ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A
A Demand-side Approach

Financial Inclusion in India

Existing literature on financial inclusion works with indices that use supply-side information on financial services and fail to capture demand-side information. These indices thus have a serious limitation: they might overestimate the extent of financial inclusion due to multiple bank accounts held by the same individual. Using micro-level data available from a pan-India survey, we compute a financial inclusion index for 22 states based on demand-side information. We find evidence of disagreement between the ranking of the states done on the basis of a supply-side information-based index and our demand-side information-based index. Also, exploiting the microstructure of the data, we attempt to identify some determinants of borrowing from formal sources. We find that being male, having a bank account and higher educational qualification are positively correlated with the likelihood of formal borrowing.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

649for India

$20for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top