FINANCIAL INCLUSION AND

EXCLUSION DYNAMICS IN SELF HELP

GROUPS
By
*I.B.Raju,
Mobile:9247857734, email: brindukuri@gmail.com
**T. Venkateswarlu,
Mobile:9296050587, email: tvlu2187@yahoo.com
**G.Krishnam Raju,
Moile: 9849133244, email: vikransgkr@yahoo.co.in

Prologue
Access to public goods and services is an essential
condition of an open and efficient society

Banking and financial services are in the nature
of a public good

It is essential that the availability of banking
services to the entire population without
discrimination is the prime objective of public
policy







Poor people expectations from the financial
system
Security and safety of deposits
Low transaction costs
Convenient operating time, minimum paper work
Frequent deposits
Quick and easy access to credit
Remittances suitable to their income and
consumption

Financial Inclusion ..?
It is the process of ensuring access to appropriate
financial products and services needed by all
sections of the society in general and vulnerable
groups such as weaker sections and low income
groups in particular at an affordable cost in a fair
and transparent manner by mainstream
institutional players

Empirical evidence shows that economic growth
follows financial inclusion

Boosting business opportunities will definitely
increase the gross domestic product, which will
be reflected in our national income growth
Financial Exclusion .?
In India, half of the country is unbanked

Only 55 per cent of the population having deposit accounts

Nine per cent of the population having credit accounts

India has highest number of households constituting 145
million excluded from banking

There is one bank branch per 14000 people

33,495 bank branches serving the financial needs of six lakh
villages



Only 20 percent of the population is having life
insurance coverage

9.6 per cent of the population is having non life
coverage

Just 18 per cent had debit cards

only 2 per cent had credit cards
Self Help Group(SHG)?
A SHG is a group of about 10 to 20 people, usually
women, from a similar class and region, who come
together to form savings and credit organization
They can pool financial resources to make small
interest bearing loans to their members
This process creates an ethic that focuses on
savings first
The setting of terms and conditions and
accounting of the loan are done in the group by
designated members
Financial Inclusion and SHG
NABARD was launched the pilot phase of the SHG Bank
Linkage programme in February 1992

Since then commercial bank are financing SHGs in India

The informal thrift and credit groups of poor are being
recognized as bankable clients

The linking of SHGs with the financial sector is win-win
situation

The banks are able to tap into a large market, namely the
low-income households, transactions costs are low and
repayment rates were high


SHG movement, National Rural Livelihood Mission (NRLM) plans to
connect at least one woman from each poor household with a SHG to
empower and promote economic wellbeing

Presently, there are three crore women who are members of SHGs
and planning to raise it to seven crore in the next five years

SHG movement in India skewed and distorted development

70 percent of SHGs and 80 percent of credit flow concentrated in only
four states - Karnataka, Andhra Pradesh, Kerala and Tamil Nadu

Inclusion and SHG Dynamics
Less Cooperation from family members
Mutual distrust and lack of coordination among
group members
skepticism towards its success, doubts on their
ability to save regular basis
Maintaining the records and accounts
Intergroup and Intra group
conflicts
Conclusion
A song is not a song unless you sing
A bell is not bell unless you ring

A Financial Inclusion is not an inclusion unless you
include what have been excluded

and yes, this is my conclusion for financial
inclusion and exclusion


Thank you