Critical Perspectives on Financial Inclusion

What is the institutional architecture of financial institutions in India?

The financial system is critical for achieving developmental agendas and it is important that these systems are inclusive and function well. Its purpose can be closely linked to ideas of equality and dignity in addition to its stated purpose of poverty reduction. Inequitable financial systems create barriers in access, limiting livelihood opportunities of the poor and vulnerable, often leading to a vicious cycle of poverty. Households need money for production and access to a variety of financial services to build savings, asset bases and to meet working capital requirements. But Indian financial policy at the moment involves the provision of savings accounts, insurance, pension schemes and credit for income generation and consumption needs, even though financial inclusion is far more than banking the unbanked’. In the development context, it needs to include the timely provision of a wider range of financial services at an affordable cost and help in reducing risk and vulnerability. In this course, we ask a few basic questions. What is the institutional architecture of financial institutions for the poor and marginalized (both historical and contemporary)? What are the basic principles of product design to improve their relevance for poor and vulnerable households? And how has the policy landscape in financial inclusion changed over the years?