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Firdous Ahmad Malik
D. K. Yadav

Financial
Inclusion
Schemes in
India
Financial Inclusion Schemes in India
Firdous Ahmad Malik • D. K. Yadav

Financial Inclusion Schemes

in India
Firdous Ahmad Malik D. K. Yadav
Jindal Center for Global South Assistant Professor
O.P. Jindal Global University Department of Economics
Sonipat, Haryana, India Babasaheb Bhimrao Ambedkar University
Lucknow, Uttar Pradesh, India

ISBN 978-981-19-1315-0 ISBN 978-981-19-1316-7 (eBook)

https://doi.org/10.1007/978-981-19-1316-7

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Summary

Even after 70 years of independence, a large section of the Indian population still
remains unbanked. This gap has resulted in financial instability among the lower-
income groups who do not have access to financial products and services. However,
in recent years, the Government of India and the Reserve Bank of India (RBI) have
been pushing the concept and idea of financial inclusion. The Government of India
and the Reserve Bank of India have been making concerted efforts to promote
financial inclusion as one of the important national objectives of the country.
Some of the major efforts made in the last five decades include nationalisation of
banks, building up of robust branch networks of scheduled commercial banks,
co-operatives and regional rural banks; introduction of mandated priority sector
lending targets and lead bank scheme; formation of self-help groups; and permitting
BCs/BFs to be appointed by banks to provide doorstep delivery of banking services
and zero balance BSBD accounts, among other facilities. The fundamental objective
of all these initiatives is to provide financial services to the large section of the
hitherto financially excluded Indian population. The Government of India and RBI
have taken various steps to include a vast segment of unbanked people into main-
stream banking such as Micro Finance- Self-Help Group Model (1992), Kisan Credit
Card (1998), No Frill Accounts (2004), Business Correspondents and Business
Facilitators (2006, 2009), and Swabhimaan (2011) financial inclusion model, but
the path to financial inclusion continues to be challenging. The United Nations
(UN) had raised the basic question – why so many bankable people in rural and
urban areas are unbanked? NSSO data revealed that 45.9 million farmer households
in the country (51.4 percent) out of a total of 89.3 million households do not have
access credit, either from institutional or non-institutional sources. Various financial
experts argue that a bank account is the most basic step of bringing such people
under the financial mainstream. So, the primary objective of financial inclusion
should be to open bank accounts of unbanked people. These people have been
kept away from the financial and banking mainstream and don’t have a bank
account, don‘t have knowledge about financial and saving instruments, and are
unable to reap benefits on whatever large or small amount of money they have at

v
vi Summary

their disposal. In simple language, financial inclusion means including those lying at
the lowest strata of our social pyramid into the financial mainstream. But financial
inclusion also implies a very important point. It is felt that a majority of the unbanked
people are not used to frills, now normally associated with modern banking. These
people require the most basic banking facilities which are free of frills. That means
financial inclusion is no-frill banking. Policymakers have already initiated some
positive measures aimed at expanding financial inclusion. However, those efforts are
opined by many as not commensurate with the magnitude of the issue. There is also a
need on the part of the academicians and researchers to study the issue of financial
inclusion with a comprehensive approach in order to highlight its need and
importance.
Preamble

This study was focussed to examine the impact of recent financial inclusion schemes
on the poorest of the poor people in Lucknow and Kolkata. The schemes in focus
have been implemented after 2014 to address the issues of financial exclusion among
the unbanked population across the country. The schemes are PMJDY, MUDRA,
PMJJBY, PMSBY and APY. The government is claiming to have opened 35.27
crore PMJDY accounts, till 2019–20, across the country, but these accounts are
mostly dormant accounts and lying unused. The other benefits of the scheme, such as
overdraft facility and direct bank transfers, have not achieved significant growth
since its inception. Similarly, for the MUDRA scheme, which was drafted to provide
loans to small businesses, the total amount disbursed in 2015–16 was 132954.73
crores and has reached 89934.72 crores in 2020–21. But in the case of the poorest of
the poor, these schemes, again, didn’t show any inclusion of the ultra-poor. For
social security schemes like PMJJBY, the number of claims received between 2015
and 2016 are 22212 crores and reached 35997 crores in 2017–18. Under PMSBY,
the number of claims disbursed from 2015 to 2016 are 2757 crores and reached the
mark of 15746 crores, respectively, and the assets under management 506 crores in
2016 are reached to 12696 crores in 2020. These claims made by the government
didn’t manifest at ground level. Therefore, this study was undertaken to check the
impact of financial inclusion schemes on the ultra-poor in Lucknow and Kolkata. To
understand financial inclusion and exclusion we have followed in depth literature
review and theoretical bases to understand the aspects of financial inclusion.
Theoretical and the other empirical evidence from studies have shown that poor
people are saving less compared to middle- and higher-income families because of
social, economic, psychological, and institutional factors. Financial education and
financial incentives can help the poor save more. Institutions are also excluding
people from taking part in financial activities by tight rules and regulations. Poor
people are always disadvantaged, due to which it becomes difficult for them to save
or think about using various banking services. The saving behaviour of poor people
is collectively determined by socio-economic conditions and as well as by institu-
tional barriers.

vii
viii Preamble

In this study, we try to understand theoretical bases of financial inclusion.

Financial inclusion is a spectrum of various dimensions like savings, credit, and
use of various banking products by poor people and what is the status of financial
inclusion among these urban poor. Savings is considered one of the fundamental
variables which improves overall well-being of people to fight life crises. Further,
savings itself is decided by various other parameters like income, human capital,
assets and other properties available to the people. Besides, savings is commonly
done to meet expenses during events such as health issues and accidents as well as
children’s education and marriage. Savings basically depends upon the ability and
capability of an individual. As Katona (1975) said, it is decided by the ability plus
willingness. On similar grounds, Keynes J.M. (1975) discussed three motives of
savings: transactional, precautionary and speculative motive. Katona again (1975)
explained savings on three grounds: contractual savings, residual savings and
discretionary savings. Similarly, Warheryd (1999) identified four motives: habit or
controlling expenditure, precautionary motive, bequest motive and profit motive.
Modigliani explained savings by working years and retirement years. Sturm (1983)
argued that people normally save during earning years till retirement age. After
retirement, they are dissaving. Romer (2011) said that earnings in initial years are
distressed into two parts, consumption and savings. People ones reaching to the
retirement age, savings are financed plus interest rate to fulfil consumption require-
ments. Deaton (1989) said that in developing countries, poor people have large
family size, due to which they are only saving for consumption purpose and are
unable to save for retirement or bequest.
Keeping all these studies in view, I understand that all people are behaving
rationally while keeping other things same. Every individual wants to save, for
different life purposes, and this depends upon occupation, income, education,
region, capability and willingness. In case of poor people, almost all these things
are missing. Therefore, the nature of savings among the poor is quite different. Now
the question arises, how to boost savings among the poor? To support the poor so
that they can save for the future and live a better life, we need to look at them from
several perspectives such as basic amenities of life, education, housing facility,
occupation and earnings/income. Therefore, it demands a spectrum of services
with proper rehabilitation as well as adaptation.
Individual savings are directly determined by age (Modigliani & Ando, 1957).
Permanent income theory suggests savings are done because of permanent income at
disposal. In developing countries, savings are dependent income, higher the income,
higher will be the savings and vice versa. Studies have shown people in developing
countries are working in informal sectors, like in India and other South Asian
countries and countries in sub-Saharan Africa. They are lacking formal institutional
support to save. Savings are also determined by psychological factors. Behavioural
economists also stress on individual approach, and optimistic and pessimistic behav-
iour, among other factors.
To grasp the concept of financial inclusion and access to financial institutions,
academicians and policymakers are now using the financial inclusion index. The
financial inclusion index represents mainly three broad variables: accessibility,
Preamble ix

availability and usage. This study has analysed financial inclusion from 2006 to
2019. The main parameters are number of bank accounts per 1000 adults, number of
ATMs and bank branches per 100,000 adults, and volume of deposits plus loans
percentage of GDP. Number of bank accounts from 2006 to 2019 has improved a lot,
and now almost every household has a bank account. But the other two variables’
availability and usage didn’t improve much as per the demand. We have used
financial inclusion index to measure financial inclusion of India. The estimated
results lie between 0 and 1, where 0 represents complete financial exclusion and
1 represents complete inclusion. Further, the scale has been divided into three broad
categories, which are 1) 0  FII  0.4, indicates low financial inclusion, LFI; 2) 0.4
< FII  0.6, indicates medium financial inclusion, MFI; and 3) 0.6 < FII 
1, indicates high financial inclusion, HFI. As per the scale of financial inclusion,
we find India captures the position of medium financial inclusion. We also investi-
gated impact of recent financial inclusion schemes on financial inclusion index with
the help of the Dummy regression models. The results of the model show positive
change in financial inclusion index after 2014.
After analyses of financial inclusion index calculated from secondary data
sources collected from the World Bank, IMF and RBI, we have directly focussed
on our primary survey study to get more insights from the ground about two urban
poor groups from Lucknow and Kolkata.
We have focussed on identifying the access and non-access pattern of slum
dwellers and beggars in Lucknow and Kolkata. Previous studies have identified
responsible factors which determine financial access of people. These factors vary
from region to region but remain unanimously same everywhere. Therefore, in this
study, we have analysed demographic as well as other important associated variables
which are playing important role in financial access. Our book has been divided into
major four parts. The first part discusses socio-economic conditions of slum dwellers
and beggars. The second part focusses on access and non-access pattern of financial
products and services. Part third explores pattern of access and non-access with
reference to socio-economic factors. From all four parts we find that Lucknow slum
dwellers as well as beggars are in worse condition compared to their Kolkata
counterparts. The core objective was to study the access and non-access pattern of
recent financial inclusion schemes to the poorest of the poor. From the statistical
analysis, it is found the null hypothesis have been accepted that Due to lack of
awareness and problems of illiteracy the population of poorest of the poor have very
limited access to recent financial inclusion schemes.
After awareness of recent financial inclusion schemes, we were also interested to
understand the socio-economic status of people and their participation in these
schemes. The socio-economic and financial inclusion status of the poorest of the
poor in India. First, we have analysed demographic variables and their relationship
with financial inclusion schemes. Secondly, we have used the chi-square test to
check the hypothesis to know the statistical significance. We have also developed
indexes on social-economic status, financial inclusion index and financial literacy to
draw the representative statistical inferences. We have also used twin regression
models to check how representative are financial inclusion schemes in the
x Preamble

development of socio-economic conditions. The objective of our study was to

explore the changes in socio-economic conditions of the poorest of the poor due to
recent financial inclusion schemes. Our hypothesis was that there is not any signif-
icant change taken place in the socio-economic conditions of the poorest of the poor
after the implementation of recent financial inclusion schemes. Finally, accept our
null hypothesis There is not any a significant change took place in socio-economic
conditions of the poorest of the poor after implementation of recent financial
inclusion schemes.
Further, we also want to know how financial access represents the socio-
economic conditions of slum dwellers and beggars in Lucknow and Kolkata.
Financial access is one of the parameters used to describe the economic and financial
conditions of people. Key determinants of financial access are income and expendi-
ture pattern of people. Again, income is determined by level of education and type of
occupation, among other factors. Income expenditure mismatch has been calculated
for slum dwellers and beggars in general. Later on, we have divided the access and
non-access pattern of slum dwellers and beggars to measure the differences of
income and expenditure gaps. The results show slum dwellers are better off than
beggars, and within access and non-access, the access holders are better than
non-access people in both the cases.
We have also used MANOVA model to understand economic and financial
behaviour of people and to check if there is any significant difference in them after
the implementation of recent financial inclusion schemes. In conclusion, we under-
stand all these schemes fail to improve the economic and financial behaviour of slum
dwellers and beggars in both the cities. The objective of the book was to check the
aggregate impact of recent financial inclusion schemes on their economic and
financial behaviour. The hypothesis was that there is significant impact of recent
financial inclusion schemes on economic and financial behaviour of the poorest of
the poor. But we reject our null hypothesis, that there is insignificant impact of recent
financial inclusion schemes on economic and financial behaviour of the poorest of
the poor
Book Description

Exclusion of destitute population from formal financial system is long-standing

problem of India. The Government of India has taken several initiatives since
independence in this direction, starting from establishment of cooperative banks,
nationalisation of commercial banks, experimenting with model of regional rural
banks and NABARD to model of microfinance institutions and SHGs/JLGs. In spite
of several policy interventions, status of financial inclusion is very poor in India. As
per the National Sample Survey data, 45.9 million farmers in India, that is, 51.4
percent of the nearly 89.3 million total household, do not have any access to credit
either from institutional or non-institutional sources. More importantly, despite the
vast network of rural branches, only 27 percent of total farm households are indebted
to formal sources. In other words, 73 percent of farm household do not have access
to formal credit sources. Similar situation is in case of access of deposit facility. Just
before the implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme,
only 51.4 percent adult household have bank account with formal financial
institutions.
Recently, the NDA Government, led by Prime Minister Shri Narendra Modi, has
started many new schemes of financial inclusion to achieve the target of complete
financial inclusion. Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri
Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana
(PMJJBY), Pradhan Mantri Fasal Bima Yojana (PMFBY), PM MUDRA Scheme
and Atal Pension Yojana (APY) are those schemes announced by the Modi Gov-
ernment. These schemes target to provide specialised financial services to the
excluded sections of the population, especially to poorest of the poor. On the basis
of its reports, the government is claiming to have opened bank accounts of 99 percent
households under the PMJDY scheme. Similarly, very adorable claims have also
been made by the government related to other schemes.
The present book attempts to assess the access and impacts of these schemes on
socio-economic conditions and financial behaviour of destitute population, espe-
cially of beggars and slum dwellers. Field-level observations were collected through
well-structured questionnaire from Lucknow and Kolkata, using simple random

xi
xii Book Description

sampling method. In the analysis, it has been found that there is very big difference
between the claim of the government and ground realities. Sampled households were
divided into two groups, on the basis of their access and non-access to these
schemes, for capturing the impacts of schemes on their socio-economic condition
and financial behaviour. Methods such as financial inclusion index, socio-economic
index, financial literacy index and financial behaviour index were used for measur-
ing the intensity of impacts on the life of beggars and slum dwellers. Results of the
analysis showed that access of these schemes are very poor in case of destitute
population like beggars and slum dwellers. It has also been found that there is a very
minimal impact of these schemes on the life destitute population.
This is the first book, in the available literature on financial inclusion, which
analyses very deeply the access and impact pattern of recent financial inclusion
schemes on the life of destitute population. Therefore, in the interest of academia,
policymakers and society at large, this book is highly recommended.
Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definition of Financial Inclusion . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3.1 Concept of Financial Inclusion and Exclusion . . . . . . . . 4
1.4 Problems of Supply-Driven Financial Policies and Poor . . . . . . . 8
1.5 Recent Financial Inclusion Schemes . . . . . . . . . . . . . . . . . . . . . . 8
1.6 Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.7 Scope of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.8 Statement of the Research Problem . . . . . . . . . . . . . . . . . . . . . . 11
1.9 Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10 Hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.11 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.11.1 Tools of Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.12 Chapter Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2 Financial Theories and Their Relevance in Financial Inclusion . . . . . 21
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 Theoretical Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.3 Individual-Oriented Perspectives . . . . . . . . . . . . . . . . . . . . . . . . 26
2.4 Sociological Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.5 Institutional Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3 Impact of Recent Financial Inclusion Schemes on Status
of Financial Inclusion in India: Secondary Data Analysis . . . . . . . . . 37
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Recent Financial Inclusion Schemes and Their Performances
from Secondary Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 39

xiii
xiv Contents

3.2.1 Pradhan Mantri Jan-Dhan Yojana (PMJDY) . . . . . . . . . . 39

3.2.2 Pradhan Mantri Mudra Yojana . . . . . . . . . . . . . . . . . . . 40
3.2.3 Pradhan Mantri Suraksha Bima Yojana (PMSBY) . . . . . 40
3.2.4 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) . . 41
3.2.5 Pradhan Mantri Suraksha Bima Yojana (PMSBY) . . . . . 42
3.2.6 Atal Pension Yojana (APY) . . . . . . . . . . . . . . . . . . . . . 43
3.3 Development of Financial Inclusion Index . . . . . . . . . . . . . . . . . 45
3.4 Calculation of Financial Inclusion Index (FII): Comparison
of Past Attempts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.5 The Financial Inclusion Index . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.6 Impact Assessment of Recent Financial Inclusion Schemes on
Financial Inclusion Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.6.1 Regression Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4 Socio-Economic Conditions and Pattern of Access and Non-Access
in Recent Financial Inclusion Schemes of the Poorest of Poor . . . . . . 53
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.2 State Wise Socio-Economic Conditions of Slums and Beggars
from Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.3 State-wise Socio-Economic Conditions of Slum Dwellers
from Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.4 Access and Non-Access Patterns of Financial Products
and Services (Slums) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
4.5 Access and Non-Access Patterns of Financial Products
and Services (Beggars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
4.6 Patterns of Access and Non-Access with Reference to Socio
Economic Factors Slum Dwellers and Beggars . . . . . . . . . . . . . . 89
4.7 Determining Factors of Financial Access among Slum Dwellers
and Beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
4.7.1 Hypothesis Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
4.7.2 Binary Logistic Regression Model . . . . . . . . . . . . . . . . . 101
4.8 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
4.9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
5 Financial Inclusion Schemes and Changing Socio Economic
Status of Poorest of the Poor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.2 Living Status of Slums in Lucknow and Kolkata . . . . . . . . . . . . . 110
5.3 Flow Chart of Hypothesis: Banking Access and
Socio-Economic Status of Slums in Lucknow and Kolkata . . . . . 114
5.4 Socio Economic Status (Table 5.20) . . . . . . . . . . . . . . . . . . . . . . 120
5.5 Socio Economic Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5.6 Regression Model (I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Contents xv

