3.1.1 Theoretical background
Financial inclusion
The modern economic system has made it mandatory to have monetary resources to meet even the basic amenities of the life. The availability of financial currency is indispensable to acquire every thing which is necessary to live with comfort and safety. The financing through banks is acquired by that section of the people who have optimum resources to secure that kind of financing because banks have tendency for the secured financing. But the majority of the population of our country is devoid of these resources to secure this kind of financing.
This has led the concept of financial inclusion wherein the financing will be extended to the poorest sections
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This is the priority of the nation like India where majority of population is struggling to meet the basic amenities.
Financial inclusion in today’s world has a big role to play it includes providing financial services to underprivileged people who are very poor. It has been now sixty eight years of independence but still half of the population doesn’t have accounts. Financial exclusion has made India one of the poor countries of world. People with less income or with no income are called poor. The main worry is that farmers are also excluded from financial services and when they are need of finance they go for informal ways of finance. They have to pay huge interest compared to bank interest.
All these things had led instability in our economy and people with less income can’t afford these services because charges are very high. And also yet banks have not reached to many villages in India that why people are still unbanked. In last few years government has got conscious how important is to link poor people with banks. If India wants to grow poor people can’t be left
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So that they can also enjoy these services and they also feel proud of being as an Indian. When underprivileged people are brought under the financial inclusion plan there standard of living will increase they will try to save money in banks also they will get loans at cheap rates. Nobody can take advantage of poor people which includes farmers also. Banks are for all citizens of country no discrimination so it’s a duty of government and especially banks to bring people under the roof of banking
Chart will explain how people who don’t have account can be attracted towards the banking sector:
Large population is unbanked banks with the support of government organizes the financial literacy camps these camps are nothing but a place were people from village are invited to listen the talk which is given by the expert of bank who describes them banking facilities and services and how they can get benefits from banks what are the schemes available for farmers even daily wagers and schemes available for women’s all information is given to the local people in there regional language so that they can understand better.
After this when people are satisfied they go to the branch offices and open accounts or BCs go door to door in villages and open
“Despite so many reforms, the idea of untouchability is still very much a part of Indian life." (doc A) There are hundreds of millions of people trapped under the poverty line in India, who can’t escape. They are kept in a cycle of poverty with no end. However, instead of getting the help that they need, they are being pushed further down into poverty, leading to generations of families trapped. The cycle of poverty in India is being pushed along by discrimination of the poor. The poor are discriminated against by being denied health care, pushed out of school, and targeted by officials, which leads to more poverty.
In addition to the powerful coordination the Bank possessed, it influenced interest rates for loans to the working class and the rate of inflation in the nation. Because of the use of various bank notes, variegating from bank to bank due to the lack of national currency and mixture of specie, people trusted that each bank would be able to “cash in” their bank note for specie. This did not always hold true, but the Second Bank of the United States was the most trusted of the banks to supply specie in exchange for their bank notes. Because of this most people, in order to protect themselves from losing money, would exchange state bank notes for notes issued by the Second Bank. However, this meant that the Second Bank could threaten the state banks by demanding more gold, which might cause for their bankruptcy. As a result, the state banks were pressured into not being able to over issue their bank notes, which inevitably decreased their importance and power in the nation by decreasing the circulation of their bank notes. This was the greatest argument posed by the leaders of the state banks against the Second Bank of the United States (Roughshod 2).
The “banking” concept affects two social classes, which are the working class and the middle class schools. I enrolled in a middle class school were we all wrote down what the teacher said. Whatever they write on the board, we would copy down. During my senior year, last semester, I took an Economics class that took no work to pass the class. Our teacher, Mr. Adkins, would simply tell the students, “This is what we’re going to do in class today….” He list the topics out and it w...
