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- Title
Creation of Income and Employment through Credit: A Case Study on Small Finance Bank.
- Authors
Arora, Bhoomika; Adhikari, Chandan S.
- Abstract
Financial inclusion is emanating as a new pattern of economic growth that plays a dominant role in eradicating poverty from a country like India. As the term Financial Inclusion indicates, it refers to the delivery of banking solutions to the 'banked', 'under-banked' and the 'un-banked' sections of the society at economical terms of service. Financial Inclusion is crucial for India in terms of economic growth and advancement of society and it also enables us as a society to reduce the void between the poor and the rich. In the current scenario financial institutions are the most important pillars of progress, economic growth and development of the economy. The basic role of Small Finance Banks is to help facilitate the motive of financial inclusion and cater to the needs of a certain demographic segment of the population. Small Finance Banks are a type of niche banks in India. Banks with a small finance bank license can provide basic banking service of acceptance of deposits and lending. The objectives of setting up of small finance banks will be to increase financial inclusion by (1) the provision of savings vehicles (2) supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations. According to a World Bank paper--The Global Findex Database 2014-measuring financial inclusion around the World--India, China and Indonesia accounted for 38% of the world's unbanked adults. Therefore, the emergence of Small Finance Banks was crucial for the unbanked section of the society. On 17 September 2015, The Reserve Bank of India (RBI) announced that it had given provisional licenses to 10 entities that would have to convert into Small Finance Banks within one year. Small finance bank offers targeted deposit and lends products to low-income groups. The product proposition is much focused keeping the target customer profile in mind. The case briefly describes how a Small Finance Bank lends credit to small entrepreneurs and how it has benefited them. It also talks about the growth history, performance of the Small Finance Bank, how diversified its lending is, how is revenue generated in Small Finance Bank and what are the terms and conditions of repayment of loans. The study majorly captures why and how much credit is important in creating income and employment opportunities in the Indian economy.
- Subjects
ASIA; EMPLOYMENT; FINANCIAL institutions; ECONOMIC development
- Publication
Wealth: International Journal of Money, Banking & Finance, 2018, Vol 7, Issue 2, p56
- ISSN
2277-9388
- Publication type
Article