5.7 Financial Inclusion and Financial Literacy . . . . . . . . . . . . . . . . . 122

5.7.1 Financial Attitude Index . . . . . . . . . . . . . . . . . . . . . . . . 123
5.7.2 Index Construction Methodology . . . . . . . . . . . . . . . . . 123
5.7.3 Index Construction: Category (I) . . . . . . . . . . . . . . . . . . 124
5.7.4 Financial Knowledge Index . . . . . . . . . . . . . . . . . . . . . 125
5.7.5 Consolidated Financial Literacy Index . . . . . . . . . . . . . . 126
5.8 Regression Model (II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
5.9 Findings of the Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
5.10 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Appendix A: Socio Economic Index . . . . . . . . . . . . . . . . . . . . . . . . . . 129
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
6 Impact of Recent Financial Inclusion Schemes on Economic
and Financial Behavior of Poorest of the Poor . . . . . . . . . . . . . . . . . 131
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
6.2 Financial Access and Income Pattern of Slum Dwellers . . . . . . . . 132
6.3 Financial Access and Expenditure Pattern of Slums . . . . . . . . . . . 135
6.4 Income Expenditure Mismatch Among Slums Dwellers
and Beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
6.5 Financial Access and Financial Behaviour of Slum Dwellers . . . . 140
6.6 Description of MANOVA Model . . . . . . . . . . . . . . . . . . . . . . . . 143
6.6.1 Multivariate Analysis of Variance (MANOVA) . . . . . . . 143
6.7 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
6.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
7 Policy Recommendations for Better Future . . . . . . . . . . . . . . . . . . . . 151
7.1 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
7.2 Findings of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
7.3 Recommendations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . 158
7.4 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
List of Figures

Fig. 1.1 Flow chart of sample size among beggars in Lucknow and
Kolkata (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fig. 1.2 Map of slum Dwellers in Lucknow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fig. 1.3 Flow chart of Kolkata Beggars (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fig. 1.4 Map of Beggars from Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Fig. 1.5 Flow low chart of sample size among Slum Dwellers
in Lucknow and Kolkata (A) . . .. .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. 15
Fig. 1.6 Map of slum Dwellers in Lucknow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Fig. 1.7 Flow chart of Slum Dwellers in Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Fig. 1.8 Map of slum Dwellers in Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fig. 2.1 Source: Sturm (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Fig. 4.1 Gender wise percentage distribution of beggars in Lucknow
and Kolkata . .. . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . 55
Fig. 4.2 State wise caste of beggars in Lucknow and Kolkata . . . . . . . . . . . . . . 55
Fig. 4.3 Distribution of education among beggars in Lucknow and
Kolkata . . . .. . . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . 56
Fig. 4.4 Percentage wise annual income of Beggars in Lucknow and
Kolkata . . . .. . . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . 57
Fig. 4.5 Frequency of income among beggars in Lucknow
and Kolkata . .. . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . 58
Fig. 4.6 Distribution of number of working days in a month from
beggars . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . 58
Fig. 4.7 Distribution wise number of working hours in a day from
beggars . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . 59
Fig. 4.8 Distribution wise amount paid/earned per day among Beggars
from Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Fig. 4.9 Percentage wise housing condition of beggars . . . . . . . . . . . . . . . . . . . . . 61
Fig. 4.10 Type of drinking water facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Fig. 4.11 Percentage wise electricity facility available for beggars . . . . . . . . . . 62
Fig. 4.12 Type of fuel used by beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

xvii
xviii List of Figures

Fig. 4.13 Type of toilet facility availed by beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Fig. 4.14 Economic status of beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Fig. 4.15 Assets owned by the house hold . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . 65
Fig. 4.16 Gender wise percentage of slums in Lucknow and Kolkata . . . . . . 66
Fig. 4.17 State wise caste of Slums in Lucknow and Kolkata . . . . . . . . . . . . . . . 66
Fig. 4.18 Education of slums in Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . 67
Fig. 4.19 Annual income of slums in Lucknow and Kolkata . . . . . . . . . . . . . . . . 68
Fig. 4.20 Frequency of income among slum dwellers . . . . . . . . . . . . . . . . . . . . . . . . 69
Fig. 4.21 Percentage of number of working days among slums . . . . . . . . . . . . . 70
Fig. 4.22 Number of working hours attended by slums . . . . . . . . . . . . . . . . . . . . . . 71
Fig. 4.23 Distribution wise type of house . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . 71
Fig. 4.24 Drinking water facility of slums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Fig. 4.25 Electricity facility available for slums in Lucknow and Kolkata . 73
Fig. 4.26 Type of fuel (slums) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Fig. 4.27 Type of toilet facility (slums) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Fig. 4.28 Percentage wise number of disable among slums . . . . . . . . . . . . . . . . . . 75
Fig. 4.29 Economic status of slums in Lucknow and Kolkata . . . . . . . . . . . . . . . 76
Fig. 4.30 Assets owned by the house hold . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . 76
Fig. 5.1 Flow chart of hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Fig. 6.1 Histogram for normality test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
List of Tables

Table 3.1 Pradhan Mantri Jan-DhanYojana (PMJDY) 28th

August 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Table 3.2 Micro Units Development Finance Agency (MUDRA)
8th April, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Table 3.3 Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY)
9th May, 2015 . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . 43
Table 3.4 Pradhan Mantri Suraksha Bima Yojana (PMSBY) 9th May,
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Table 3.5 Atal Pension Yojana (APY) 1st June, 2015 . . . . . . . . . . . . . . . . . . . . . . 45
Table 3.6 The values of these dimension from 2005 to 2016, are given
below in Tables 1 respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Table 4.1 Gender wise percentage distribution of beggars in Lucknow
and Kolkata . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . 54
Table 4.2 State wise caste of beggars in Lucknow and Kolkata . . . . . . . . . . . . 55
Table 4.3 Educational profile of beggars in Lucknow and Kolkata . . . . . . . . 56
Table 4.4 Annual income of beggars in Lucknow and Kolkata . . . . . . . . . . . . 56
Table 4.5 Type of beggars in Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . . . 57
Table 4.6 Distribution of number of working days in a month from
beggars . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 58
Table 4.7 Distribution wise number of working hours in a day from
beggars . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 59
Table 4.8 Distribution wise amount paid/earned per day among beggars
from Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Table 4.9 Percentage wise housing condition of beggars . . . . . . . . . . . . . . . . . . . 60
Table 4.10 Type of drinking water facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Table 4.11 Percentage wise electricity facility available for beggars . . . . . . . . 62
Table 4.12 Type of fuel used by beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Table 4.13 Type of toilet facility availed by beggars . . . . . . . . . . . . . . . . . . . . . . . . . 63
Table 4.14 Economic status of beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Table 4.15 Assets owned by the house hold . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 64

xix
xx List of Tables

Table 4.16 Gender wise percentage of slums in Lucknow and Kolkata . . . . . 65

Table 4.17 State wise caste of slums in Lucknow and Kolkata . . . . . . . . . . . . . . 66
Table 4.18 Education of slums in Lucknow and Kolkata . . . . . . . . . . . . . . . . . . . . 67
Table 4.19 Annual income of slums in Lucknow and Kolkata . . . . . . . . . . . . . . 68
Table 4.20 Frequency of income among slum dwellers . . . . . . . . . . . . . . . . . . . . . . 69
Table 4.21 Percentage of number of working days among slums . . . . . . . . . . . 69
Table 4.22 Number of working hours attended by slums . . . . . . . . . . . . . . . . . . . . 70
Table 4.23 Distribution wise type of house . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Table 4.24 Drinking water facility of Slums . . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . 72
Table 4.25 Electricity facility available for slums in Lucknow
and Kolkata . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . 72
Table 4.26 Type of fuel (slums) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Table 4.27 Type of toilet facility (slums) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Table 4.28 Percentage wise number of disable among slums . . . . . . . . . . . . . . . . 75
Table 4.29 Economic status of slums in Lucknow and Kolkata . . . . . . . . . . . . . 75
Table 4.30 Assets owned by the house hold . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 76
Table 4.31 About banking & savings related financial products:
(Slums from Lucknow & Kolkata) awareness . . . . . . . . . . . . . . . . . . . . 77
Table 4.32 Reasons for not opened a bank account . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Table 4.33 Banking Facilities/ Services availed by [Slums from
Lucknow & Kolkata] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Table 4.34 What are the reasons as to why you have not availed
remittance facility of banks? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Table 4.35 What are the reasons as to why you have not availed credit
or loan facility? . . . .. . . .. . . . .. . . .. . . .. . . . .. . . .. . . .. . . . .. . . .. . . .. . . . .. . 79
Table 4.36 Whether any Banking Correspondents (BCs) available
in your area for delivery of banking services? (FI) . . . . . . . . . . . . . . 80
Table 4.37 If Yes, have you availed any banking services through BCs? . . 80
Table 4.38 If No, reasons for not availing banking services through BCs . . 81
Table 4.39 Did you avail any loan from sources other than Banks? . . . . . . . . 81
Table 4.40 Access to insurance products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Table 4.41 What are the reasons why you do not have Insurance? . . . . . . . . . . 82
Table 4.42 Have you ever made any claim under the following policies? . . 83
Table 4.43 Access of pension products (Have you heard or availed the
following pension related products?) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Table 4.44 What are the reasons why you do not have a pension
account? . . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . 83
Table 4.45 Awareness about banking & savings related financial products:
(beggars from Lucknow & Kolkata) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Table 4.46 Reasons for not opened a bank Account . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Table 4.47 Banking facilities/ Services availed by [Beggars from
Lucknow & Kolkata] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Table 4.48 What are the reasons as to why you have not availed
remittance facility of banks? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
List of Tables xxi

Table 4.49 What are the reasons as to why you have not availed credit
or loan facility? . . . .. . . .. . . . .. . . .. . . .. . . . .. . . .. . . .. . . . .. . . .. . . .. . . . .. . 86
Table 4.50 Whether any Banking Correspondents (BCs) available
in your area for delivery of banking services? (FI) . . . . . . . . . . . . . . 86
Table 4.51 If Yes, have you availed any banking services through BCs? . . 86
Table 4.52 If No, reasons for not availing banking services
through BCs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Table 4.53 Did you avail any loan from sources other than Banks? . . . . . . . . 87
Table 4.54 Access of insurance products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Table 4.55 What are the reasons why you do not have insurance? . . . . . . . . . . 88
Table 4.56 Have you ever made any claim under the following policies . . . 88
Table 4.57 Access of pension products (have you heard or availed the
following pension related products?) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Table 4.58 What are the reasons why you do not have a pension
account? . . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . 88
Table 4.59 Access of documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Table 4.60 Schemes wise full details of financial access and financial
inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Table 4.61 Access of MUDRA scheme by beggars and slums . . . . . . . . . . . . . . 91
Table 4.62 Access of PMJJBY by slums and beggars . . . . . . . . . . . . . . . . . . . . . . . . 91
Table 4.63 Access of PMSBY and APY by slums and beggars . . . . . . . . . . . . . 91
Table 4.64 Tabulation of caste of the respondent PMJDY account slums
and beggars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Table 4.65 Tabulation of Gender of Respondent and PMJDY account . . . . . 93
Table 4.66 Tabulation of education of the respondent PMJDY account . . . . 93
Table 4.67 Tabulation of occupation of the respondent PMJDY account . . . 94
Table 4.68 Tabulation of income of the respondent PMJDY account . . . . . . . 95
Table 4.69 Tabulation of PMJDY account education of the respondent . . . . 96
Table 4.70 Tabulation of PMJDY account occupation of the respondent . . . 97
Table 4.72 Tabulation of PMJDY account gender of respondent . . . . . . . . . . . . 98
Table 4.71 Tabulation of PMJDY Account Income of the respondent . . . . . . 98
Table 4.73 Tabulation of PMJDY account and age . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Table 4.74 Tabulation of PMJDY account economic status . . . . . . . . . . . . . . . . . 99
Table 4.75 Tabulation of PMJDY account PMJDY awareness . . . . . . . . . . . . . . 100
Table 4.77 Description of the study variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Table 4.76 Tabulation of PMJDY account and documents .. . .. . .. . . .. . .. . . .. 101
Table 4.78 Results of logistic regression .. . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . .. . . . 103
Table 5.1 Tabulation of PMJDY account type of house . . . . . . . . . . . . . . . . . . . . 110
Table 5.2 Tabulation of PMJDY account drinking water facility . . . . . . . . . . 110
Table 5.3 Tabulation of PMJDY account do you have electricity . . . . . . . . . . 111
Table 5.4 Tabulation of PMJDY account type of fuel . . .. . .. . .. . .. . .. . . .. . .. 111
Table 5.5 Tabulation of PMJDY account type of toilet facility (sanitation) 112
Table 5.7 Tabulation of PMJDY account economic status . . . . . . . . . . . . . . . . . 113
Table 5.6 Tabulation of PMJDY ACCOUNT persons with disability . . . . . 113
xxii List of Tables

Table 5.8 Tabulation of PMJDY account assets of the household . . . . . . . . . 113

Table 5.9 Tabulation of PMJDY account education of the respondent . . . . 115
Table 5.10 Tabulation of PMJDY account occupation of the respondent . . . 116
Table 5.11 Tabulation of PMJDY account income of the respondent . . . . . . . 117
Table 5.12 Tabulation of PMJDY account type of the house . . . . . . . . . . . . . . . . 117
Table 5.13 Tabulation of PMJDY account drinking water facility . . . . . . . . . . 117
Table 5.14 Tabulation of PMJDY account do you have electricity . . . . . . . . . . 118
Table 5.15 Tabulation of PMJDY Account Type of Fuel . . . . . . . . . . . . . . . . . . . . 118
Table 5.16 Tabulation of PMJDY account type of toilet facility . . . . . . . . . . . . 119
Table 5.17 Tabulation of PMJDY account persons with disability . . . . . . . . . . 119
Table 5.18 Tabulation of PMJDY account economic status . . . . . . . . . . . . . . . . . 119
Table 5.19 Tabulation of PMJDY account assets of the house hold . . . . . . . . 120
Table 5.20 Socio economic status: variables of the study . . . . . . . . . . . . . . . . . . . . 120
Table 5.21 Regression model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Table 6.1 Tabulation of financial access and annual income of the
respondent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Table 6.2 Tabulation of financial access and nature of remuneration
among slums .. . .. . .. .. . .. . .. .. . .. . .. .. . .. . .. . .. .. . .. . .. .. . .. . .. .. . .. . 133
Table 6.3 Tabulation of financial access and number of working
days per month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Table 6.4 Tabulation of financial access number of working hours per
day .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. .. . 135
Table 6.5 Tabulation of financial access and annual expenditure
of slums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Table 6.6 Income expenditure mismatch among slum dwellers . . . . . . . . . . . . 137
Table 6.7 Income expenditure mismatch among access and non- access
of slum dwellers . .. . . . .. . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . 137
Table 6.8 Income expenditure mismatch among beggars . . . . . . . . . . . . . . . . . . . 138
Table 6.9 Income expenditure mismatch among access and non-access
beggars . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 139
Table 6.10 Tabulation of financial access, do you have house budget . . . . . . 140
Table 6.11 Tabulation of financial access, who is responsible for your
house budget .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. 141
Table 6.12 Tabulation of financial access and shortage of income
in last 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Table 6.13 Tabulation of financial access and how you soughted
problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Table 6.14 Descriptive statistics MANOVA . . .. . . .. . . . .. . . .. . . .. . . .. . . . .. . . .. . 144
Table 6.15 Box’s test of equality of covariance matrices . . . . . . . . . . .. . . . . . . . . . 144
Table 6.16 Bartlett’s test of sphericity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Table 6.17 Multivariate tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Table 6.18 Levene’s test of equality of error variances . . . . . . . . . . . . . . . . . . . . . . . 145
Table 6.19 Tests of between-subjects effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
About the Authors

Firdous Ahmad Malik an Indian citizen by birth,

obtained his PhD in economics from Babasaheb
Bhimrao Ambedkar University, Lucknow, India. His
research area of interest is financial behaviour of the
poorest of the poor, financial inclusion and financial
literacy. He holds an MPhil degree in economics from
Babasaheb Bhimrao Ambedkar University, Lucknow,
and a master’s degree in economics from Kashmir Uni-
versity. He has published papers in Springer, Elsevier,
Taylor & Francis and other Scopus-indexed journals. He
specialises in microfinance, development economics,
urban-rural poverty, monetary economics, public
finance and inclusive education.

