ABSTRACT
Financial inclusion is crucial for the inclusive and sustainable economic growth of developing countries. Access to financial services to all citizens, particularly to low income people is a key to promote inclusive growth and to reduce poverty. Enhancing financial inclusion is very crucial for India with a large proportion of citizen living below poverty line and high income inequality. This study marks the departure from the earlier studies. Since the earlier studies on financial inclusion had a rural focus only, this study is unique since it is from the perspective of both urban and urban financial inclusion. This chapter first discusses concept, needs, trends and patterns of financial inclusion of poor followed by the role of financial inclusion in poverty reduction. It then presents trends and patterns of financial inclusion of rural Poor in India as well as their nature and characteristics and the role of microfinance in strengthening financial inclusion. Furthermore, the chapter analyzes the nature, characteristics and determinants of financial inclusion of urban poor in Pune, a large city of India based on a household survey at an identified slum area. Empirical findings of the survey include the socio-economic characteristics and banking behaviour of households Furthermore, the paper identifies the major determinants of the level of financial inclusion using a multiple regression model using socioeconomic characteristics of the households. Finally the paper suggests appropriate policies and strategies for enhancing financial inclusion in both in rural and urban India.
