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Rural Microfinance and Digital Inclusion: A Case Study on Mobile Banking and Financial Inclusion
American Journal of Economics and Business Management,
Vol. 7 No. 11 (2024): November
Abstract
Purpose: This paper aims to explore the intersection of rural microfinance and digital inclusion, focusing specifically on the role of mobile banking in enhancing financial inclusion. The study aims to know the impact, challenges and opportunities of sustainable microfinance and digital inclusion in the Bilaspur region of Chhattisgarh.
Design/methodology/approach—This study employs a qualitative approach to analysing the impact of mobile banking on financial inclusion in the rural community. Data have been collected through interviews with residents, mobile banking users, microfinance institutions (MFIs), and relevant stakeholders. Additionally, secondary data from reports and studies on mobile banking and financial inclusion have been reviewed.
Findings-Mobile banking is an effective tool for promoting financial inclusion. In rural areas, it enhances convenience for customers, agents, and institutions and facilitates transactions. By leveraging digital technologies, mobile banking plays an important role in the relationship between banks and customers. With its help, customers get financial services in the easiest form, which also contributes to the economic development of the Indian Economy.
Limitations: This study has been done only in the rural areas of the Bilaspur region of Chhattisgarh, so it represents this area only. The data were collected from microfinance customers only, so it does not cover all the people of this region. The results of this study may vary from area to area.
Practical Implications: This study will help with digitization in villages. It will help us understand the problems faced in using mobile banking in villages and how mobile banking makes transactions easier.
Originality—This study's highlight is its consideration of the indirect effect of technological innovation on MFI efficiency. It also shows the impact of mobile banking implementation on financial inclusion.
Keywords
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- Armendáriz, B., & Morduch, J. (2010). The Economics of Microfinance. MIT Press.
- Bateman, M. (2010). Why Doesn't Microfinance Work? The Destructive Rise of Local Neoliberalism. Zed Books.
- Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. World Bank Group.
- Donovan, K. P. (2012). Mobile money for financial inclusion. Information and Communications for Development 2012: Maximizing Mobile, 61-73.
- Ghosh, S., & Vinod, D. (2017). Financial inclusion, digital payments, and the Indian economy. Journal of Banking and Financial Technology, 1(1), 20-23.
- Hilbert, M. (2011). Digital gender divide or technologically empowered women in developing countries? A typical case of lies, damned lies, and statistics. Women's Studies International Forum, 34(6), 479-489.
- Jack, W., & Suri, T. (2011). Mobile money: The economics of M-Pesa. National Bureau of Economic Research.
- Kikulwe, E. M., Fischer, E., & Qaim, M. (2014). Mobile money, smallholder farmers, and household welfare in Kenya. PLoS ONE, 9(10), e109804.
- Kumar, N. (2015). Financial inclusion and its determinants: Evidence from India. Journal of Financial Economic Policy, 7(1), 34-51.
- Ledgerwood, J. (1999). Microfinance Handbook: An Institutional and Financial Perspective. The World Bank.
- NABARD. (2019). Status of Microfinance in India. National Bank for Agriculture and Rural Development.
- Parvez, Z. & Ganesh, M. (2019). Mobile banking adoption in rural India: Factors influencing the adoption of mobile banking services. Journal of Rural Studies, 66, 114-124.
- Rao, M. (2016). Digital India and Financial Inclusion: A Policy Analysis. Journal of Asian Economics, 46, 1-11.
- Sanyal, S., & Hisam, M. W. (2018). Financial inclusion and rural banking in India. International Journal of Management Studies, 5(4), 46-54.
- Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613-628.
References
Armendáriz, B., & Morduch, J. (2010). The Economics of Microfinance. MIT Press.
Bateman, M. (2010). Why Doesn't Microfinance Work? The Destructive Rise of Local Neoliberalism. Zed Books.
Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. World Bank Group.
Donovan, K. P. (2012). Mobile money for financial inclusion. Information and Communications for Development 2012: Maximizing Mobile, 61-73.
Ghosh, S., & Vinod, D. (2017). Financial inclusion, digital payments, and the Indian economy. Journal of Banking and Financial Technology, 1(1), 20-23.
Hilbert, M. (2011). Digital gender divide or technologically empowered women in developing countries? A typical case of lies, damned lies, and statistics. Women's Studies International Forum, 34(6), 479-489.
Jack, W., & Suri, T. (2011). Mobile money: The economics of M-Pesa. National Bureau of Economic Research.
Kikulwe, E. M., Fischer, E., & Qaim, M. (2014). Mobile money, smallholder farmers, and household welfare in Kenya. PLoS ONE, 9(10), e109804.
Kumar, N. (2015). Financial inclusion and its determinants: Evidence from India. Journal of Financial Economic Policy, 7(1), 34-51.
Ledgerwood, J. (1999). Microfinance Handbook: An Institutional and Financial Perspective. The World Bank.
NABARD. (2019). Status of Microfinance in India. National Bank for Agriculture and Rural Development.
Parvez, Z. & Ganesh, M. (2019). Mobile banking adoption in rural India: Factors influencing the adoption of mobile banking services. Journal of Rural Studies, 66, 114-124.
Rao, M. (2016). Digital India and Financial Inclusion: A Policy Analysis. Journal of Asian Economics, 46, 1-11.
Sanyal, S., & Hisam, M. W. (2018). Financial inclusion and rural banking in India. International Journal of Management Studies, 5(4), 46-54.
Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613-628.