D. K. Yadav MA, PhD, an Indian citizen by birth, is an

assistant professor in the Department of Economics,
Babasaheb Bhimrao Ambedkar University, Lucknow,
India. He holds a PhD degree in money banking and
financial institutions from Allahabad University. He is
member of the Indian Political Economic Association
and the Indian Econometric Association. He has
published papers in Springer, Elsevier and other
Scopus-indexed journals. He has 12 years of teaching
experience in economics (money and banking, public
finance, and econometrics). He has supervised many
PhD and MPhil students.

xxiii
Abbreviations

ANOVA Analysis of Variance Financial Inclusion

APY Atal Pension Yojana
BC Banking Correspondent
BP Banking Products
FA Financial Access
FAI Financial Attitude Index
FBI Financial Behaviour Index
FI Financial Inclusion
FII Financial Inclusion Index
FKI Financial Knowledge Index
FLI Financial Literacy Index
FS Financial Services
IMF International Monetary Fund
MANOVA Multivariate Analysis of Variance
MI Microfinance
MUDRA Micro Units Development and Refinance Agency Ltd
PMJDY Pradhan Mantri Jan-Dhan Yojana
PMSBY Pradhan Mantri Suraksha Bhima Yojana
RBI Reserve Bank of India
SBA Saving Bank Account
SEI Socio Economic Index
SES Socio Economic Status Analysis of Variance

xxv
Chapter 1
Introduction

1.1 Introduction

Even after 70 years of independence, a large section of the Indian population still
remains unbanked. This malaise has led the generation of financial instability among
the lower income group who do not have access to financial products and services.
However, in recent years the government and Reserve Bank of India has been
pushing the concept and idea of financial inclusion. The Government of India and
the Reserve Bank of India have been making concerted efforts to promote financial
inclusion as one of the important national objectives of the country. Some of the
major efforts made in the last five decades including – nationalization of banks,
building up of robust branch the network of scheduled commercial banks,
co-operatives and regional rural banks, introduction of mandated priority sector
lending targets, lead bank scheme, formation of self-help groups, permitting
BCs/BFs to be appointed by banks to provide doorstep delivery of banking services,
zero balance BSBD accounts, etc. The fundamental objective of all these initiatives
is to provide the financial services to the large section of the hitherto financially
excluded Indian population. The government of India and RBI have taken various
steps to include a vast segment of unbanked people into mainstream banking such as
Micro Finance- Self-help Group Model (1992), Kisan Credit Card (1998), No Frill
Accounts (2004), Business Correspondents and Business Facilitators (2006, 2009),
Swabhimaan financial inclusion model but the path of financial inclusion is contin-
uous to be challenging. The United Nations (UN) had raised the basic question,
―why so many bankable people in rural and urban areas are unbanked? NSSO data
revealed that 45.9 million farmer households in the country (51.4 percent), out of a
total of 89.3 million households do not access credit, either from institutional or
non-institutional sources. Various financial experts argue that bank account is the
most basic step of bringing such people under the financial mainstream. So, the
primary objective of financial inclusion should be to open bank accounts of
unbanked people. These people have remained aloof from the financial and banking

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 1
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_1
2 1 Introduction

mainstream and they don’t possess a bank account, don‘t have knowledge about
financial and saving instruments, and are unable to reap benefits on whatever large or
small amount of money they have at their disposal. In simple language financial
inclusion stands for including the people lying on the lowest strata of our social
pyramid into the financial mainstream. But financial inclusion also implies a very
important point. It is felt that a majority of the unbanked people are not used to frills,
now normally associated with modern banking. These people require the most basic
banking facilities which are free of frills. That means financial inclusion is no-frill
banking. The policymakers have already initiated some positive measures aimed at
expanding financial inclusion. However, the efforts are opined by many as not
commensurate with the magnitude of the issue. There is also a need on the part of
the academicians and researchers to study the issue of financial inclusion with a
comprehensive approach in order to highlight its need and importance. The govern-
ment of India and the Reserve Bank of India have been making concerted efforts to
promote financial inclusion as one of the important national objectives of the
country. Some of the major efforts made in the last five decades include – nation-
alization of banks, building up of robust branch the network of scheduled commer-
cial banks, co-operatives, and regional rural banks, introduction of mandated priority
sector lending targets, lead bank scheme, formation of self-help groups, permitting
BCs/BFs to be appointed by banks to provide doorstep delivery of banking services,
zero balance BSBD accounts, etc. The fundamental objective of all these initiatives
is to reach the large sections of the hitherto financially excluded Indian population.

1.2 Definition of Financial Inclusion

Financial inclusion is a welfare program delivery of financial services to disadvan-

taged sections of society. This simple definition encompasses the concept’s two,
primary dimensions (United Nations, 2006). Firstly, financial inclusion refers to a
customer having access to a range of formal financial services, from simple credit
and savings services to the more complex such as insurance and pensions. Secondly,
financial inclusion implies that customers have access to more than one financial
services provider, which ensures a variety of competitive options. Flowing from this
definition, the financial exclusion would mean the inability of the disadvantaged to
access financial services. A range of obstacles could lead to financial exclusion;
barriers include geography (limiting physical access), regulations (lack of formal
identification proof or of appropriate products for poor households), psychology
(fear of financial institution’s staff, structures, complicated financial products, etc.),
information (lack of knowledge regarding products and procedures), and low finan-
cial acumen (low income and poor financial discipline), among others. In the Indian
context, financial inclusion, according to the Finance Minister’s 2006–2007 budget
speech, was defined as “the process of ensuring access to timely and adequate credit
and financial services by vulnerable groups at an affordable cost” (Union Budget,
2007–2008). In a similar vein, the Committee on Financial Inclusion defines
1.2 Definition of Financial Inclusion 3

financial inclusion as “. . .the process of ensuring access to financial services and

timely, adequate credit where needed, to vulnerable groups such as weaker sections
and low-income groups, at an affordable cost,” (Report of the Committee for
Financial Inclusion, 2008).
Encouragingly, the RBI-led drive for financial inclusion is thus significant in that
it attempts to extend savings bank accounts to ‘unbanked’ households. There are
many metrics to measure financial inclusion including population per bank branch or
using the percentage of adult population.
Firstly, it is the most popular method in common usage. Secondly, the financial
inclusion drive attempts to increase access to finance by increasing the number of
adults having bank accounts.
Why Is Financial Inclusion Important? One of the most important empirical
relationships revealed in the last decade has been the establishment of the causal
link between financial depth and growth (Honohan, 2004). Policy-makers would do
well to recognize the relationships between well-developed financial systems and
economic growth as well as economic growth and poverty reduction. Thus, the
question becomes, does a well-developed financial system serve the poor? There are,
in fact, ample theoretical justifications and empirical evidence indicating that a well-
developed financial system can be an effective poverty alleviation tool. For one,
there are large costs to small and poor entrepreneurs for the market imperfections in a
poorly developed financial system. These burdens include informational
asymmetries, transaction costs, and contract enforcement costs, compounded by a
lack of collateral, credit histories, and contacts. For these entrepreneurs, broad access
to financial services would smooth project financing, positively impacting growth,
and poverty alleviation (Galor & Zeira, 1993). Beck and de la Torre (2006) also refer
to the Schumpeterian process of ‘creative destruction’ whereby a well-developed
financial system is able to allocate resources to efficient newcomers. Empirical
studies also show that small firms in countries with greater outreach and access
face lower financing obstacles and grow at a higher rate (Beck et al. 2005). Access to
finance is also an important incentive for new ideas and technologies (King and
Levine, 1993). Additionally, a strong financial system encourages expansion in the
market and competition for existing firms. It ensures that poor households and small
entrepreneurs need not depend on middlemen. On the other hand, an underdevel-
oped financial system can be uncompetitive, conservative, and inimical to poor or
small entrepreneurs (Rajan & Zingales, 2003).
The question arises is the Indian financial system well worth in providing
financial inclusion if yes then why still we have a large population without access
to financial services again the question arises are the policies problematic, or demand
shortages. Secondly is opening a bank account financial inclusion? Etc.
The following study will concentrate on the demand-based needs of the excluded
the population that of Slums dwellers and Beggars and will try to analysis reasons
why these marginal groups are still outside of the formal financial institutions in the
country and why the supply-based welfare programs are not much effective in
promoting financial inclusion of those who are excluded.
4 1 Introduction

1.3 Literature Review

1.3.1 Concept of Financial Inclusion and Exclusion

This study focuses on financial inclusion with respect to the poorest of the poor
(Slum Dwellers and Beggars) and emphasizing a wider connotation of the term
‘financial services’ than defining it is a narrow perspective of owning a savings
account with a bank. The definition of several aspects of the term propounded by
several authors and committees and commissions are reviewed here to arrive at an
acceptable working definition. The earliest references to “financial exclusion” seem
to date from the early to mid-1990s.
Subbarao (2009) Financial inclusion is important because it is considered as an
important condition for sustaining growth. Such access is especially powerful for the
poor as it provides the opportunity to build savings, make investments, and avail
credit. Access to financial services also helps the poor to insure themselves against
income shocks and equips them to meet emergencies such as illness, death in the
family, or loss of employment. It helps them to get away from the clutches of
usurious money lenders. Financial inclusion also permits governments to make
payments such as social security transfers and National Rural Employment Guaran-
tee Programme (NREGA) wages into bank accounts of beneficiaries.
RBI (2009) Definitions of financial inclusion in literature tend to vary on dimen-
sions such as ‘breadth’, ‘focus’, and ‘degree’ of exclusion. The breadth dimension is
the broadest of all definitions which define financial inclusion as a consequence of
social inclusion which prevents the poor and the disadvantaged from gaining access
to the mainstream financial system.
The prominence of the term financial exclusion in the late 1990s parallels the
rising prominence of the concept of social exclusion in social policy. The notion of
“exclusion” is common to both (Chant and Link Associates 2004). Some of the
definitions of financial inclusion reiterating this view are as follows.
EC (European Commission) (2008) Financial Exclusion refers to a situation in
which people encounter difficulties accessing and/or using financial services and
products in the mainstream market that are appropriate to their needs.
Leyshon and Thrift (1995) define financial exclusion as “those processes that
serve to prevent certain social groups and individuals from gaining access to the
financial system”.
Sinclair (2001) A financial exclusion means the inability to access necessary
financial services in an appropriate form. Financial exclusion can be seen as a
consequence of social exclusion. Exclusion can come about as a result of problems
with access, conditions, prices, marketing or self-exclusion in response to negative
experiences or perceptions. Report of the Committee on Financial Inclusion defines
financial inclusion as the delivery of financial services at an affordable cost to vast
sections of disadvantaged and low-income groups.
1.3 Literature Review 5

GOI (2008) Unrestrained access to public goods and services in the sine qua non of
an open and efficient society.
Kamath (2007) The process of ensuring access to timely and adequate credit and
financial services to vulnerable groups at an affordable cost. As banking services are
in the nature of public good, it is essential that the availability of banking and
payment services to the entire population without discrimination is the prime
objective of the public policy. In India, the focus of financial inclusion at present
is confined to ensuring minimum access to a savings bank account.
Leeladhar (2005) The international definitions of financial inclusion have been
viewed from a much wider perspective the ‘focus’ dimension links the other
dimensions of exclusion. This dimension essentially takes care of the potential
difficulties faced by some segments of the population, viz., individuals, households,
or communities in accessing mainstream financial services.
Sharma (2008) It is a process that ensures ease of access, availability and usage of
the formal financial system for all members of an economy.
These definitions emphasize several dimensions of financial inclusion, viz.,
accessibility, suitability, availability, and usage of the financial system. These
dimensions together build an inclusive financial system. Another issue that needs
to be taken care of is whether to measure access or usage; because in transaction
banking and insurance, we can find that people do not use it even if they are having
access to it. The access dimension implies mere access to services while usage
dimension is a broader term requiring examination of aspects like access, suitability,
availability, and actual usage. The World Bank also distinguishes between those
who are ‘formally served’ that is those who have access to financial services from a
bank and / or other formal providers and those who are ‘financially served’ who also
include people who use informal providers.,
World Bank (2005) The term ‘financially excluded’ is only used to describe those
who have no access at all.
The United Nations (UN, 2006) define financially included as the financial the
sector that provides ‘access’ to credit for all ‘bankable’ people and firms, to insurance
for all insurable people and firms and to savings and payments services for everyone.
Inclusive finance does not require that everyone who is eligible use each of the
services, but they should be able to choose to use them if desired. The ‘degree’
dimension is the narrowest of all and defines financial exclusion as exclusion from the
usage of particular sources of credit and other financial services including insurance,
bill payment services and accessible and appropriate deposit accounts.
World Bank (2005) describes exclusion as a phenomenon where access to key
areas such as transaction banking, savings, credit, and insurance.”
6 1 Introduction

Mor and Ananth (2007) Financial inclusion may be interpreted as the ability of
every individual to access basic financial services which include savings, loans, and
insurance in a manner that is reasonably convenient and exible in terms of access
and design and reliable in the sense that savings are safe and that insurance claim will
be paid with certainty.
Vallabh and Chathrath (2006) In India, the focus of the financial inclusion at
present is more or less confined to ensuring a bare minimum access to a savings bank
account without frills to all. However, having a current account/savings account on
its own, cannot be regarded as an accurate indicator of financial inclusion.
Arunachalam (2008) Financial inclusion is characterized primarily as either gen-
eral access to loans or access to savings accounts. Very few risk management and
vulnerability reducing products are available to small holder producers. Financial
inclusion cannot be restricted merely to opening savings accounts and/or providing
credit for consumption/consumer spending but should also encompass delivering
financial products tailor-made to cope with the uctuating earning pattern of
the poor.
Rogaly (1999) defines financial exclusion in the perspective of exclusion from
particular sources of credit and other financial services (including insurance, bill
payment services, and accessible and appropriate deposit accounts)” The review of
the literature suggests that most of the definitions are context-specific, originating
from country-specific problems related to financial exclusion with regard to the
respective socio economic dimensions which assume importance in the public policy
perspective. On the basis of the above review, the following working definition has
been accepted with regard to financial inclusion throughout the study “Financial
inclusion may be interpreted as poor households’ access to basic financial services
from formal and semiformal service providers which include savings, loans and
insurance and other financial services in a manner that is reasonably convenient and
exible in terms of access and design.” In this perspective, the study attempts to
measure financial inclusion as a composite measure that takes into consideration
access to transaction banking, savings, credit and insurance.
Regan and Paxton (2003) note the experience in this sense Financial inclusion
does not only deal with product entry, but also with quality the need for the growth of
interaction with these items Facilities and faith in informed decision-making.
Leeladhar (2005) says multiple FI and FE levels can be created. In the first position
Extreme, we have clients who are being courted actively and persistently Industry of
financial services that have a broad range of services and goods at their disposal. On
the other side, we are ‘excluded’ financially and are refused access to even the most
basic financial goods. They are ‘mega included.’ The “under included” are in the
meanwhile who only use banking facilities for deposits and cash withdrawals. They
have limited access and cannot allow more af uent consumers the exibility to
access.
1.3 Literature Review 7

Basu Priya (2006) found rural families facing a variety of barriers Seek borrowing
from banks. Second, banks claim guarantees that are weak People cannot provide.
Second, bank transfers are also time and costly. No volatile bribes amounting to 20%
of the loan. The average lending time for bank loans is many weeks. The proportion
of informal credit sources has therefore jumped.
Shetty (2006) insists that FI is focused on three pillars: access to finance. Services,
the affordability of such services, and the practical use of such services. FI can only
be done if all three pillars produce positive results. So, FI’s ABC is Advice, Banking,
and Credit.
Bluebook (2006) The nature of FI is to try to ensure that there is a variety.
Appropriate financial services are accessible to all individuals.
Usha Thorat (2006) Account can be used for making small-value remittances at
low cost and making purchases on credit. The same bank account can also be used by
the State Governments to provide social security services like health insurance and
calamity insurance.
Devendraprasad Pandey (2007) The subject of FI has come to the surface essen-
tially as a consequence of the financial sector reform process of the 1990s.
Anderloni et al. (2007) Ownership of a bank account is not enough to promote
meaningful inclusion. An account may be inaccessible due to being overdrawn or
may only.
World Bank (2008) reports that in the absence of an inclusive formal financial
system, poor individuals and small entrepreneurs have to rely on informal sources to
invest in better opportunities. Achieving FI in a country.
Vijay Kelkar (2008) asserts that FI has to be viewed as a business strategy for
growth. Improved FI will mean India becoming a more equal opportunity nation.
Suryanarayana (2008) The growth process between 1993–94 and 2004–05, has
bypassed the majority and was not inclusive. Inclusive coefficient is the lowest in
rural Kerala. At the national level, the inclusion coefficient is higher for the rural
sector than for the urban.
Mandira Sarma (2008) finds that the widely held view that NPAs are a result of
providing credit to the low-income groups, sometimes, in compliance with ‘priority
sector lending’ is not true. Further, a highly capitalized banking system, with a high
‘CAR,’ seems to be less inclusive.
Thyagarajan and Venkatesan 2009 In some districts, at least more than 85 percent
of the no-frills accounts are dormant.
Ignacio and Kumar (2008) A branchless banking channel using mobile phones
could be far more preferable to poor people than the available options.
8 1 Introduction

Drabu (2009) In India, policymakers have for years been going around in circles
with regard to the issue of inclusion.
Bhave (2009) observes that inclusion is not about deciding things for people.

