Page 45 - 2018

Various statistical tools were used in analysis of data as per the requirement. It includes
Descriptive analysis, Cross tabulation, Reliability statistics, Exploratory Factor Analysis,
Financial inclusion index model, ANOVA and chi square test. Descriptive research was
conducted to clarify and describe the socio economic factors affecting the level of
financial exclusion/inclusion among the agricultural households in Gujarat and initiative
taken by the banks for financial inclusion. For measuring financial inclusion, financial
inclusion index has been constructed as part of the study. The index was being
constructed on the basis of detailed discussion with bankers and extensive literature
available on the subject. After the in depth literature review and discussion with the
bankers following four variables were derived, Transactional Banking, Formal Credit,
Savings, and Insurance. The index including the above mentioned variables has been
further divided into sub categories; each sub category so formed has been allocated
individual weightage. The result so derived from the usage of index vary between ‘0 to
100’.

While assessing the status of financial inclusion, it was found that around 40 to 45
percent of agriculture households in Gujarat is still with limited or no access to basic
financial services. The financial inclusions among the five variants were similar, where
males were more financially included. Modes of operation preferred by agriculture
household were cheque and ATM in compare to other modes of operation. Informal
source has played an important role in borrowings in emergency as well as long term.
Socio-economic variables, including occupational pattern, social cohesion, asset base,
expenditure and education were found to have an influence on financial inclusion. It was
observed that asset possession remains an important criterion in determining the level of
financial inclusion of households. Agriculture households were aware of all the basic
banking facilities but they are adamant in using them. The main reason of less financial
inclusion in majority region is non availability of banks or bank branch in rural areas. The
reason so concluded in the above paragraph is non availability of banks in a rural area,
which is been supported by the bankers view also, that banks are not able to reach at all
the internal areas of rural portion which leads to lesser coverage of banking initiative.
This research will be a vital source of information for financial institutions like bank,
regulatory authorities like RBI, and state and central government to understand the
financial awareness. These institutions can study and can perform analysis on the data
while framing policies and providing financial or other aids to this specific community.
This research will be useful to organizations like NABARD while framing different loan
products to the small and marginal farmers.
Keywords: Financial Inclusion, Agriculture household, Financial services, Financial
literacy, Micro finance

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