This is necessary as the vast majority of individuals migrating from rural to urban centers has been steadily increasing with the level of economic growth seen within the past twenty years as mentioned earlier. Unfortunately, this situation has further shown the structural issues and inequalities of cities, as most migrants end up having a poor quality of life living in informal settlements as highlight substantially by Boo. As a means of tackling this, however, the Indian government has turned its focus on investing rural regions, developing the agricultural sector. Specifically, Boo mentions that “the prime minister, Manmohan Singh, had come down from Delhi to express his concern for the farmers’ hardships, and the central government’s determination to relieve it” (p. 138). While this is definitely important funds are not being divided justly. For starters, between rural and urban areas almost all investments are being targeting towards rural regions, which is only addressing issues of inequality in one section of the country. Furthermore, across rural areas inequalities of investment are quite often overlooked. Although, “one of the governments hopes was to stop villagers from abandoning their farms and further inundating cities like Mumbai, but Asha’s relatives knew nothing of these celebrated relief programs” (p. 138). Therefore, even though
Another problem prior to the establishment of the Federal Reserve System was the inelasticity of bank credit and the supply of money. Small banks placed their excess reserves in large central reserve banks. Whenever a bank’s depositors wanted their funds, the smaller banks would be covered by the central banks. The system worked well during normal conditions. Some banks would draw down on their reserves as other banks would be building up their reserves. In times of excessive demand, however, the problem became quite serious. When the public wanted large amounts of currency, the
Making improvements on our financial literacy results in a wave of impacts on our economy and the financial health in our society because of responisble behiavior with our finances. These modifications to our behavior are neccesary because it let's us address primary cultural problems, for example over-credits on your purchases, mortgages possibly resulting in debt, dealing with expectations on inflation and also planning on your retirement.
Money has evolved with the times and is a reflection of the progress of man. Early money was a physical commodity, grain, gold or silver. During the vital stage, more symbolic forms of money such as certificates of deposit, bank notes, checks, letters of credit, bonds and other forms of negotiable securities came into prominence. Social development transformed money into a trust, “In God We Trust' it says on the back of the ten-dollar bill.” (The Ascent of Money, 27)
Binhammer, H. H. & Peter S. Sephton. Money, Banking and the Financial System. Nelson, 2001.
Money supply is the availability of money in the hands of the public (economy) that can be used to purchase goods, services and securities. In macroeconomics, the price of money is equivalent to the rate of interest. There's an inverse relationship between money supply and interest rates. As money supply increases, interest will decrease. On the other hand, interest will increases as money supply decreases. It is very important to understand that the economy works at market equilibrium. There are several factors affecting money supply; and these contributing factors will be the main focus of this paper. Understanding the basic principle on money supply is imperative to have a good grasp on the macroeconomic impact of money supply on business operations.
There are some informal financial alternate like moneylenders, family loans and traders are usually restricted to a limited amount, mostly inflexible. It is necessary to help the poor and provide them sustainable economic opportunities at gross root level.
The invention of money was a major improvement in peoples’ lives. In the past, people usually had to travel all day to find the person who is willing to exchange their goods. In addition, the goods people want to exchange did not have the standard value of measurement. This led to unequal exchanges. Furthermore, it is not convenient to carry heavy goods from one place to another for an exchange. To solve these issues, money will be the only solution. Later, people tend to develop money from cowry shells to credit cards for the convenience and to improve their society.
Promoting the use of financial services by individuals requires dealing with market failures, such as asymmetric information and moral hazard, that prevent the widespread use of financial products. Both private sector and government engagement is necessary to expand the financial inclusion of individuals. Technological progress, likely driven by the private sector and facilitated by the public sector, is expected to help increase the financial inclusion of individuals. This chapter reviews the roles of technology, product design, financial capability, financial education programs, consumer protection and market conduct, and government policies in fostering financial inclusion.
Use available literature to define, describe and discuss the impact of Banking Education verse Problem- Posing education.
There is great optimism as the growth of microfinance has shown that the poor are creditworthy, while the formal banking institutions serve only investment-worthy clients who are non-poor. However, to eliminate poverty, microfinance must be carried out in a sustainable way and cheaply, reaching a massive scale of the poor, with continuous improvement in the quality of service delivery. My study will therefore focus on the impact of microfinance in alleviating poverty in the rural Gambia.
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.