1.4 Problems of Supply-Driven Financial Policies and Poor

Hickson (2001) the very poor people either did not join microfinance programs or
when they joined, they left them very soon.
Navajas and Tejerina (2006) we reached the richest of the poor, not the poorest of
the poor.
Hulme (2000) MFIS virtually never work with the poorest, the mentally and
physically disabled, the elderly, the street children, the destitute, and refugees.
Monlick Poor people prefer to save through informal mechanisms because these
mechanisms are more accessible to them.

1.5 Recent Financial Inclusion Schemes

PMJDY has been drafted on 28th August (2014) as a agship program to include the
unbanked population of the country into mainstreaming the formal banking system
of the country. PMJDY is a national mission to bring comprehensive financial
inclusion of all the households in the country. The scheme is to ensure access to
financial services such as banking/services and deposit accounts, remittance, credit,
debit cards, insurance, and pension in an affordable manner. The scheme is mostly
targeted to the people belonging to below the poverty line but is beneficial to one
and all.
Madukar PMJDY will eradicate poverty and expected to bring financial stability,
financial freedom and financial inclusion of the underprivileged sections particularly
rural areas of the country.
Yonzon and Oveis (2016) PMJDY “is a welfare the program which aims to fill the
subsidy gaps in government-sponsored schemes and to develop saving habits of the
people so that they can inculcate the benefits of their savings at the times of
emergencies”.
Ravi and Gakhar (2015a, b) Financial services that of PMJDY is a good initiative
but not the complete package for financial inclusion the scheme lacks the provision
of financial literacy, most of the bank accounts are inactive and from supply-side,
there is a very huge cost in maintaining the transactions of these accounts and the
problem of collateral in lending loans to the poor.
1.5 Recent Financial Inclusion Schemes 9

Bhatt and Pawar (2017) Awareness of PMJDY is very less among people and
most people are not in a position to run their accounts actively due to lack of low
banking facility in rural areas.
Kaur and Singh (2015) PMJDY is facing the challenges of how to make poor
people more incentive in availing the benefits of modern technology and make them
financially literate.
Bedi Anjana Financial services that of PMJDY is very tough to function in a
smooth way all over the country because the banking infrastructure is very limited
in rural areas.
PMSSY 22 January (2015) Secure the future of girl child Sukanya Samriddhi
Yojana is an ambitious small deposit savings scheme for a girl child. Under the
scheme, a savings account can be opened in the name of a girl child and deposits can
be made for 14 years. After the girl reaches 18 years of age, she can withdraw 50% of
the amount for marriage or higher study purposes. After the girl completes 21 years
of age, the maturity amount can be withdrawn including the interest at rates decided
by Government every year. The investments and returns are exempt from section
80C of Indian income tax act. The maximum investment of Rs. 1.5 Lakh per year can
be made while the minimum deposit is Rs. 1000/- per year. In case of more than one
girl child, parents can open another account on a different name but only for 2 girl
children. The only exception is that the parents have twins and another girl child.
Beti Bachao, BetiPadhao is also working under the same scheme to generate
awareness and improving the efficiency of welfare services meant for women. The
scheme is to have as a focussed intervention and multi-section action in almost
100 districts with a low Child Sex Ratio (CSR).
PMMY 8 April (2015) had been launched for the financial support of the micro-
enterprises sector. Pradhan Mantri MUDRA (Micro Units Development and Refi-
nance Agency) Yojana was launched with the purpose to provide funding to the
non-corporate small business sector. Pradhan Mantri Mudra Yojana (PMMY) is
open and is available from all Bank branches across the country. The small
businesses/start-ups or entrepreneurs can avail loans from Rs. 50 thousand to
10 Lakh to start/grow their business under the three, Shishu (50,000), Kishore
(50,000–5 Lakh), and Tarun (5 Lakh–10 Lakh) categories of the scheme. As per
the official website of PMMY, 27344053 numbers of loans have been sanctioned
under the scheme till 26 February 2016. The amount sanctioned has reached more
than Rs. 1 Lakh Crore.
Gaurav Sinha and Piedra (2021) The maximum population of the country is
dependent on micro small medium enterprises are facing the problem of access to
credit.
MUDRA Bank, as a new supply based financial institution in dealing with the
problems of “high-cost credit, Collateral needs Lack of access to markets, limited
access to equity.
10 1 Introduction

PMJJBY 9 May (2015) Provide life insurance cover to all Indian citizens Pradhan
Mantri Jeevan Jyoti Bima Yojana is a government-backed life insurance scheme in
India aimed at increasing the penetration of life insurance cover in India. The scheme
is open and available to all Indian citizens between the ages of 18–50 years. Under
the scheme, the policyholder can get a life insurance cover of Rs. 2 Lakh with an
annual premium of just Rs. 330 excluding service tax. All the Indian citizens
between 18–50 years of age with a saving bank account are eligible to avail of the
scheme.
PMSBY9 May (2015) Provide accidental insurance cover to all Indian citizens
Pradhan Mantri Suraksha Bima Yojana is also a government-backed accident
insurance scheme in India aimed at increasing the penetration of accidental insurance
cover in India. The scheme is open and available to all Indian citizens between the
ages of 18–70 years. Under the scheme, the policyholder can get a life insurance
cover of Rs. 2 Lakh with an annual premium of just Rs. 12 excluding service tax. All
the Indian citizens between 18–70 years of age with a saving bank account are
eligible to avail of the scheme.
Yadav and Mohania (2017) PMSBY “should be more exible by avoiding stage-
based process in delivering funds to the beneficiaries. Need for more suitable
market-based innovation to have full security of poor people who are generally
working under unorganized sectors across the country.”
Atal Pension Yojana, 9 May (2015) Increases the number of people covered under
any kind of pension scheme. Atal Pension Yojana is one of the three Jan Suraksha
schemes launched by PM Narendra Modi. APY is aimed at increasing the number of
pension scheme beneficiaries across the country. The scheme is especially targeted
to the private unorganized sector and is open to all Indian citizens between the ages
of 18–40 years. Under the scheme, the beneficiaries have to make a contribution for
at least 20 years before he/she can get pension after attaining the age of 60 years. The
scheme provides a monthly pension of Rs 1000 to Rs. 5000 per month based on the
contribution amount.
Mitchell and Mukherjee (2016) “In under developing countries millions of the
workers are being excluded from formal pension and social security systems”. Poor
people are having instabilities in their lives. They need social security, economic as
well as political security government of India have recently announced social
security packages to cover the unorganized poor people under them. Atal pension
is one of the programs whose aim is to provide benefits to the poor public. But the
scheme will provide only 1000 rupees to the beneficiaries after the gap of 20 years
which is a very low sum as up to 5000 rupees as per the capability of the scheme
cover but again poor people will get low securities of life during their old ages. These
social security schemes are mere hopes but not the reality for the poor. That is why
poor people are not taking part in these schemes.
1.8 Statement of the Research Problem 11

1.6 Research Questions

1. What is financial inclusion all about?

2. How to measure FI?
3. What is the position of the country in Financial Inclusion?
4. When will we achieve 100% financial inclusion? Can we achieve it or not?
5. How inclusive is financial access among Slum Dwellers and Beggars in India?
6. To check, how inclusive is recent financial inclusion schemes among slums and
beggars in Lucknow and Kolkata?
7. To check, Is there any impact of Financial Inclusion of socio-economic condi-
tions of beggars and slums in Lucknow and Kolkata?
8. To check, how inclusive is recent financial inclusion schemes among slums and
beggars in Lucknow and Kolkata?
9. To check, Is there any impact of Financial Inclusion of socio-economic condi-
tions of beggars and slums in Lucknow and Kolkata?

1.7 Scope of the Study

Financial inclusion services are supply-driven from that of 1947 to date there are not
many more benefits of these schemes in promoting the welfare meant of marginal
sections of the society. This study had considered two urban marginal groups Slum
Dwellers and Beggars who have been excluded by the policymakers and government
to date. This study is first the hand study, investigates recent financial inclusion
schemes (PMJDY, MUDRA, PMSBY, PMJJBY, and APY) and their performance
in the case of these populations. This study had also investigated both supply and
demand constraints of policies or schemes which are making them fail at the gross
route level.

1.8 Statement of the Research Problem

It is widely recognised that both urban and rural areas have pockets of poverty and
financial exclusion, especially among slum-dwellers. India had a slum population of
65.5 million according to the Census of India 2011, which accounted for 22.5
percent of lives in slums, spread across 2613 cities and urban population. In India,
non-existence of bank branches in the region, physical distance of the bank from the
citizens, fixed and limited timing of the banks, lack of knowledge of the advantages
of getting a bank account are common reasons for financial exclusion, and, above all,
low incomes that made it difficult to save. The causes are distinct in the case of the
urban poor. In the urban areas, there are many banks that are not so far from the
slum’s dwellers and beggars.
12 1 Introduction

The distance between the bank and the slums and the Beggars cannot, therefore,
be a cause of financial exclusion. Against this backdrop, a report on financial
inclusion in India was felt to be major clues will be given to understand the
existence, causes and determinants of the financial Inclusiveness. The main objective
of the study is to study the effect of recent schemes for financial inclusion on the
socio-economic conditions of slum dwellers and beggars, how their socio-economic
status is determined by access, and the impact of financial access on financial and
economic behaviour.

1.9 Objectives of the Study

1. To study the access and non-access pattern of recent financial inclusion schemes
to the poorest of the poor.
2. To explore the changes in socio-economic conditions of the poorest of the poor
due to recent financial inclusion schemes.
3. To analysis of the impact of recent financial inclusion schemes on Economic and
Financial The behavior of Poorest of the Poor

1.10 Hypothesis

1. Due to lack of awareness and problems of illiteracy the population of the poorest
of the poor have very limited access to recent financial inclusion schemes.
2. There is not any a significant change took place in socio-economic conditions of
the poorest of the poor after implementation of recent financial inclusion
schemes.
3. There is significant impact of recent financial inclusion schemes on economic and
financial behaviour of poorest of the poor.

1.11 Methodology

This study has been carried at Lucknow and Kolkata in 2019 February. The purpose
of the study was to check the impact of financial inclusion schemes on socio-
economic conditions of slums and beggars in Lucknow and Kolkata. Both primary
and secondary data has been collected. The secondary data has been collected from
Census of India, NSSO, RBI, World Bank and Financial survey of India, etc.
Both qualitative and quantitative data has been collected with the help of a well-
designed research schedule. Hindi and English languages have been used for
collecting data. Sampling technique starfield simple random sampling have been
1.11 Methodology 13

used in case of slums dwellers in both Cities while simple random sampling in the
case of beggars in Lucknow and Kolkata. The sample size of the study is 3oo
samples from slums dwellers and 100 samples from beggars in both cities.

1.11.1 Tools of Data Analysis

The statistical packages used for the analysis are STATA 14, SPSS 21, EXCEL. The
knowledge obtained is analysed with the help of different methods and techniques.
These include, Histogram, Pie Charts, and Descriptive Statistics. Research Methods
used are chi-square test for Hypothesis. To, understand the financial inclusion and
economic status of both slums and beggars, various Index’s has been developed
i.e. Index on Financial Inclusion (FII), Index for Financial Literacy (FLI), Index of
Financial Attitude (FAI), Index on Financial Information (FKI)and SEI (Socio-
Economic Index). The Models of regression, Dummy regression model, and Models
of binary logistic regression has been used to draw the statistical inferences.
MANOVA model has been used to explore economic and financial behaviour of
slum dwellers. Moreover, all the tool and techniques of statistics and econometrics
has been explained in detail in the concern chapters (Figs. 1.1, 1.2, 1.3, 1.4, 1.5, 1.6,
1.7, and 1.8).

