3. Socio-economic Impact of Financial Inclusion

Financial inclusion is the distribution of affordable financial services to disadvantaged and low-income parts of society, compared to financial exclusion, where these services are unavailable or unaffordable. The focus of financial inclusion in India is to promote sustainable development in rural and hilly areas. The literature and the studies advocate financial inclusion as a policy taken up by the government to achieve sustainable or inclusive economic growth and reduce poverty levels. It also focuses on financial inclusion’s role in women’s financial literacy and empowerment. It can further be added that the effectiveness of financial inclusion programs can be enhanced by exclusively targeting women rather than targeting both men and women belonging to weaker or deprived families. Governments have prioritized various financial inclusion initiatives to provide access to more vulnerable families and bring them to mainstream financial services, including insurance. It is necessary to create an environment where people can receive high-quality services from financial and non-financial institutions if SHGs are to develop inclusively and sustainably and empower women. Financial literacy can endow women to build a financial personality of their own with their household savings and help them increase their accessibility to financial instruments and financial services for a better return on investment. This could give them financial freedom and power.