ABSTRACT
Based on the micro-level study conducted in Kerala, this chapter tries to understand the role of remittances in reshaping the local financial arrangements. The study maps a range of formal and informal financial arrangements in place which reflect the dualistic nature of India’s financial system. We find that migration status and access to remittances positively affect the process of financial inclusion and dependency of formal financial services. At the same time, it does not disconnect the migrant households from their traditional financial practices; migrant households continue their participation in traditional interest-free system of community finance. On the other hand, dynamics of migration discourage women from migrant households from participating in SHG activities and microfinance initiatives.