Hanuman SETU
(14) samples

Charbagh Railway
Staon
Khaman Peerbaba Beggars in Lucknow 15(samples)
Charbagh Railway 50(samples)
Staon
(21) samples

Fig. 1.1 Flow chart of sample size among beggars in Lucknow and Kolkata (A)
14 1 Introduction

Fig. 1.2 Map of slum Dwellers in Lucknow

Patuli Jamia Masjid

(23) samples

Beggars in
Kolkata Kalighat Kolkata
(50)samples (12)samples
Park Circus Kolkata
(15) samples

Fig. 1.3 Flow chart of Kolkata Beggars (B)

1.12 Chapter Plan

Chapter 1. Introduction
This chapter explains the essence and need for financial inclusion in the Inclusive
Development Mechanism and describes the importance of India’s financial exclu-
sion. This chapter also includes an in-depth analysis of the latest literature related to
the Study field. The studies were presented as per the sequence of the objectives of
the study. Research gap in the form of research questions has been discussed. It
1.12 Chapter Plan 15

Fig. 1.4 Map of Beggars from Kolkata

sharam Bihar Nagar Lucknow

(50) SAMPLES

LUCKNOW
SLUMS
150 SAMPLES
Mawaiyya Bihar Nagar
Ambedkar Nagar
Lucknow
Ruchi Khand
(50)SAMPLES (50)SAMPLES

Fig. 1.5 Flow low chart of sample size among Slum Dwellers in Lucknow and Kolkata (A)

describes the statement of the problem and the research goals of the present analysis.
The research methodology used is also outlined in this chapter, the way the data for
the study and the statistical instruments used for data analysis were collected.
Chapter 2. Financial Theories and Their Relevance in Financial Inclusion
Chapter 2 is focused theories relevant to financial inclusion. This chapter is divided
in to four sections. The first section talks about theories which gives us a deep
understanding about income, savings and other determining factors. Further,
16 1 Introduction

Fig. 1.6 Map of slum Dwellers in Lucknow

Patuli Kolkata
(50) SAMPLES

Kolkata
SLUMS
150 SAMPLES

Patuli Township Park circus Kolkata

(50)SAMPLES (50)SAMPLES

Fig. 1.7 Flow chart of Slum Dwellers in Kolkata

sections two talks about individual perspectives and their relevance to financial
inclusion. Section third, Talks about sociological perspective and section fourth
draws light on institutional factors.
Chapter 3. Impact of Recent Financial Inclusion Schemes on Status of Financial
Inclusion in India: Secondary Data Analysis
Chapter 3 analysis the impact of recent financial inclusion schemes with secondary
data analysis, collected from world bank and RBI to understand India’s financial
inclusion position. This chapter is investigated between two periods of time frame
(2005 to 2006) before 2014 and after two 2014 to check the impact of recent
financial inclusion schemes.
1.12 Chapter Plan 17

Fig. 1.8 Map of slum Dwellers in Kolkata

Chapter 4. Socio-Economic Conditions and Access and Non-Access Pattern

of Recent Financial Inclusion Schemes to the Poorest of Poor
Chapter 4 illustrates the socio-economic conditions of both beggars and slums
dwellers. Further, it also explains access and non-access patterns of financial prod-
ucts and services, and Patterns of access and non-access with reference to socio-
economic factors.
Chapter 5. Financial Inclusion Schemes and Changing Socio-Economic Status
of the Poorest of the Poor
Chapter 5 shows how the access and non-access affecting the socio-economic status
of slums dwellers and beggars. Use of financial inclusion index, socio economic
index, financial behaviour index, financial attitude index and financial knowledge
index. Further we have used twin regression model to check statistical inferences.
Chapter 6. Impact of Recent Financial Inclusion Schemes on Economic
and Financial Behaviour of Poorest of the Poor
Chapter 6 discusses in details income and financial behaviour patterns. In section
two we have discussed income expenditure mismatch in general and among access
and non-access holders, and finally the MANOVA model has been used to check
how fundamental variables are explain financial access.
Chapter 7. Policy Recommendations for better Future
Finally, Chap. 7 draws the conclusion and recommendations resulting from the
current study.
18 1 Introduction

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Chapter 2
Financial Theories and Their Relevance
in Financial Inclusion

2.1 Introduction

This chapter is a composition of various theories which are having a direct link with
the financial behavior of individuals. The financial behavior is simply described by
money management of a person at a point of time. There are many determinants that
are playing roles in the financial management of a person who is income, credit,
savings, insurance, and other related services. Besides this, an individual is faced
with psychological and social determining factors. Therefore, the following chapter
will analyse various income and consumption theories and their relevance with both
the financial behavior of underprivileged sections of the society and the institutional
working mechanism towards financial inclusion.
So, the following chapter has been divided into four parts, First theoretical
background, second individual-oriented perspectives, third sociological perspec-
tives, and fourthly institutional perspectives. All the four sections will put light on
the nature of savings among poor people and their responsible reasons why they are
behaving like that? And also put light on whether these theories are suitable for
developing countries like India or not? The main focus of this chapter relies on
individual, social, and institutional evidence from various studies to conceptualize
the broad perspectives of the financial behavior of the poorest of the poor, etc.
National saving includes public and private savings. Household saving typically
constitutes a major part of private saving compared to private corporations
(Gersovitz, 1988; Rehman, Bashir, & Faridi, 2011). Saving is an important way to
improve the wellbeing of households. It allows households to smooth consumption
in case of high-income volatility and increase the opportunity to invest in physical
and human capital (Ashraf et al., 2003). For households, the trade-off between
current and future consumption results in saving (Sturm, 1983).
There are numerous motives leading to the decision of saving. For instance,
saving for retirement aims at financing future consumption when income decreases
or becomes zero (life-cycle). Also, households save when there is uncertainty about

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 21
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_2
22 2 Financial Theories and Their Relevance in Financial Inclusion

future income (precautionary saving) or when they intend to leave bequests (Sturm,
1983; Gersovitz, 1988). Additional motives include, improvement (increasing con-
sumption) or inter-temporal substitution (enjoying interest), investing in a business,
or accumulating down-payment of durables (Browning &Lusardi, 1996; Coleman,
1998; Karlan & Morduch, 2009).

2.2 Theoretical Background

Actually, Financial access is defined by various theories from time to time, the main
the thrust of financial services both from the demand and supply side are mainly
dependent on the ability and capability of the individuals.
Katona (1975) savings are taking places by an individual’s ability and willingness,
but there are numerous factors which are playing a significant role in once ability and
willingness. The following factors accessed by various theories are such as in
(1) Life cycle phase, Education, Employment, and Financial Literacy, (2) Income,
Wealth, Risk attitude, and saving motive. (3) Family structure, House type, Rural-
Urban, and Mortgage.
Wärnderyd (1999a) Savings are treated as residual, savings are considered differ-
ences as net worth at both end and net worth at the beginning of the period which is
excess of income over expenditure in a period. Here arises a question why, and for
what individuals are saving their incomes?
Keynes (1937) also gave three motives of the income which individuals are going
with (1) Transactional Motive (2) Precautionary Motive and (3) Speculative Motive.
Poor people are vested with their transactional motive which covers their daily
expenditures like basic needs etc. and of the two are motive are out of there box
due to the problem of challenge economic environmental conditions.
Katona (1975) identified three types of saving motives: (1) contractual, (2) discre-
tionary, and (3) residual saving, both contractual and residual savings are a exible
type of savings like saving for buying a gift, pay fee of the children are parts of the
contractual type of savings but residual type of savings are all those savings which
are common in nature like expenditure on goods and services and the remaining part
of income is considered as residual but the discretionary type of savings are those
savings which are driven by the risk forces of a person in his life like emergencies
(like accidents, illness and old-age purposes).
Wärneryd (1999b) identifies four motives: (1) habit or controlling expenditures,
(2) precautionary motive, (3) bequest motive, and (4) profit motive.
Modigliani (1966) People are saving during working years and consuming them
after retirement but the savings are altered by wages, wealth, and other variables.
Hence is it clear that working hours are also playing role in individuals saving
behavior?
2.2 Theoretical Background 23

On the national level, the role of financial institutions in providing financial

services and social security services by the government via tax and social security
systems, such as unemployment benefits, pensions, and tax levels, also have an
impact on the ability and willingness to save. In addition, the way banks compete
and are regulated play a role, not least for the interaction between banks and
customers. On the one hand, saving ratios have started increasing in India, due to
the PMJDY Scheme. On the other hand, recent developments indirect transfer
scheme has started working in the country but there are still poor qualities of social
security’s programs like pension systems for old age people which is still very low as
per NSSO 66TH ratings of Rangarajan committee,
Income is identified as a significant determinant of saving. Current income as a
key the determinant of saving started by the standard Keynesian model. This model
implied that saving depends on current income ceteris paribus. When income
increases, part of the increase is used for consumption while the rest is saved.
Therefore, as Eq. 2.1 shows, when income increases, the saving rate increases:

St ¼ a þ sYt þ ε ð2:1Þ

Such that St denotes savings in period t while Yt is the income in period t and s is a
constant marginal propensity to save (MPS) that ranges from zero to one. As income
increases, average propensity to save (APS) increases (Mikesell & Zinser, 1973; Liu
& Hu, 2013).
The tests of this equation showed that saving increases with income at a decreas-
ing rate. A potential explanation is that a shift in household income to higher levels
will introduce households to modern consumption opportunities leading to a
decreasing saving rate (Mikesell & Zinser, 1973; Liu & Hu, 2013). The implication
of the Keynesian theory is that low-income households save a lower ratio of their
income compared to high-income families. Different theories, that attempted to
explore the relationship between income and saving, were contradictory. For
instance, it was found that the poor consume at their subsistence level, yet they
often have little saving to smooth consumption in case of income shocks (Schmidt-
Hebbel, Webb, & Corsetti, 1992; Meghir, 2004).
Income uctuations can also affect savings. An insightful theory supporting this
notion was introduced by Friedman (1957), the permanent income hypothesis. The
permanent income hypothesis has the below linear form:

St ¼ a0 þ a1YPt þ a2YTt ð2:2Þ

Such that St is savings and YPt is permanent income in period t while YTt is
transitory income. The common definition of permanent income is long-term
expected income that does not take into consideration temporary in uences like
weather or rainfall gains. Transitory income denotes the difference between actual
income Yt and permanent income. The implication of the permanent income, the
hypothesis is that individuals do not consume transitorily income (MPST ¼ 1)
24 2 Financial Theories and Their Relevance in Financial Inclusion

Net Wealth
Disposal Income

Saving Consumption

Dis-saving Dis-saving
ENTRY IN TO LABOUR FORCE REITERMENT DEATH

Fig. 2.1 Source: Sturm (1983)

so temporary changes in transitory income will directly affect household saving

(Schmidt-Hebbel et al., 1992; Meghir, 2004). Friedman based his work on the
intuition that income is more volatile than consumption.
Consumption is based on long-term expectations about income since households
prefer to smooth consumption over time and avoid short-term uctuations (Meghir,
2004). The implication of this theory on household behavior is that the household
will save today if their income is higher than the future and vice versa. For example,
in economic crises, current income becomes lower than future income so people
dis-save to cover current consumption (Berry, Williams, & Waldron, 2009).
Income uncertainty also determines saving as indicated by Leland (1968). He
defined precautionary saving as additional savings due to uncertainty about future
income.
When there is higher uncertainty about future income, the marginal utility of
expected consumption in the future becomes higher leading to more saving at the
present time (Deaton, 1997; Loayza, Schmidt-Hebbel & Servén, 2000; Jongwanich,
2010). For instance, if a household is working on a temporary basis or expects to lose
the job, the current savings will increase (Berry et al., 2009). Coleman (1998) added
that precautionary saving is witnessed in all stages of life. For example, students who
are uncertain about earning as expected in the future can save while the elderly who
wish to save for protection against shock could also have precautionary savings.
Age is another determinant of saving that was recognized by the life-cycle the
hypothesis developed by Modigliani and Brumberg (1954). This theory was mainly
concerned with the motive of saving for retirement. It assumed that agents prefer to
smooth consumption over their life span. Therefore, they save when they are young
and working by consuming less than the disposable income while dissaving take
place when they are old and retired (Fig. 2.1). In this way, wealth is maximized at
retirement age then decreases as consumption increases after retirement. Hence,
saving is positive at a young age, negative at old age, and averaging zero if no
bequests are made or received during the lifetime.
2.2 Theoretical Background 25

This theory assumes that there are zero population and income growth. Thus, the
dissaving of the elderly offset the saving of the young population. If this assumption
is relaxed, the net saving will be positive due to a larger young population earning
income compared to the retired ones. Also, if per capita income is growing, the
saving will increase to maintain a future level of consumption since households aim
at smoothing their consumption over the lifetime (Mikesell & Zinser, 1973). This
theory shows that household saving behavior is determined by the length of the
income-earning period, retirement duration, market interest rate, time preference,
and risk aversion (Sturm, 1983).
Based on life-cycle hypothesis, Diamond (1965) presented an Overlapping Gen-
eration Model (OLG) by extending the analysis of Samuelson (1957). The model
assumed that there are three markets (labour, output, and capital) and two living
generations who are overlapping. Each person lives for two periods of time. The
person works during the first period so time is divided between leisure and work.
During the second period, the person retires then dies by the end of the period. Since
there are no transfers or bequests, the wage, earned in the first period, is divided
between consumption and saving. In the second period, the consumption of the
person is financed by savings plus interest rates (Romer, 2011).
Deaton (1989) argued that some of the aforementioned theories have limited
application in developing countries where the demographic structure is different.
The size of a household is larger in poor countries and when grandparents, children,
and grandchildren live in the same household, there is a lower motive to save for
retirement due to intergenerational transfers. Also, in developing countries, income
is mostly coming from agriculture activities so uncertainty is higher which hinders
the accurate estimation of long-term income. Due to credit constraints, households
face difficulties in borrowing so a primary motive for poor households is to save for
consumption smoothing. As result, saving in developing countries better fits pre-
cautionary saving instead of saving for retirement or bequest.
Theories in economics have emphasized income and age as key responsible
factors of savings (Modigliani & Ando, 1957). Both Behavioural economists as
well as economic psychologists have accepted the role of self-discipline motives,
and other individuality characteristics on savings (Katona, 1975; Thaler & Shefrin,
1981; Wärneryd 1999a). Sociologists analyzed class and social stratification as
in uencing determinants of savings and capital accumulation (D’Souza, 1981;
Sørensen, 2000). On the other hand, social workers have also examined the core
institutional factors which are access, incentives, expectation facilities in promoting
savings (Beverly & Sherraden, 1999; Sherraden, 1991; Sherraden, Schreiner, &
Beverly, 2003).
Following the review is based on three perspectives which are individual, social,
and institutional.
26 2 Financial Theories and Their Relevance in Financial Inclusion

2.3 Individual-Oriented Perspectives

Neoclassical economists were of the view that individuals being rational and have
perfect knowledge of market access. Two important theories of neoclassical are the
life cycle hypothesis (LCH; Modigliani & Ando, 1957); and 2) the permanent
income hypothesis (PIH; Friedman, 1957). Both theories have predicted individual
and household long term consumption opportunities via savings and consumption in
terms of their expected future income. The LCH believes that savings could be used
smoothly for consumption if incomes directly vary with age. The main idea of LCH
is that economically active people are savers where children and retired people are
not. Differences in consumption and savings of the people are directly represented
by the age of the people (Modigliani & Ando, 1957).
The PIH said that savings are perceived due to permanent income and individuals
are free to save or borrow to run their expenditures smoothly, so both the theories
LCH & PIH are of the view that savings are the prime function of the income.
Now both theories are showing income as a root cause of savings but here arises
the question at what level of income individuals or households could save their
incomes? As the study is working in favor of poorest of the poor at what income
poorest of the poor could save and is it the applicable same way for the poor people
to save in a similar condition that of middle or high-income groups in the country.
Developing countries like Kenya where household income is found statistically
significant performer of savings among farmers, entrepreneurs, and teachers (Kibet,
Mutai, Ouma, Ouma, &Owuor, 2009). And similarly, that of Uganda it is found that
both the permanent and transitory incomes have significantly increased the level of
savings in saving bank deposits among households (Kiiza & Pederson, 2002). India,
Pakistan, and the Philippines also became the witness of income, as an important and
superior predictor of savings (Agrawal, Sahoo, & Dash, 2007; Athukorala & Sen,
2004), Morocco (Abdelkhalek, Arestoff, de Freitas, & Mage, 2009), (Rehman,
Bashir, & Faridi, 2011). So from the above studies savings are directly related to
higher incomes of the houses hold.
These studies showed us that only higher income households are in a position to
save what about the low-income earners? Are they able to save? If yes? How can and
what are the factors responsible for them which restricts or constraints which keeps
them away from residual savings.
Again, in developing countries Savings has been defined with dependency ration
an increase in dependence ration results in decreasing the savings and vice versa
among the households in Kenya (Kibet et al., 2009), Indonesia (Johansson, 1998),
India (Ang, 2009), China (Ang, 2009), Morocco (Abdelkhalek et al., 2009), and
Pakistan (Rehman et al., 2011).
In India, the working population is working under informal economy which is
excluded on larger bases from the formal, the banking system of the country and the
dependent population is not officially registered due to various reasons, most of the
studies are witness to that the dependent population of the country is decreasing day
by day which results in increasing savings among the households across India and
2.3 Individual-Oriented Perspectives 27

the global level is prevailing as per the LCH. But some of the researchers are totally
against it, that there is no significant relationship between dependency ration and
saving rates particularly in developing countries (Cornia & Jerger, 1982; Deaton,
1992; Schmidt-Hebbel et al., 2002). In developing countries like India and other
Asian countries and Sub Saharan African countries where most of the dependence
population working as a child laborers and are economically active but are not
included in the official gazette of the country therefore it also makes a point about
the dependence ratio and saving rates which have been supported by numerous other
studies, in which they stressed on age factor differences among dependence ratio
(Mason’s (1988). In the Philippines where it is found that there is negative relation-
ship between young dependent factors and savings were in the case of adult the
dependent population showed a significant positive relationship with savings
(Bersales & Mapa, 2006). The evidence of neoclassical theories that of LCH &
PIH are problematic in defining them in case of developing countries (Rosenzweig,
2001). Most people in developing countries are having low incomes and less access
to financial services and individuals are free to save and invest, so poor people in
developing countries cannot save the same way that of high-income households in
developed countries.
The permanent and temporary income theories didn’t fit in case of developing
countries because people are having less and irregular incomes which restrict them to
save their incomes for long run purposes such as retirement and emergencies of life
(accidents, oods, natural calamities, etc) because their incomes hardly allow them
to fulfill their subsistence consumption level. The other reasons in developing
regions where households are having a more dependent population with low incom-
ing settings so there are differences in the life cycle of individual and households
with unknown age factors of which population is affecting savings decisions
(Deaton & Paxson, 2000; Rosenzweig, 2001).
Besides neoclassical economic theories, the study is also going to seek an analysis
of saving behavior with respect to psychological and behavioural perspectives which
are not taking the case of the rationality of people in deciding savings of the people
rather believing on some other personality and attitudinal variables which affects
savings of the people.
Early economists have also developed faith in psychological factors on savings
such as Jevons (1965), Marshall (1961), and Fisher (1930). Although they accepted
that savings depend on economic factors, mainly income and its size and regularity,
they also consider that there are various psychological characteristics that manipulate
the temptation to spend and forego saving. Although some psychologists have
investigated psychosomatic determinants of saving behavior than economists,
there are many established psychological models on savings behaviors, that of
Katona (1975), Ölander and Seipel (1970), and Lindqvist (1981). For instance,
Katona’s theory of saving (1975) is partly determined by income and partly by
some other independent prevailing factors. Two important factors are the ability to
save (mostly objective data) and willingness to save (a variety of psychological
variables). The ability to save refers to those who can save, whereas willingness to
save is related to the degree of optimism or pessimism of economic conditions
(Katona, 1975).
28 2 Financial Theories and Their Relevance in Financial Inclusion

