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Ph.D.
(Management)
A STUDY ON FINANCIAL INCLUSION OF AGRICULTURE
HOUSEHOLDS IN SELECTED DISTRICTS OF GUJARAT

Ph.D. Scholar : Patel Nilesh Mafatlal
Research Supervisor : Dr. Akash B. Patel

Regi. No.: 13146031006
Abstract :
Ensuring reliable financial services to poor household of the nation has been an
important and long standing policy very important of the government of India. Despite
sustained efforts, millions of rural and urban poor continue to lack opportunities to
borrow, save, insure themselves and access numerous services of India’s formal financial
sector. Now, the Indian government has the unprecedented opportunity to achieve this
fundamental but protected goal of financial inclusion.

Financial services actively contribute to the humane and economic development of the
society. These lead to social safety net and protect the people from economic shocks.
Hence, each and every individual should be provided with affordable institutional financial
products/services popularly called “Financial Inclusion”. Despite witnessing substantial
progress in financial sector reforms in India, it is disheartening to note that nearly half of
the rural households even today do not have any access to any source of funds-
institutional or otherwise. Hardly one-fourth of the rural households are assisted by
banks. Hence the major task before banks is to bring most of those excluded, i.e. 75% of
the rural households, under banking fold.

Even after years of implementing mass banking in the country; committed to extend
services of financial intermediaries to the poorest of the poor and exploited, a vast
majority of rural household are excluded from the formal banking services forced to
remain in the grip of non formal agencies. The situation is not different in the case of
agricultural sector which support to vast population who are dependent upon agricultural
and allied activities for their livelihood. RBI strategic initiative for increasing the level of
financial inclusion in the country by means of opening ‘no frills’ account be relaxing the
KYC norms has been intended to increase individuals access to banks in terms of simple
possessing an account with the bank, and should focus on availing its services like
mobilizing service, availing credit or usage of money transfer mechanisms.

The Microfinance industry is gathering momentum to become a significant force in India.
The number of self-help groups (SHGs) savings linked has increased to about 7.5 million
with a member base of 98.1 million. The SHG bank linkage program (SBLP) has shown a
active borrowings from banks with the growth of 4.9% in the number of SHGs. The
institutional credit outstanding against the SHGs as at end of March, 2011 exceeded INR

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