Bottlenecks and Problems Related to Financial Inclusion in Madhya Pradesh.

Abstract

The present work of the research paper is to identify the problems and bottlenecks in relation to financial inclusion using the case of Madhya Pradesh, one of the poorest states in India. India does not appear to be successful in promoting financial inclusion in Madhya Pradesh the main reason for this is the lack of functional autonomy. In the state of Madhya Pradesh lack of awareness, income and asset constraints, limited literacy and social exclusion act as major barriers to financial inclusion. Cumbersome documentation procedure, unavailability of diversified products and services, high transactions costs, and easy availability of informal credits are other major barriers to financial inclusion. Banks require collateral to make loans and 90% of banks and RRB borrowers get up collateral. Given that land is the most important form of collateral in rural areas and poor household’s legal documentation issues and sizeable proportion of poor is excluded.

Key words: Financial inclusion, Finance, Bottlenecks, Problems.