Therefore, ability to save does not guarantee savings because savings is itself
determined by psychological factors that of individual’s choice to save. But some
evidence from industrialized countries showed less psychological intervention on
savings. (Furnham, 1985; Lindqvist, 1981; Lunt & Livingstone, 1991), and some
evidence are determined by personal factors including optimistic and pessimistic
economic conditions of the individuals (Lunt & Livingstone, 1991), so these factors
are controlling individual decisions (Lunt & Livingstone, 1991), that of savings
(Sherraden & McBride, 2010), and also future expected orientations(Webley &
Nyhus, 2006) are connected with saving behaviours.
Behavioural economics has been in-sighted from both psychology and econom-
ics. Behavioural economics became successful in developing some of the unrealistic
assumptions on standard economic models of human behavior, such as unbounded
rationality, unbounded willpower, and unbounded “selfishness” (Shefrin & Thaler,
1988; Thaler, 1994). So, from this perspective common human characteristics that of
self-control and ability of a person to delay in gratification, use of the mind, and uses
of rules-of-thumb, default options, shape financial behaviours and economic deci-
sions (Ainsle, 1975; Angeletos, Laibson, Repetto, Tobacman, & Weinberg, 2001;
Laibson, 1997; Mullainathan & Thaler, 2000; Shefrin & Thaler, 1988; Thaler,
1981). So, these approaches could make individuals behave incontinent ways with
their individual priorities. Therefore little is known about developing countries about
explanatory powers on saving behavior of low-income individuals but on the other
hand numerous studies of industrial countries have shown self-control (Ameriks,
Caplin, Leahy, & Tyler, 2004; Moffitt et al., 2010; Romal & Kaplan, 1995), and use
of default options (Madrian & Shea, 2000; Thaler & Benartzi, 2004) are helpful for
middle- and upper-income individuals and households.

2.4 Sociological Perspective

Social stratification theories refer distribution of power in societies. The divisions in

society on the bases of economic conditioning of the people which forms different
groups in the societies which are classes and these classes are further divided on the
bases of income, caste, religion and economic status (D’Souza, 1981; Weber, 1967).
Both class and social stratification are the deciding factors which are affecting the
saving behaviour among low income households. Individuals and households from
low income families are also facing the problem of lack of awareness about services
where they could save are use their assets to have positive returns.
Social stratification theory is of the view that inequalities in societies are due to
nature of access of institutional services and resources and those institutions who are
providing these services on the name of poor without benefiting the poor (Crompton,
2008). But there is hope that class and social stratification are the two powerful
determinants which could shape the savings and asset accumulation patterns among
the poor households. Demands of social network members have made it difficult for
family members to save and accumulate their assets (Stack, 1974). Many evidences
2.5 Institutional Perspective 29

have suggested that poverty is the hindrance which interprets poor people to access
financial services (Caskey, 1997; Chiteji & Hamilton, 2005; He in & Patillo, 2002).
Procession of assets is beyond the control of an individual, because of cultural
origins (Al-Awad & Elhiraika, 2003), differences of gender norms (Chowa, 2008),
and financial societal roles in families, schools and other civil societies (Chiteji &
Hamilton, 2005; Chiteji & Stafford, 1999; Cohen, 1994), and race (Oliver &
Shapiro, 1995; Shapiro, 2004). Sub Saharan Afrian and developing countries across
world have showed that class related factors are worthy in explanation of saving
behaviour of low-income countries. Likewise, education has been found one of the
significant factors of savings in Kenya (Kibet et al., 2009), and similar studies from
Philippines (Bersales & Mapa, 2006) but not in India (Bersales & Mapa, 2006).
Besides this higher education and occupation of the individuals are the deciding
factors about saving rates in rural Kenya (Kibet et al., 2009), availability of increas-
ing credit facilities has improved savings in Uganda (Kiiza & Pederson, 2002).
Households accessing credit consistently are holding higher savings than households
without access but however in Kenya improvement in credit availability has
decreased savings among rural people(Kibet et al., 2009). Mostly poor people are
using credit for consumption purposes rather than for income generating purposes.
Furthermore, class related factors, like education also defines whether the household
owner possesses formal bank account (Kiiza & Pederson, 2002). Low income people
in developing countries mostly are saving in informal sources which are less secure
and safe than formal saving account sources (Collins et al., 2009). In Pakistan
increases in income have led higher rate of participation in both formal and informal
saving sectors. However higher levels of income have led people to use formal
institutions very widely than that of informal institutions (BISI an informal saving
committee like rotating savings and credit association) (Carpenter & Jensen, 2002).
And lastly the maximum use of formal institutions is by educated and literate people
in developing countries formal institutions may face sever impede because of
illiteracy and low education (Carpenter & Jensen, 2002).

2.5 Institutional Perspective

Institutional theories are of the view that individuals or households which lack to
save are due to institutional factors that obstruct them. From time to time intuitional
minds against the poor as they are unable to save because they don’t have the same
capabilities that of higher-income people (Beverly & Sherraden, 1999; Sherraden,
1991). Otherwise, if the poor people have been provided the same opportunities,
they may be in a better position to save and access all other services. So, these are the
institutions that are responsible for such a discriminatory approach, which have
made restrictions from time to time on the use of all saving services for the poor
(Beverly & Sherraden, 1999). The institutional theory posits that institutions affect
worldwide and affects financial decisions and behavior of the people (Beverly &
Sherraden, 1999). Almost seven institutional-level dimensions also in uence
30 2 Financial Theories and Their Relevance in Financial Inclusion

savings and asset accumulation which are access, information, incentives, facilita-
tion, expectations, restrictions, and security (Beverly & Sherraden, 1999; Sherraden
& Barr, 2005; Sherraden et al., 2003; Ssewamala & Ismayilova 2009). So, these are
institutional factors that are related to savings and asset building. However, it is
found in Uganda that closeness of financial institution to the households are related
to whether a household will open a formal saving bank account or not (Kiiza &
Pederson, 2002). and the same study have given evidence that urban households
have opened more deposit accounts than their rural counterparts. Higher transaction
costs have also shown negative effects on the level of savings in Ugandan (Kiiza &
Pederson, 2002) and rural Kenyan households (Dupas & Robinson, 2009). Dupas
and Robinson (2009). Mostly individuals with small businesses have opened savings
accounts, and some evidence from Kenya, kibet, et al. (2009). It is also found that
higher transport costs are also having a negative impact on savings among rural poor
people. Therefore, these evidences suggest that the poor could be better off if
provided all the services at a cheaper rate. Institutional schemes, products, and
their information to the general masses of the societies is also a major responsible
factor for accessing these financial services. Evidence from Uganda that an increase
in opening banking accounts we households became well aware of institutional
services (Kiiza & Pederson, 2002). In the Philippines, the cheap savings product
has helped low-income women save (Ashraf, Karlan, & Yin, 2006).

2.6 Conclusion

From the theoretical and the other empirical evidence of studies has shown that poor
people are saving less as compared to middle and higher-income families, because of
Social, Economic, Psychological, and the Institutional factors. Financial education
and financial incentives can help the poor to save more. Institutions are also
excluding people from taking part in financial activities by tight rules and regula-
tions. Poor people are always in traps due to which it becomes tough for them to save
or think about the use of various banking services. The saving behavior of poor
people is collectively determined by socio-economic conditions and as well as by
institutional barriers etc.
In this study, we try to understand the theoretical bases of financial inclusion.
Financial inclusion is a spectrum of various dimensions like savings, credit, and use
of various banking products by poor people and what is the status of financial
inclusion among this urban poor. Savings are concerned one of the fundamental
variables which improve the overall wellbeing of the people to fight life crisis.
Further, savings itself is decided by various other parameters like income, Human
capital, assets, and other properties available to the people, etc. Besides, this savings
is commonly done to meet unpredictable activities like health issues, accidents,
education of children, the marriage of children, etc. Savings basically depends
upon the ability and capability of an individual he/she has. As Katona (1975), said
References 31

it is decided by the ability plus willingness. On similar grounds, Keynes (1937)

discussed three motives of the savings like transactional, precautionary, and specu-
lative motives. Katona again in (1975) explains savings on three grounds contractual
savings, residual savings, and discretionary savings. Similarly, warheryd (1999)
identified four motives, habit or controlling expenditure, precautionary motive,
bequest motive, and the profit motive. Modigliani explained savings by working
years and retirement years. Sturm (1983), argued that people normally save during
earning years until retirement age. After retirement, they are dissaving. Romer
(2011) said the earnings in initial years are distressed into two parts consumption
and savings. People ones reaching to the retirement age savings are financed plus
interest rate to fulfill consumption requirements. Deaton (1989) said in developing
countries poor people have large family sizes, due to which they are only saving for
consumption purposes and are unable to save for retirement or bequest.
Keeping all these studies in view, I understand that all people are behaving
rationally while keeping other thins the same. Every individual wants to save, for
different life purposes, all this depends upon occupation, income, education, region,
capability, willingness, etc. In the case of poor people, almost all these things are
missing to save on. Therefore, the nature of savings among the poor is quite
different. Now the question arises on how to boost savings among the poor? To
support the poor so that they could be able to save for the future and they can live a
better life, we need to look at them from several perspectives like basic amenities of
life, education, education, housing facility, occupation, earnings/income etc.so it
demands a spectrum of services with proper rehabilitation as well as adaptation.
Individual savings are directly determined by age (Modigliani & Ando, 1957).
Permeant income theory suggests savings are done because of permeant income at
disposal. In developing countries savings are dependent income, Higher the income
higher will be the savings and vice versa. Studies have shown people in developing
countries are working in informal sectors like Indian, other south Asian countries,
and Sub-Sahara Africana countries. They are lacking formal institutional support to
save. Savings are also determined by psychological factors. Behavioural economists
also stress on individual approach, optimistic and pessimistic behaviour, etc.

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Chapter 3
Impact of Recent Financial Inclusion
Schemes on Status of Financial Inclusion
in India: Secondary Data Analysis

3.1 Introduction

In India financial inclusion concept was first time used in 2005 by then governor of
reserve bank of India (Venugopal Reddy, 2005). After that, the term financial
inclusion has been widely used in India. Financial inclusion is simply the distribu-
tion of the financial system of an economy to its followers. According to Leeladhar
(2006), financial inclusion is nothing but a bank service and is used interchangeably
with banking inclusion. Banking policies were reformed to align vast sections of the
population who were out of banking to include them in financial inclusion (Sarma,
2008). In 2005 (Khan Committee) presented a report on Rural credit and
Microfinance. A deeper concern was shown on the exclusion of a larger population
from the formal banking system [4]. After Khan Committee Report, the RBI urged
banks to provide the facility of a basic “No-Frills” bank account (2005–2006)
(Reddy, 2005). The financial inclusion committee has defined financial inclusion,
assurance of access to financial services, and time-based adequate credit whenever
needed by weaker sections and other low-income groups at a very economic cost
(Rangarajan Committee, 2008). In India Financial inclusion is backed by banks
largely. For example, the UK’s financial inclusion is based on three major dimen-
sions which are access to banking. Access to credit and money advice by a face is
also very important in India too. The process of financial inclusion is mostly
involved in granting credit to agriculture and low-income groups for different
purposes. Financial inclusion is the name of a various bunch of financial services,
that is why it is also called by the name of a multidimensional phenomenon.
Academician, scholars and social scientists have discussed financial development
is closely related to economic growth but the question arises whether the develop-
ment of financial sector leads to the development of financial inclusion or not? It has
been found that well developed financial systems are still behind the success of
inclusiveness due to which many destitute sections are outside the mainstreaming.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 37
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_3
38 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

During recent years financial inclusion has been recognized as a priority in India, and
has been widely accepted in the policy circles. Finance is having much importance in
the economy as blood in the human body. So, access to finance can play the doorway
towards financial inclusion. Inclusive finance will help in reducing all the bottle-
necks and exploitations in the financial system, which are high-interest rates by
money lenders and other risks of the informal economy. Thus, development in every
field is a necessary condition to compete in modern life. Life these days also demand
things on sustainable basis with security and peace. If we consider the increasing and
changing trend of financial services, one side we demand facilities and on the other
side security too, Moreover, people living in different demographic structures, where
people are old, illiterate, rural-urban divide and so on, again needs attention how to
cover all of the in the inclusive system and what type of facility for which group to
provide? it needs more research to be done, how to compete with modernity and
needs of banking facilities? So, that all the population could be included in the
financial inclusion.
Concept of financial inclusion index needs attention on how to measure the
accessibility of financial services and which indicators to include in it. Again, the
methodological question arises whether the financial inclusion index is a complete
tool to measure financial efficiency or not? Policymakers should also consider how
to eradicate all the barriers to achieve the complete inclusion of the people. Research
and Development have achieved a remarkable contribution in providing a huge
amount of literature on financial inclusion, exclusion, and associated areas, etc.
Kempson et al. (2004) has mentioned six reasons for exclusion, but these barriers
may differ from country to country due to development and underdevelopment and
demographical reasons, etc. Problems of exclusion, are rules and regulation of bank
accounts, bank charges, psychological and behavioural inferences, Easy access to
banking services. Charkravarty and Pal (2010) has classified some of the barriers
which are, supply-side problems from banks, Demand-side barriers from destitute
groups. Financial inclusion will improve only when these problems will be
addressed in a concerted way. So, addressing Financial exclusion on the grounds
of supply and demand-oriented barriers could help policymakers to frame policies
accordingly. In this chapter, we have tried to figure out the performance of financial
inclusion since its inception 2006–2020. We will first check the financial inclusion
performance from 2006 to 2013 and 2014 to 2020 because most of the programs
have been implemented after 2014 by providing targeted schemes to cover the
unbaked population like PMJDY (https://pmjdy.gov.in/), MUDRA (http://www.
mudra.org.in/), PMSBY (http://pmjandhanyojana.co.in/suraksha-bima-yojana/),
PMJJBY (http://www.dif.mp.gov.in/pmjjy.htm), APY (https://www.npscra.nsdl.
co.in/scheme-details.php) and others, etc. Approaches towards financial inclusion
are running at a good pace from 2014 onwards with new products and schemes.
From access services, saving services, insurance services, credit services, and so on,
with innovative concepts of digitization, online banking, and many other services.
The motive of these schemes is only financial inclusion specially to include all the
poor who are outside the banking system of the country.
3.2 Recent Financial Inclusion Schemes and Their Performances from. . . 39

In this chapter we will try to analysis whether financial inclusion has achieved any
successes or not? This chapter has been divided in to four parts. Section 3.1
Introduction, Sect. 3.2 Recent Financial Inclusion Schemes and Their Performances
from Secondary Data Analysis. The section two investigates development of finan-
cial inclusion index. In section third, shows the financial inclusion position of the
country from 2014 to 2016. As per the well-developed Financial inclusion index
with availability of data source from the world bank of 214 countries (https://
databank.worldbank.org/source/global-financialinclusion). In section third, we have
presented the overall performance of financial inclusion in India from recent years.
Financial inclusion index and dummy regression model has been used for analysis.

