Financial inclusion and its determinants: evidence from India
Tóm tắt
The objective of paper is to examine status of financial inclusion in India and study its determinants.
Panel fixed effects and dynamic panel generalized methods of moments (GMM) methodologies have been applied to study determinants of financial inclusion. Additionally, Kendall's index of rank concordance has been derived to test for convergence of states in achieving financial inclusion.
Branch network has unambiguous beneficial impact on financial inclusion. Both proportion of factories and employee base turn out to be significant determinants of penetration indicators. The findings reveal the importance of a region's socio‐economic and environmental setup in shaping banking habit of masses. Using test for convergence it is found that regions tend to maintain their respective level of banking activity, with no support for closing gap.
To the best of the author's knowledge, no panel data study has been performed for India based on data for large number of states and a reasonable time span. This study utilizes 29 major states and union territories encompassing 1995 to 2008, which helps to increase degree of freedom and provide reliable results. The study helps us to ascertain direction and strength of various causal factors in process offer policy makers' strategies, for improving financial inclusion.
Từ khóa
Tài liệu tham khảo
Arellano, M. and Bond, S. (1991), “Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”, Review of Economic Studies, Vol. 58, pp. 277‐97.
Arellano, M. and Bover, O. (1995), “Another look at the instrumental‐variable estimation of error‐components models”, Journal of Econometrics, Vol. 68, pp. 29‐52.
Beck, T., Demirgüç‐Kunt, A. and Martinez‐Peria, S. (2007), “Reaching out: access to and use of banking services across countries”, Journal of Financial Economics, Vol. 85 No. 1, pp. 234‐66.
Boyle, G.E. and McCarthy, T.G. (1997), “A simple measure of beta convergence”, Oxford Bulletin of Economics and Statistics, Vol. 59 No. 2, pp. 257‐64.
Burgess, R. and Pande, R. (2003), “Do rural banks matter? Evidence from the Indian social banking experiment”, Working Paper No. 04/104, London School of Economics, London.
Collard, S., Kempson, E. and Whyley, C. (2001), Tackling Financial Exclusion, Policy Press, Bristol.
Devlin, J.F. (2005), “A detailed study of financial exclusion in the UK”, Journal of Consumer Policy, Vol. 28, pp. 75‐108.
Feldstein, M. and Horioka, C. (1980), “Domestic saving and international capital flows”, Economic Journal, Vol. 90, pp. 314‐29.
Ford, R. and Poret, P. (1991), “Infrastructure and private‐sector productivity”, Economic Studies, Vol. 17, pp. 63‐89.
IMF (2009), Access to Finance Project, International Monetary Fund, Washington, DC, available at: http://fas.imf.org.
Kempson, E., Atkinson, A. and Pilley, O. (2004), “Policy level response to financial exclusion in developed economies: lessons for developing countries”, Report of Personal Finance Research Centre, University of Bristol, Bristol.
Kendall, J., Mylenko, N. and Ponce, A. (2010), “Measuring financial access around the world”, Policy Research Working Paper No. 5253, The World Bank, Washington, DC.
Kiatchai, S. and Kulathunga, A. (2009), Getting Finance in South Asia 2009 – Indicators and Analysis of the Commercial Banking Sector, The World Bank, Washington, DC.
Kumar, N. (2011), “A non‐parametric approach to financial inclusion analysis through postal network in India”, International Journal of Research in Commerce, Economics and Management, Vol. 1 No. 5, pp. 19‐24.
Kumar, N. (2012), “An empirical analysis of financial inclusion across population groups in India”, The IUP Journal of Bank Management, Vol. 11 No. 1, pp. 97‐111.
Leeladhar, V. (2006), Taking Banking Services to the Common Man – Financial Inclusion, Reserve Bank of India Bulletin, Mumbai.
Levine, R. (2002), “Bank‐based or market‐based financial systems: which is better?”, Journal of Financial Intermediation, Vol. 11, pp. 398‐428.
MacKinnon, J.G. and White, H. (1985), “Some heteroskedastic‐consistent covariance matrix estimators with improved finite sample properties”, Journal of Econometrics, Vol. 29 No. 29, pp. 305‐25.
Mihasonirina, A and Kangni, K. (2011), “ICT, financial inclusion, and growth: evidence from African countries”, International Monetary Fund Working Paper WP/11/73, Washington, DC.
Mohan, R. (2006), Economic Growth, Financial Deepening and Financial Inclusion, Reserve Bank of India Bulletin, Mumbai.
Narasimham, M (1998), Report of the Committee on Banking Sector Reforms, Reserve Bank of India, Mumbai.
Obstfeld, M. (1994), “Risk‐taking, global diversification, and growth”, American Economic Review, Vol. 84, pp. 10‐29.
Rangarajan Committee (2008), Report of the Committee on Financial Inclusion, Committee Report.
Report on Trend and Progress (2010), Operation and Performance of Commercial Banks, Reserve Bank of India, Mumbai, pp. 59‐102.
Reserve Bank of India (2011), Section 23 of Banking Regulation Act, 1949 – Master Circular on Branch Authorisation, Reserve Bank of India, Mumbai.
Sarma, M. (2008), “Index of financial inclusion”, Working Paper No. 215, Indian Council for Research on International Economic Relations.
Shaw, E.S. (1973), Financial Deepening in Economic Growth, Oxford University Press, New York, NY.
Sinclair, S., McHardy, F., Dobbie, L., Lindsay, K. and Gillespie, M. (2009), Understanding Financial Inclusion Using Action Research and a Knowledge Exchange Review to Establish What is Agreed, and What Remains Contested, Friends Provident Foundation, Dorking.
Subba Rao, K.G.K. (2007), “Financial inclusion: an introspection”, Economic Political Weekly, Vol. 42 No. 5, pp. 355‐60.
Subbarao, D. (2009a), “Financial inclusion challenges and opportunities”, Speech Delivered by Dr Duvvuri Subbarao, Governor, Reserve Bank of India, Bankers' club, Kolkata, December 9.
Subbarao, D. (2009b), “Should banking be made boring? An Indian perspective”, Keynote Address by Dr Duvvuri Subbarao, Governor, Reserve Bank of India, International Finance and Banking Conference, Mumbai, India, November 25.
Thorat, U. (2007), Financial Inclusion – The Indian Experience, Reserve Bank of India Bulletin, Mumbai.
Toxopeus, H.S. and Lensink, R. (2007), “Remittances and financial inclusion in development”, Working Paper No. 2007/49, United Nations University, New York, NY, August.
White, H. (1980), “A Heteroskedasticity‐consistent covariance matrix estimator and a direct test for Heteroskedasticity”, Econometrica, Vol. 48 No. 4, pp. 817‐38.
(The) World Bank (2005a), Global Development Finance 2005, The World Bank, Washington, DC.
(The) World Bank (2005b), World Development Indicators 2005, The World Bank, Washington, DC.
(The) World Bank (2008a), Banking the Poor: Measuring Banking Access in 54 Economies, The World Bank, Washington, DC.
(The) World Bank (2008b), Payment Systems Worldwide: A Snapshot. Outcomes of the Global Payment Systems Survey 2008, The World Bank, Washington, DC.
(The) World Bank (2009), Doing Business 2009, The World Bank, Washington, DC.