DESHBANDHU COLLEGE(UNIVERSITY OF DELHI)

PROJECT REPORT ON FINANCIAL INCLUSION

SUBMITTED TO – SANGEETA MA’AM SUMITTED BY – ABHISHEK VERMA(13/0098)

EKTA KHETAN(13/0065)

INTRODUCTION Financial inclusion or inclusive financing

is the delivery of financial services at affordable cost to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.

An estimated 2 billion working age adults globally have no access to the type of financial services delivered by the regulated financial institutions.

WHY FINANCIAL INCLUSION IS IMPORTANT IN INDIA?

Creating a platform for inculcating the habit to save money.

Providing formals credit avenues.

Plug gaps and leaks in public subsidies and welfare programmers.

COMMITTEE ON FINANCIAL INCLUSION

Khan Committee Setup by RBI in 2004. Exhorted banks to make available ‘no frills a/c’. Rangarajan Committee Inability to provide collateral security. Weak community network. Nachiketmor Committee Setup by RBI in 2003. Under chairmanship of Nachiketmor, an RBI

board member.

STUDY RESULT Population of Delhi consist of big group of migrants, labour

coming from other parts of country in search of employment, education and other purposes.

This group being financially weak due to low literacy. Low income, generally do not have access to the financial services.

In order to access the level of financial inclusion in New Delhi, a survey was conducted in area of Govindpuri, Kalkaji, CR park through a questionnaire.

Target groups were labourers, small shopkeepers, vendors.

OBJECTIVE To assess the impact of policy initiatives on

financial inclusion in Delhi.

SURVEY BRIEF Survey sample size – 40 Area – Govindpuri, Kalkaji, Deshbandhu College

Canteen.

METHODOLOGY 40 people were randomly surveyed regarding

financial inclusion through a well constructed questionnaire.

QUESTIONNAIRE1) Do you have a bank a/c?2) No. of accounts in your household?3) Which type of account do you have?4) For what purposes you use your account?5) What are the reasons that your household

opened the account?6) Who helped you opened the account?7) How frequently do you save in your account?8) How much do you save?9) Reasons for refusing a bank account?10) Have your household borrowed or take a loan?

QUESTIONNAIRE1) Are you aware of the thing that a bank account

can be opened by anyone with zero account?2) How did you find that banks were opening such

“no frills” account?3) Do you have any grievances in your “no frills”

account?4) If borrowed, what was the type of credit/loan?5) Are you using any type of financial services or

products?6) Have you purchased any insurance scheme?7) Do you know about banking credit?

QUESTIONNAIRE1) Over the past couple of years, have you been

anywhere for taking advice about money matters?

2) Have you ever approached a bank for credit need?

3) What would you do if you needed money in emergency?

The response was as follows:Majority of them were having family size of 5 members were 7(17%) and family size of 3,6,7 members were 5(13%) each.

Family size of 4,9 members were 4(10%) resp.Family size of 10 members or more were 6(15%).

Single member3% 3 m

13%

4 m10%

5 m18%6 m

13%7 m13%

8 m8%

9 m10%

10 or more members

15%

When asked about their family members they have in their family

Out of 40 respondent, 70% i.e. 25 are having bank account,

whereas 30% i.e. 15 are not having bank account.

70%

30%

Q-1 Do you have a bank a/c?Yes No

When asked about the type of account people uses?The response was as follows:

The majority of them were using saving account i.e. 80%, while 14% of them were using both current as

well as saving account and only 6% of them were using current account.

80%

6%14%

Q-3 Which type of account do you have?saving a/c current a/c fixed a/c others

 The majority of the sample population, 82% uses bank account for

managing their cash flow as they get their earning.9% uses bank account for making and receiving payments, and rest 3%

uses bank account as means of becoming eligible for other financial services.

Also 6% of sample population uses the account for depositing and making payments both.

82%

9% 3%6%

Q-4 For what purpose you uses you’re a/c?Depositing and withdrawing money Making and receiving paymentsTo become eligible for other services Both depositing and making payments

When asked about the reasons?The response was as follows:

The majority of sample population, 57% opened their bank account only for saving their part of income.

Other, 31% responded that they opened the account for saving their money, to receiving Govt. payments as well as for

receiving remittances.While 9% of sample population opened for only receiving remittances, and rest 3% of sample population for Govt.

payments only.

3%

57%

9%

31%

Q-5 What are the reasons that your household opened the account?