3.2 Recent Financial Inclusion Schemes and Their

Performances from Secondary Data Analysis

3.2.1 Pradhan Mantri Jan-Dhan Yojana (PMJDY)

“Pradhan Mantri Jan-Dhan Yojana (PMJDY)” under the National Mission for
Financial Inclusion was launched initially for a period of 4 years (in two phases)
on 28th August 2014. It envisages universal access to banking facilities with at least
one basic banking account for every household, financial literacy, access to credit,
insurance and pension.
PMJDY has provided a platform for the three social security schemes viz.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha
Bima Yojana (PMSBY), Atal Pension Yojana (APY) and Pradhan Mantri Mudra
Yojana (PMMY).
The Government has decided to extend the comprehensive PMJDY program
beyond 28.8.2018 with the change in focus on opening accounts from “every
household” to “every adult”, with following modification:
(i) Existing Over Draft (OD) limit of Rs. 5000 revised to Rs. 10,000.
(ii) No conditions attached for active PMJDY accounts availing OD up to
Rs. 2000.
(iii) Age limit for availing OD facility revised from 18–60 years to 18–65 years.
(iv) The accidental insurance cover for new RuPay card holders raised from
existing Rs. lakh to Rs. 2 lakhs to new PMJDY accounts opened after
28.8.2018.
PMJDY is National Mission for Financial Inclusion to ensure access to financial
services, namely, a basic savings & deposit accounts, remittance, credit, insurance,
pension in an affordable manner. Under the scheme, a basic savings bank deposit
(BSBD) account can be opened in any bank branch or Business Correspondent
(Bank Mitra) outlet, by persons not having any other account.
40 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

Table 3.1 Pradhan Mantri Jan-DhanYojana (PMJDY) 28th August 2014

2015– 2016– 2017– 2018– 2019–
Financial year 2016 2017 2018 2019 2020
No. of PMJDY accounts (in crore) 14.72 21.43 28.17 31.44 35.27
Deposit in PMJDY accounts (in Rs. crore) 15,670 35,672 62,972 78,494 96,107
Average deposit per PMJDY account (in Rs.) 1065 1665 2235 1,2497 2725
Number of Rupay debit cards issued to PMJDY 13.14 17.75 21.99 23.65 27.91
account-holders (in crore)
Source: Government of India

Table 3.1 shows performance of PMJDY from 2015–16 to 2019–2020. Number

of PMJDY accounts in crores have been increased from 14.72 cores in 2015–16 to
35.27 crore in 2019–20.Deposit in PMJDY accounts in crores from 15,670 in
2015–16 to 96,107 crores in 2019–20.The average deposit per PMJDY accounts
are 1065 rupees in 2015–16 to 2725 rupees in 2019–20.The number of Rupay card
debit cards issued to PMJDY account holders are 13.14 crore in 2015–16 to 27.91
crore in 2019–20.

3.2.2 Pradhan Mantri Mudra Yojana

An important aspect of financial inclusion is enabling the ow of credit to small

businesses. In pursuance of the announcement in the Union Budget 2015–16, the
Micro Units Development finance Agency (MUDRA) was set-up and the Pradhan
Mantri Mudra Yojana (PMMY) launched on 8th April, 2015. For achieving
sustained expansion in the ow of credit to the non-corporate small business sector,
loans up to Rs. 10 lakh without collateral are extended to borrowers under PMMY.
These loans are extended through partner Member Lending Institutions (MLIs) –
such as Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs)
and Micro-Finance Institutions (MFIs). In turn, MUDRA Ltd. offers refinance to
MLIs for PMMY loans extended by them.
The loans under PMMY are categorized as Shishu (up to Rs. 50,000), Kishore
(Rs.50,000 to Rs. 5 lakh) and Tarun (Rs.5 lakh to Rs.10 lakh). Activities allied to
agriculture and services supporting these (excluding crop loans, land improvement
such as canals, irrigation, wells) have also been included under PMMY from April,
2016 onwards.

3.2.3 Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The Scheme is available to people in the age group 18–70 years with a bank / Post
office account who give their consent to join / enable auto-debit on or before 31st
May for the coverage period first June to 31st May on an annual renewal basis.
3.2 Recent Financial Inclusion Schemes and Their Performances from. . . 41

Table 3.2 Micro Units Development Finance Agency (MUDRA) 8th April, 2015
Financial
year 2015–2016 2016–2017 2017–2018 2018–2019 2019–2020 2020–2021
No. of 34,880,924 39,701,047 48,130,593 59,870,318 62,237,981 15,187,176*
PMMY
loans sanc-
tioned
crores
Amount 137,449.27 180,528.54 253,677.1 321,722.79 337,465.13 96,869.06*
sanctioned
Amount 132,954.73 175,312.13 246,437.4 311,811.38 329,684.63 89,934.72
disbursed
Source: Government of India
*Provisional Data

Aadhar would be the primary KYC for the bank account. The risk coverage under
the scheme is Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for
partial disability. The premium of Rs. 12 per annum is to be deducted from the
account holder’s bank / Post office account through ‘auto-debit’ facility in one
instalment. The scheme is being offered by Public Sector General Insurance Com-
panies or any other General Insurance Company who are offering the product on
similar terms with necessary approvals and tie up with Banks and Post Offices for
this purpose. As on 31st March 2019, the gross enrolment by banks, subject to
verification of eligibility criteria, is about 15.47 crore under PMSBY and 32,176
claims of Rs. 643.52 Crore have been disbursed.
Table 3.2 shows Micro Units Development finance Agency performance. In
2015–16 the number of PMMY loans Sanctioned in crores 34,880,924 and reached
15,187,176 crores respectively. Second the amount sanctioned in 2015–16 is
137,449.27 crores and reached 96,869.06 in 2020–21. Finally, the total amount
disbursed in 2015–16 is 132,954.73 crores and reached 89,934.72 crores in
2020–21.

3.2.4 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The scheme is available to people in the age group of 18–50 years having a bank/
Post office account who give their consent to join/enable auto-debit. Aadhar would
be the primary KYC for the bank account. The life cover of Rs. 2 lakh is available for
a one-year period stretching from 1st June to 31st May and is renewable. Risk
coverage under this scheme is for Rs. 2 Lakh in case of death of the insured, due to
any reason. The premium is Rs. 330 per annum which is to be auto-debited in one
instalment from the subscriber’s bank/Post office account as per the option given by
him on or before 31st May of each annual coverage period under the scheme. The
scheme is being offered by Life Insurance Corporation and all other life insurers who
are offering the product on similar terms with necessary approvals and tie up with
Banks and Post Offices for this purpose.
42 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

To facilitate all those getting enrolled under PMJJBY for the first time during the
middle of the policy period, payment of pro-rata premium has been allowed at a
considerable low premium. Thus, if the enrolment takes place during the months of:
1. June, July & August –Annual premium of Rs. 330/- is payable.
2. September, October & November
3 quarters of premium @ Rs.86.00 i.e. Rs.
258/- is payable.
3. December, January & February – 2 quarters of premium @ Rs.86.00 i.e. Rs. 172/-
is payable.
4. March, April & May – 1 Qly premium @ Rs.86.00 is payable.
As on 31st March 2019, the gross enrolment by banks, subject to verification of
eligibility criteria, is about 5.91 crore people under PMJJBY and 135,212 claims of
Rs. 2704.24 Crore have been disbursed.
Table 3.3 shows the performance of Pradhan Mantri Jeevan Jyoti Yojana. In
2015–16 the premium received in crore are 885 and in 2017–18 it is 769 crores. The
number of enrolments’ in 2015–16 are 2.96 crores and 2017–18 it has reached to
2.23. The number of claims received from 2015–16 are 22,212 crores and reached
35,997 crores in 2017–18.

3.2.5 Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The Scheme is available to people in the age group 18–70 years with a bank/Post
office account who give their consent to join/enable auto-debit on or before 31st May
for the coverage period 1st June to 31st May on an annual renewal basis. Aadhar
would be the primary KYC for the bank account. The risk coverage under the
scheme is Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for partial
disability. The premium of Rs. 12 per annum is to be deducted from the account
holder’s bank/Post office account through ‘auto-debit’ facility in one instalment. The
scheme is being offered by Public Sector General Insurance Companies or any other
General Insurance Company who are offering the product on similar terms with
necessary approvals and tie up with Banks and Post Offices for this purpose.
As on 31st March 2019, the gross enrolment by banks, subject to verification of
eligibility criteria, is about 15.47 crore under PMSBY and 32,176 claims of
Rs. 643.52 Crore have been disbursed.
Table 3.4 shows Pradhan Mantri Suraksha Bima Yojana performance. In
2015–16 the Premium Received are 106 crores reached 129 crores in 2018–19.
The number of enrolments in crores in 2015–16 are 9.41 reached to 1.99 in 2018–19.
The number of claims received in 2015–16 are 4566 crores reached to 19,612 crores
in 2018–19. The number of claims disbursed from 2015–16 are 2757 crores reached
the mark of 15,746 crores respectively.
3.2 Recent Financial Inclusion Schemes and Their Performances from. . . 43

Table 3.3 Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) 9th May, 2015
Financial year 2015–2016 2016–2017 2017–2018
Premium received in crore 885 824 769
No. of enrolments (in crore) 2.96 0.15 2.23
No. of claim received 22,212 39,954 35,997
Source: Government of India

Table 3.4 Pradhan Mantri Suraksha Bima Yojana (PMSBY) 9th May, 2015
2015– 2016– 2017– 2018– 2019–
Financial year 2016 2017 2018 2019 2020**
Premium received in crore 106 107 106 129 125
No. of enrolments 9.41 0.54 3.53 1.99 –
(in crore)
No. of claim received 4566 7968 8603 19,612 –
No. of claims disbursed 2757 6646 7027 15,746 –
Source: Government of India

3.2.6 Atal Pension Yojana (APY)

APY is being implemented with effect from 1st June, 2015. The Scheme aims to
provide monthly pension to eligible subscribers not covered under any organized
pension scheme. APY is open to all bank and post office account holders in the age
group of 18–40 years. Under APY, any subscriber can opt a guaranteed pension of
Rs 1000 to Rs 5000 (in multiples of Rs. 1000) receivable at the age of 60 years. The
contributions to be made vary based on pension amount chosen. The key features of
APY are as under:
1. The APY is primarily focused on all citizens in the unorganised sector, who join
the NPS. However, all citizens of the country in the eligible category may join the
scheme.
2. Any Indian Citizen between 18 and 40 years of age can join through their savings
bank account or post office savings bank account.
3. Minimum pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 is
guaranteed by the Government of India to the subscriber at the age of 60 years,
with a minimum monthly contribution (for those joining at age 18) of Rs. 42 or
Rs. 84 or Rs. 126 or Rs. 168 and Rs. 210, respectively.
4. After the subscriber’s demise, the spouse of the subscriber shall be entitled to
receive the same pension amount as that of the subscriber until the death of the
spouse.
5. After the demise of both the subscriber and the spouse, the nominee of the
subscriber shall be entitled to receive the pension wealth, as accumulated till
age 60 of the subscriber.
44 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

6. The subscribers in the eligible age, who are not income-tax payers and who are
not covered under any statutory social security scheme, are entitled to receive the
co-contribution by Central Government of 50% of the total prescribed contribu-
tion, up to Rs. 1000 per annum, and this will be available for those eligible
subscribers, who join APY before 31st March, 2016. The Central Government
co-contribution shall be available for a period of 5 years, i.e., from Financial Year
2015–16 to 2019–20.
7. If the actual returns during the accumulation phase are higher than the assumed
returns for minimum guaranteed pension, such excess will be passed on to the
subscriber.
8. The contributions can be made at monthly / quarterly / half yearly intervals
through auto debit facility from savings bank account/ post office savings bank
account of the subscriber. The monthly / quarterly / half yearly contribution
depends upon the intended / desired monthly pension and the age of subscriber
at entry.
Major steps have been initiated by the Government to popularize create awareness
about APY:
9. Simplification of default penal charges
10. The mode of payment has been changed from monthly to monthly, quarterly and
half yearly keeping in consideration the seasonal income earners.
11. Removal of closure of account clause after 24 months and continuation of the
account till the time corpus is available in the account.
12. Periodic advertisements in print and electronic media.
13. Capacity building of bank branch officials through various training programs.
14. Participating in town hall meetings, SLBC meetings.
15. Conducting meetings with State Governments of Telangana, Kerala, Gujarat,
Maharashtra, and Orissa.
16. Meeting with Secretaries of Union Ministries of Agriculture, Rural Develop-
ment, WCD, Panchayati Raj, Health etc. with a view to get their unorganized
workforce like MNREGA workers, SHG, Asha workers, Aganwadi workers etc.
under APY.
As on 31st March 2019, the number of subscribers is 149.53 lakh with Asset under
Management (AUM) of Rs. 6860.30 crore.
Table 3.5 shows Atal Pension Yojana performance. In 2016 the number of
subscribers is 24.85 crores reached to 228.61 crores in 2020. The contribution of
491 crores in 2016 has reached to 11,226 crores in 2020. The assets under manage-
ment 506 crores in 2016 are reached to 12,696 crores in 2020.
3.4 Calculation of Financial Inclusion Index (FII): Comparison of Past Attempts 45

Table 3.5 Atal Pension Yojana (APY) 1st June, 2015

Financial year 2016 2017 2018 2019 2020 2020*
Number of subscribers 24.85 48.64 96.06 149.53 211.42 228.61
Contribution (Rs. in crore) 491 1751 3602 6335 9747 11,226
Assets under management 506 1885 3818 6860 10,526 12,696
(Rs. in crore)
Source: Government of India

3.3 Development of Financial Inclusion Index

Patrick Honohan (2007) estimated financial inclusion, accessing household on the

following grounds such as access towards formal financial institutions, use of the
Gini coefficient, use of microfinance and bank accounts for the total population,
average deposit size per-capita GDP. This was also, the first insight to check
financial inclusion. Mandira Sarma (2008) has added three more dimensions to
measure the financial inclusion index, Depth (penetration) that is the number of
bank accounts per 1000 population, Access, Number of bank branches, and ATMs
per 1000 population. Usage, (number of customers). She adopted HDI calculations
and also UNDP (HDI) informing Index financial inclusion (IFI). Similarly, IFI has
been calculated at the state levels (Chandan Kumar and Srijit Mishra 2011; Kumar
2011) relationship between financial inclusion and development has been examined
by several socio-economic variables like, income, inequality, literacy, urbanization,
and infrastructure (Sarma and Pais, 2008). Mehrotra et al. (2009) has also measured
the financial inclusion index for similar variables like a number of rural offices, a
number of rural deposit accounts, a volume of rural deposit, and credit from banks at
the district level. Charkravarty and Pal (2010) have used the axiomatic approach for
financial inclusion. It is an improvement upon Sarma (2008) IFI, so many factors
could be presented on a percentage basis. Similarly, R.U. Arora (2010) has included
more variables to IFI, that of geographical penetration and ease, cost of transactions.
But we have accepted Samra’s paper as a base paper for our analysis.

3.4 Calculation of Financial Inclusion Index (FII):

Comparison of Past Attempts

Researchers have used different methods to compute the Index of Financial Inclu-
sion. Sarma (2008) in her study indicates that the dimensions included by her
(detailed in Sect. 3.1 above) are dictated by the availability of consistent data sets.
Thus, her study looks at only ‘penetration (2 variables)’, ‘availability’ and ‘usage’
(1 variable) for data pertaining to 2004. After giving equal weights to the dimen-
sions, the index of financial inclusion (IFI) is computed as follows:
46 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
ð 1
pi Þ 2 þ ð 1
ai Þ 2 þ ð 1
ui Þ 2
IFI ¼ 1
ð3:1Þ
3

where
• pi ¼ the dimension indices for penetration (or accessibility),
• ai ¼ availability and
• ui ¼ usage respectively (Sarma, 2008).
The IFI thus constructed incorporates information on these dimensions in one single
number lying between 0 and 1, where 0 denotes complete financial exclusion and
1 indicates the ideal – complete financial inclusion in an economy (Sarma and Pais,
2008). Arora (2010) added the dimensions of Outreach (2 variables), Ease of Trans-
actions (12 indicators) and Cost (6 indicators) and computed the Financial Access
Index (FAI) for data pertaining to 2007. She calculated the FAI as follows
(Table 3.6):

Table 3.6 The values of these dimension from 2005 to 2016, are given below in Tables 1
respectively
Geographic ATM
Penetration per
100,000 adults
(2)
Demographic
Geographic number of bank Branch Penetration per
accounts per 1000 adults 100,000 adults Volume of Deposits
(1) (3) (4) + loans (5) as % of GDP
Year (1) (2 + 3) (4) + (5)
2006 0.081377816 0.021888439 0.040688908
2007 0.088680273 0.022192378 0.044340136
2008 0.098545269 0.024342276 0.049272634
2009 0.110353263 0.026849313 0.055176631
2010 0.120275723 0.030231755 0.060137862
2011 0.129374271 0.0343981 0.064687136
2012 0.139643476 0.039300258 0.069821738
2013 0.157953574 0.043563933 0.078976787
2014 0.182580438 0.05586168 0.091290219
2015 0.211700592 0.062496698 0.105850296
2016 0.238424975 0.052925148 0.300819602
2017 0.788481149 0.066724778 0.028977969
2018 0.077797446 0.104295816 0.929508197
2019 0.220981031 0.17348019 2.725491803
Source: World Bank and RBI
3.5 The Financial Inclusion Index 47

Each dimension DiI is defined as,

ðdi1 þ di2 þ di3 . . . :dnÞ

Dil ¼ ð3:2Þ
n

and

ððAi
miÞ
di ¼ ð3:3Þ
ðMi
miÞ

Where
Ai ¼ Actual value of dimension i;
mi ¼ minimum value of dimension i;
Mi ¼ maximum value of dimension i.
The Usage Dimension
D2 is the Dimension index for Usage and includes the Volume of Deposits and loans
as a percentage of GDP.

