financial
Banks, in this case, needs to reengineer the design of existing Inclusion-Issues for Central Banks. BIS Quarterly
technology which creates opportunity for traditional users to Review March.
use technology [44]. [12] Gupta, V. (2015). Pradhan Mantri Jan-Dhan Yojana:
Sensibly, it is not possible for banks and concerned authorities An Effort towards Financial Inclusion. IUP Journal
to bring changes in existing financial system overnight but of Bank Management, 14(2), 49-56.
optimum plan and speedy action will take bank to the bottom [13] Joseph, J., & Varghese, T. (2014). Role of Financial
of the pyramid sections which may not be a profitable plan for Inclusion in the Development of Indian Economy.
banks but the number of beneficiaries will increase and Journal of Economics and Sustainable
possibility of profitable proportion will be in higher volumes. Development, 5(11), 6-15.
Emerging financial inclusion as a commercial profitable [14] Shah, P., & Dubhashi, M. (2015). Review Paper on
business exists in the hands of the banks, possible through Financial Inclusion-The Means of Inclusive Growth.
viable tailored plan. Chanakya International Journal of Business
Research, 1(1), 37-48.
SCOPE FOR FURTHER RESEARCH [15] Atkinson, A., & Messy, F. A. (2013). Promoting
This article reviewed diversified contexts and literature on Financial Inclusion through Financial Education.
financial inclusion in Indian perspective, which can be further OECD Working Papers on Finance, Insurance and
extended to practical survey by selecting a district or a state, Private Pensions, (34), 1.
comparison studies and national field survey. [16] Jain, C. S. (2015). A Study of Banking Sector's
Initiatives towards Financial Inclusion in India.
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