Financial Inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.

Advantages of ensuring financial inclusion:

• Financial Inclusion facilitates access to the financial system, allowing them to build financial and physical assets, seek credit for their education, healthcare and businesses and also save for unexpected exigencies and old age.
• It helps in reducing poverty and inequality.
• It also offers an array of financial services that provide protection in case of untimely death or accident of the bread earner and also provides a safety net in old age.
• Financial Inclusion means greater transparency, converting cash transactions into account transaction, strengthening the banking system and credit creation process, reducing black money, corruption and providing the common man benefits of equal rights on the resources of the country.
• It also facilitates investing in bank deposits, contributing to insurance products, participating in stock markers and other financial instruments by removing unfounded fears about efficiency and stability of the financial system, instruments, and financial assets etc.

Pradhan Mantri Jan Dhan Yojana (PMJDY):

• The financial inclusion program, known as the Pradhan Mantri Jan Dhan Yojana (PMJDY) with zero balance is helping people to become part and parcel of the mainstream of economic development.
• The PMJDY provides access to different financial services like availability of basic savings bank account, access to need-based credit, remittances facility insurance and pension to the excluded sections i.e. weaker sections and low-income groups.
• It provides interest on deposit, accidental insurance cover of Rs. One lakh, no minimum balance requirement, a life insurance cover of Rs 30,000, overdraft facility after 6 months, access to pension, insurance product, RuPay Debit Card and Overdraft facility up to Rs 5000/- to only one account per household.

Mudra Yojana:

• As part of financial inclusion, the Mudra Yojana aims to generate employment and promote startups to strengthen the availability of credit up to 10 lakhs to poor and small entrepreneurs.
• Beside, several other schemes have been initiated to ensure access to the social security system through the
  • Atal Pension Yojana
  • Pradhan Mantri Suraksha Bima Yojana
  • Pradhan Mantri Jeevan Jyoti Bima Yojana etc.

Way forward:

• Financial Inclusion is globally considered to be a critical indicator of development and well-being of society.
• Inclusive Financial Development is the need of the hour.
• For Financial Inclusion to be more effective there is a need for digital infrastructure and digital literacy in small towns and rural India.
• Peer to peer lending platforms, credit penetration, and creation of a credit inclusive society should be encouraged.
• There is a need to encourage FINTECH (financial technology) use of software and modern technology i.e. use of smart phones, for mobile banking, investing services and crypto currency (to be issued by Reserve Bank), block chain to help make financial services more accessible to the general public.
• Financial literacy drives need to be more aggressive and driven at the school level where students develop a culture of understanding and transacting through the accounts and continue to do so for their lifetime.
• It would be possible if people better understand the financial products and services and their role in their daily live.