Financial Inclusion

Financial Inclusion is a process of making financial service (saving, payments, credit, and insurance) accessible and affordable to all section of the society.

It primarily aims to include everybody in the society by giving them basic financial services without looking at a person’s income or savings. Financial inclusion chiefly focuses on providing reliable financial solutions to the economically underprivileged sections of the society without having any unfair treatment. It intends to provide financial solutions without any signs of inequality. It is also committed to being transparent while offering financial assistance without any hidden transactions or costs.


Financial inclusion wants everybody in the society to be involved and participate in financial management judiciously. There are many poor households population in Sikkim that does not have any access to financial services. They are not aware of banks and their functions. Even if they are aware of banks, many of the poor people do not have the access to get services from banks.
They may not meet minimum eligibility criteria laid by banks and hence, they will not be able to secure a bank’s services. Banks have requirements such as minimum income, minimum credit score, age criteria, and minimum years of work experience etc. A bank will provide a deposit or a loan to an applicant only if he or she meets these criteria. Many of the poor people may be unemployed without any previous employment record due to lack of education, lack of resources, lack of money, etc.
These economically underprivileged people of the society may also not have proper documents to provide to the banks for verification of identity or income. Every bank has certain mandatory documents that need to be furnished during a loan application process or during a bank account creation process. Many of these people do not have knowledge about the importance of these documents. They also do not have access to apply for government-sanctioned documents.


Financial inclusion aims to eliminate these barriers and provide economically priced financial services to the less fortunate sections of the society so that they can be financially independent without depending on charity or other means of getting funds that are actually not sustainable. Financial inclusion also intends to spread awareness about financial services and financial management among people of the society. Moreover, it wants to develop formal and systematic credit avenues for the economically underprivileged sections of the society.
For several years, only the middle and high classes of the society procured formal types of credit. Poor people were forced to rely on unorganized and informal forms of credit. Many of them were uneducated and did not have basic knowledge about finance and hence, they got cheated by the greedy and rich people of the society. Several poor people have been exploited for years in the context of financial assistance.


Goal of Financial Inclusion:

  • Financial inclusion intends to help people secure financial services and products at economical prices such as deposits, fund transfer services, loans, insurance, payment services, etc.
  • It aims to establish proper financial institutions to cater to the needs of the poor people. 
  • Financial inclusion aims to build and maintain financial sustainability so that the less fortunate people have a certainty of funds which they struggle to have.
  • Financial inclusion also intends to have numerous institutions that offer affordable financial assistance so that there is sufficient competition so that clients have a lot of options to choose from.
  • Financial inclusion intends to increase awareness about the benefits of financial services among the economically underprivileged sections of the society.
  • The process of financial inclusion works towards creating financial products that are suitable for the less fortunate people of the society.
  • Financial inclusion intends to improve financial literacy and financial awareness in the state.
  • Financial inclusion aims to bring in digital financial solutions for the economically underprivileged people of the State.
  • It also intends to bring in mobile banking or financial services in order to reach the poorest people living in extremely remote areas of the state.
  • It aims to provide tailor-made and custom-made financial solutions to poor people as per their individual financial conditions, household needs, preferences, and income levels.


What is the need for financial inclusion in Sikkim?

  • Development: Greater access to financial services = Increase in savings + Decrease in income inequality & poverty + Increase in employment levels.
  • Growth: It encourages the habit to save, thus enhancing capital formation in the state and giving it an economic boost. Also, the availability of sufficient and transparent credit from formal banking institutions will promote the entrepreneurial spirit among the people = increase in productivity and prosperity in rural areas.
  • Service delivery: Direct cash transfers to beneficiary bank account rather than physical cash payments against subsidies will become possible = funds actually reach the targeted beneficiaries instead of being siphoned off along the way.