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:
What is the need for financial inclusion in Sikkim?