“The of socio-economic and political development of their

“The
stark reality is that most poor people in the world still lack access to sustainable
financial services, whether it is savings, credit or insurance. The great
challenge before us is to address the constraints that exclude people from full
participation in the financial sector…Together, we can and must build inclusive
financial sectors that help people improve their lives.”

UN
Secretary-General Kofi Annan, 29 December 2003,

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Financial inclusion is taking into
consideration as the key constituent for the development among the policymakers
and central banks of all around the world. In the path of economic growth the
emerging economies has increased their interest on the factors which leads to
higher investment and savings, that have been regard as essential determinative
of economic growth. (Anita Gardeva and Elisabeth Rhyne., 2011). The emerging
economies especially those who are legged behind in the area of socio-economic
and political development of their people, lives in rural areas. The reason of
this backwardness is related to the poverty (result of inadequate availability
of capital), unemployment and unequal distribution of income. Therefore, the
economic development and its growth, both are crucial to collect the sufficient
resources and adequate capital is needed to support. (According to Asia-Pacific
Economic Cooperation (John D Conroy, Julius Caesar Parreñas, Worapot
Manupipatpong, 2009). Thus strong financial system for easy availability of
finance is necessary for any economy, it is also contributes to broad-based economic growth with poverty reduction

The Financial inclusion policies of
countries across the world authenticate that developed financial systems to be
correlated with lowered inequality and less significant financial exclusion
(Report of the Committee of Financial Inclusion, GoI, 2008; Rakesh Mohan,
2006). Financial inclusion can be described as the delivery of banking and
other financial services at affordable costs to the vast sections of
disadvantaged and low income groups. Uncontrolled use of public good is prior
condition for an open, inclusive and self-reliance society. Thus it should be
prime objective of public policy to provide the banking services and payment
facility to the entire population without any discrimination. Therefore, all
countries have widely acknowledged the fact that improving the access to
financial services is a very effective strategy for development of rural areas.
If the policies are reorganized the system of financial markets will prove to
make more sustainable results than temporary ripples by levying grants and
subsidies. According to the World bank report, “if financial market frictions
are not addressed, redistribution approach for equality may have to be
endlessly repeated, which could result in damaging incentives to work and save”
(World Bank ,2007). “Enhanced access to banking and other livelihood services
accelerates economic growth and also influences other evils like inequality of
income and poverty” (HM Teasury, 2007)