To receive Govt. payments To request a loan For saving moneyFor receiving remittances others

The majority of sample population, 42% responded that their friends/relatives help them in opening their bank account.While 28% of sample population responded that the bank

officials help them in opening their account, also there were some people who do not needed help as they opened their

account by their own.

6% 14%

28%42%

11%

Q-6 Who helped you opened the a/c?Village panchayat official Neighbor Bank officialsFriends/Relatives Others

41% + 29% +21% i.e. 31 of respondent said that they are saving some part of their income.

And rest 9% of respondent are not save anything. Out of the 31 respondent 41% (14) have saving habit, while 10 respondent saves at least once in

a month and rest 7 saves in their account in between 3 to 7 months.

9%

29%

41%

21%

Q-7 How frequently do you save in your a/c?Don't save/Never Atleast once in a month Less than once in a monthI put in money as andwhen I can Others

Out of 29 respondent 26 said that they save 10-20% of their income which means they generally they have very small

amount of saving which implies that they will be transacting on regular basis. Since this survey was conducted among low

income groups so, for them 10-20% of saving is good.6% respondent said that they save 20-30% and 1 respondent

said that he save 30% or more.Also there were some respondent, 17% who does not save.

17%

74%

6% 3%

Q-8 How much do you save? (in%)No savings 10%-20% 20-30 30 or more

Here the majority of sample population, 67% respondent said that they know about the thing that a

bank a/c is opened by anyone with zero balances.On the other hand 33% i.e. 17 people responded in

negative.

68%

33%

Q-10 Are you aware about zero balances a/c?Yes NO

When asked that how did you find that bank were opening such no frills a/c, the majority, 59% sample population responded that they

know about no frills a/c through newspaper and advertisement, 19% responded that they came to know through their neighbors.18% responded that bank officials gave them that news, while 4%

through village panchayat.Lastly, 13 respondent don’t know about such bank accounts.

19%

19%

59%

4%

Q-11 How did you find that banks were opening such "NO FRILLS" a/c?

Bank officials Neighbors Newspapers/Advt. NGO Village Panchayat Posters

Total of 60% who responded this question in positive, 35% said that they have borrowed money from bank, 15% said that they

have borrowed money from relatives, 2% i.e. 1 person said that he borrowed from a friend and rest 8% said that they have

borrowed money from moneylender.On the other hand 16 respondent i.e. 40% of sample

population responded in negative.

40%

35%

15%

3% 8%

Q-13 Have your household borrowed or take a loan?

NO Bank Relative Friends Moneylenders

Out of 60% sample population, 46% of majority borrowed money for personal purpose, 33% for

household items and 13% for day to day expenses.29% borrowed money for business purpose, 13% for housing purpose, 8% for education purpose

and rest 4% for education purpose.

13%

29%

8%4%

33%

13%

Q-14 If borrowed, what was the type of credit/loan?

Housing loan Business loan Vehicle loanEducation loan Household items Day to day expenses

Out of 43% i.e. 17 sample population who uses financial services or products, 35% uses debit card and rest 8% uses

credit card.On the other hand 23 respondent responded in negative.

57%

8%

35%

Q-15 Are you using any other form of financial services or products?

No Credit card Debit card

The majority of 57% of sample population said that if they needed money in emergency they would borrow from their family or friend, 20% said that they would withdraw their savings, 10% responded that they don’t know what would they do, 7% said that they would

take out loan from other sources, whereas 3-3% people said that they would sell something or take a bank loan.

 

57%

8%

3%

10%

3%

20%

Q-20 What would you do if you needed money in emergency

Ask a family or friend Take out loan form sources Sell somethingDon't know Take out a bank loan Draw on savings

CONCLUSION Steps taken towards bringing lower income groups to the

banking system has been successful to a significant extent, as the main causes observed earlier like lack of knowledge about banking schemes and policies.

While doing survey it was found that people are voluntarily excluding themselves from banking system, most of them do not have bank accounts.

The reasons behind not approaching banks are mainly the minimum balances which have been taken care by No Frills Bank Account but most of the respondent was not aware about this type of account. Hence it needs to be advertised.

It was found that people prefer to borrow from personal sources when the purpose is personal or consumption. Where the amount to be borrowed is generally small, the people found to be hesitated to approach banks, whereas for other productive purposes they borrow from bank.

In other words, it may be said as per the study conducted in Govindpuri, Kalkaji Area. Despite the thrust given to financial inclusion, the desired results have not come up.

THANK YOU…