3.5 The Financial Inclusion Index

Using the values of all the Three Dimension indices derived above, we compute the
Financial Inclusion Index for India 2005–2016

FII ¼ ð1
d1, 1
d2, 1
d3Þ ð3:4Þ

1
d1 1
d2 1
d3
2006 0.918622184 0.978111561 0.959311092
2007 0.911319727 0.977807622 0.955659864
2008 0.901454731 0.975657724 0.950727366
2009 0.889646737 0.973150687 0.944823369
2010 0.879724277 0.969768245 0.939862138
2011 0.870625729 0.9656019 0.935312864
2012 0.860356524 0.960699742 0.930178262
2013 0.842046426 0.956436067 0.921023213
2014 0.817419562 0.94413832 0.908709781
2015 0.788299408 0.937503302 0.894149704
2016 0.238424975 0.052925148 0.300819602
2017 0.788481149 0.066724778 0.084508197
2018 0.077797446 0.104295816 0.929508197
2019 0.220981031 0.17348019 2.725491803

Similarly, we have subtracted (1
d1)2, (1
d2)2 and (1
d3)2 to all the three
dimensions.
 ADD
48

pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
(1
d1)2 (1
d2)2 (1
d3)2 (1
d1)2(1
d2)2 + (1
d3)2 ADD/3 ADD=3 1
ADD=3
2006 0.843867 0.956702 0.920278 2.720847 0.906949 0.952339 0.047661
2007 0.830504 0.956108 0.913286 2.699897 0.899966 0.948665 0.051335
2008 0.812621 0.951908 0.903883 2.668411 0.88947 0.943117 0.056883
2009 0.791471 0.947022 0.892691 2.631185 0.877062 0.936516 0.063484
2010 0.773915 0.94045 0.883341 2.597706 0.865902 0.930539 0.069461
2011 0.757989 0.932387 0.87481 2.565186 0.855062 0.924696 0.075304
2012 0.740213 0.922944 0.865232 2.528389 0.842796 0.918039 0.081961
2013 0.709042 0.91477 0.848284 2.472096 0.824032 0.907762 0.092238
2014 0.668175 0.891397 0.825753 2.385325 0.795108 0.891689 0.108311
2015 0.621416 0.878912 0.799504 2.299832 0.766611 0.875563 0.124437
2016 0.579997 0.896951 0.488853 1.965801 0.655267 0.809486 0.190514
2017 0.04474 0.871003 0.838125 1.753868 0.584623 0.764606 0.235394
2018 0.850458 0.802286 0.004969 1.657713 0.552571 0.743351 0.256649
2019 0.606871 0.683135 2.977322 4.267328 1.422443 1.192662 0.19266
3 Impact of Recent Financial Inclusion Schemes on Status of. . .
3.6 Impact Assessment of Recent Financial Inclusion Schemes on. . . 49

By incorporating more variables to evaluate each Dimension, the FII in this study
is more robust. The additional variables in our model, like geographic Branch and
ATM penetration, play a significant role. Besides, adding ‘ease’ and ‘cost of trans-
actions’ helps to view the financial inclusion more holistically as compared to earlier
studies. The scaling of financial inclusion is as follows. So, it shows India’s financial
inclusion has achieved medium financial inclusion performance is touching
1. 0  FII  0.4; indicates low financial inclusion, LFI;
2. 0.4 < FII  0.6; indicates medium financial inclusion, MFI
3. 0.6 < FII  1; indicates high financial inclusion, HFI

3.6 Impact Assessment of Recent Financial Inclusion

Schemes on Financial Inclusion Index

This section highlights, Is there any significant change in financial inclusion after
2014 via various financial inclusion schemes like PMJDY, MUDRA, PMSBY,
PMJJBY, and APY. To check the impact of these schemes we have used Dummy
model. The dependent variable used in the model is the Index of financial inclusion
which has been calculated (from 2006 to 2019) from world bank data sources), and
the independent variable is the year.

3.6.1 Regression Model

The descriptive statistics of the model is from 2006 to 2013 the number of years are
eight represented by dummy variable as zero and the number of years after
2014–2019 are 6 years represented by one in dummy.
The Mathematical equation of the model is as follows

Index of Financial inclusion ¼ f ðyear Þ ð3:5Þ

IFI ¼ β0 þ β1 Di þ Ui ð3:6Þ

Where
• IFI ¼ Financial Inclusion Index
• β0 ¼ slope
• β1Di ¼ Year {0 ¼ before 2014 i.e. (2006–2013), 1 ¼ after 2014–2019} and
• Ui ¼ error term
50 3 Impact of Recent Financial Inclusion Schemes on Status of. . .

(1)
Variables FII
Dummy 0.117***
(0.0215)
Constant 0.0673***
(0.0141)
Observations 14
R-squared 0.713
Standard errors in parentheses
***p < 0.01, **p < 0.05,
*p < 0.1

The output results of the regression model show that the financial inclusion index
has shown 0.117 units of improvement after 2014, due to the implementation of
recent financial inclusion schemes by the government which is PMJDY, MUDRA,
PMSBY, PMJBY, and APY. Now the question arises is it really possible to have
such a big improvement in FII due to all these schemes? Will be further discussed
and investigated by analysing primary data sources.

3.7 Conclusion

The Financial inclusion index represents here mainly three broad variables
i.e. accessibility, availability and usage. This study has analysed financial inclusion
from 2006 to 2020. The main parameters are number of bank accounts per 1000
adults, Number of ATM’s and bank branches per 100,000 adults, Volume of
deposits plus loans percentage of GDP. Number of bank accounts from 2006 to
2020 has improved a lot and almost every house hold has a bank account. But the
other two variables availability and usage didn’t improve too much as per the
demand. We have used financial inclusion index to measure financial inclusion of
India. The estimated results lie between 0 and 1, where 0 represents complete
financial exclusion and 1 represents complete inclusion. Further the scale has been
divided in to three broad categories which are. 1. 0  FII  0.4; indicates low
financial inclusion, LFI; 2. 0.4 < FII  0.6; indicates medium financial inclusion,
MFI and 3. 0.6 < FII  1; indicates high financial inclusion, HFI. As per the scale of
financial inclusion we find India captures the place of medium financial inclusion
position. We also investigated impact of recent financial inclusion schemes on
financial inclusion index with the help of the Dummy regression models. The results
of the model show positive change in financial inclusion index after 2014.
References 51

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Chapter 4
Socio-Economic Conditions and Pattern
of Access and Non-Access in Recent
Financial Inclusion Schemes of the Poorest
of Poor

4.1 Introduction

Finance matters for economic wellbeing and development of an individual. Finance

can support individuals smooth their income, protect against risks and increase
investment opportunities. Finance can be mainly important for the poor. Recent
evidence is witness that a more developed financial system can decrease poverty and
income inequality (Claessens, 2006). Financial services have received increased
attention in India to decline the problem of financial Exclusion.
The lack of financial access by the common people of the population in devel-
oping countries is a noteworthy concern. Because it may not be possible to observe
the obscured demand for financial products, and supply-side constraints among
them. So, we need to explore both demand and supply based products to understand
their needs (Beck & Demirguc-Kunt, 2008).
Till date financial access has been focused on the supply side. There is plenty of
evidence of what supply-side conditions are based. They mainly focus on market
conditions, product design, and regulations to offer financial access (Beck et al.,
2009; Claessens, 2006). The unspoken statement of existing actual demand for
financial services has recently been questioned (Anand & Rosenberg, 2008). Now
recently, financial inclusion studies have started to devote attention to the demand-
side factors (Bauer et al., 2012; Cole et al., 2011). Literature showed financial access
is determined by social and psychological factors, which govern economic factors in
totality, like capital affects men and women differently (Fafchamps et al., 2011).
Financial literacy is one of the fundamental factors which determines financial
access, which defined by Age, Education, Gender, and ability of the person (Lusardi
& Mitchell, 2013). Financial literacy is also affected by social interaction and social
networks (Bönte & Filipiak, 2012). Awareness about different products precludes
their choice (Bönte & Filipiak, 2012). Economic variables are the determinants of
financial access like self-employment, income, gender, age, etc. (Bauer & Chytilová,
2009). From the above literature, we find that financial access depends on to socio

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 53
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_4
54 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

economic variables, financial awareness of people, and nature of financial services

and financial products.
This chapter has been divided broadly in to four sections. Section 4.2 explains the
socio-economic conditions of Beggars from Lucknow and Kolkata. Section 4.3
consists of Socio-economic conditions of slums from Lucknow and Kolkata. Access
and Non-access pattern of financial products and services of Slums is explained in
Sect. 4.4. Access and Non-access pattern of financial products and services of
Beggars is explained in Sect. 4.5. Analysis of access and non-access with reference
to socio -economic factors is explained in Sect. 4.6. In Sect. 4.7, determining Factors
of Financial Access among Slum Dwellers and Beggars is explained with help of
Hypothesis testing and Binary Logistic Regression Model. Section 4.8 presents the
Findings and Conclusion.

4.2 State Wise Socio-Economic Conditions of Slums

and Beggars from Lucknow and Kolkata

Table 4.1 shows the percentage-wise distribution of beggars in Lucknow and

Kolkata. From our collected Data of 50 samples of beggars in Lucknow and Kolkata.
The male percentages of beggars from Lucknow are 90 percent and 56 percent are
from Kolkata. The female percentages are 10 percent from Lucknow and 44 percent
are from Kolkata. In absolute terms we find that more male participants are engaged
in begging from Lucknow, and in case of females more of the female participants are
from Kolkata (Fig. 4.1).
Table 4.2. The social status of beggars in Lucknow and Kolkata is as follows. The
caste base distribution of general category 24 percent belongs to Lucknow and
8 percent from Kolkata. From the SC category 58 percent are from Lucknow and
44 percent are from Kolkata. Similarly, the participatory distribution from ST
category no one from Lucknow and 8 percent are from Kolkata.
Lastly, the OBC category represents 18 percent from Lucknow and 40 percent
from Kolkata respectively. In totality the maximum participation of begging is from
SC category in both cities. The second highest category participation in Begging
from Lucknow is general category and OBC from Kolkata. The overall distribution
of table shows that the Lucknow beggars are distributed almost equally with low
difference of participation from all the categories except ST. In case of Kolkata there
is a huge gap of participation between categories like ST and General, huge number
of participants are from SC and OBC populations (Fig. 4.2).

Table 4.1 Gender wise per- Name of gender Male Female Total
centage distribution of beg-
Lucknow 45 5 50
gars in Lucknow and Kolkata
90% 10% 100%
Kolkata 28 22 50
56% 44% 100%
4.2 State Wise Socio-Economic Conditions of Slums and Beggars from Lucknow. . . 55

Gender wise Distribution of Beggars

150%
56%

100%

90%
50% 44%
10%
0%
Male Female

Lucknow Kolkata

Fig. 4.1 Gender wise percentage distribution of beggars in Lucknow and Kolkata

Table 4.2 State wise caste of Name of Caste Lucknow Kolkata

beggars in Lucknow and
General 12 4
Kolkata
24% 8%
SC 29 22
58% 44%
ST 0 4
0% 8%
OBC 9 20
18% 40%
Total 50 50
100% 100%

CASTE OF BEGGARS
Lucknow Kolkata
58%

44%

40%
24%

18%
8%

8%
0%

GENERAL SC ST OBC

Fig. 4.2 State wise caste of beggars in Lucknow and Kolkata

56 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.3 Educational pro- Education Lucknow Kolkata

file of beggars in Lucknow
Illiterate 29 48
and Kolkata
58% 96%
Primary up to V 16 2
32% 4%
Upper Primary up to (VI–VIII) 5 0
10% 0%
Total 50 50
100% 100%

Educaononal Status of Beggars

120%
96%
100%

80%
58%
60%

40% 32%

20% 10%
4% 0%
0%
Lucknow Kolkata

Illiterate Primary up to V Upper Primary up to (VI-VIII)

Fig. 4.3 Distribution of education among beggars in Lucknow and Kolkata

Table 4.4 Annual income of Income Lucknow Kolkata

beggars in Lucknow and
10,000–20,000 46 22
Kolkata
92% 44%
21,000–40,000 0 7
0% 14%
41,000–60,000 0 20
0% 40%
100,001 above 4 1
8% 2%
Total 50 50
100% 100%

Table 4.3 shows level of education, the maximum people who are begging are
illiterate in both cities in Lucknow 58 percent and in Kolkata 96 percent. Beggars
who have achieved primary up to fifth are 32 percent from Lucknow and 4 percent
from Kolkata. Lastly, 10 percent of people from Lucknow have achieved Upper
Primary up to (VI–VIII) levels of Education. So, from this table, we find beggars are
more illiterate in Kolkata (Fig. 4.3).
Table 4.4 shows the annual income of beggars. The level of income is as follows
from (10,000–20,000) in Lucknow 92 percent and 44 percent in Kolkata. The second
4.2 State Wise Socio-Economic Conditions of Slums and Beggars from Lucknow. . . 57

Annual Income of Beggars

1
100001 above
8

40
41000-60000
4

14
21000-40000
0

44%
10000-20000
92%

0% 500% 1000% 1500% 2000% 2500% 3000% 3500% 4000% 4500%

Kolkata Lucknow

Fig. 4.4 Percentage wise annual income of Beggars in Lucknow and Kolkata

Table 4.5 Type of beggars in Income Lucknow Kolkata

Lucknow and Kolkata
Full time beggars 50 20
100% 40%
Irregular beggars 0 30
0% 60%
Total 50 50
100% 100%

category of income is (21,000–40,000) rupees only 14 percent of beggars from

Kolkata belong to this level. The third category of income (41,000–60,000) Rupees
covers 40 percent of beggars from Kolkata and no one from Lucknow. The last
category of annual income (100,001 and above) rupees covers 8 percent from
Lucknow and 2 percent from Kolkata. Income status of beggars from Kolkata is
better than beggars from Lucknow. So, from this table we found that the income
inequality is larger among beggars in Lucknow in comparison to Kolkata. This
difference may be due higher number of working days and hours of beggars of
Kolkata in comparison to beggars of Lucknow (Fig. 4.4).
Table 4.5 shows Type of Beggars, in Lucknow 100 percent of beggars are getting
begging daily while in Kolkata only 40 percent of the beggars are earning begging
daily bases (Fig. 4.5).
Table 4.6 shows the number of working days attended by beggars from Lucknow
and Kolkata. 62 percent Beggars are attending (11–20 working days) in a month
from Lucknow and 24 percent in Kolkata. Beggars who are working (21–30 working
days) are 38 percent from Lucknow and 76 percent from Kolkata. So, from this table,
we came to know that Kolkata beggars are working almost full month while
Lucknow beggars are maximum working only 20 days a month. Which again
shows Kolkata beggars are rich than Lucknow beggars because of a greater number
of working days per month (Fig. 4.6).
58 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Frequency of Income
120%
100%
100%

80%
60%
60%
40%
40%

20%
0%
0%
Lucknow Kolkata

Daily Irregular

Fig. 4.5 Frequency of income among beggars in Lucknow and Kolkata

Table 4.6 Distribution of Number of working days Lucknow Kolkata

number of working days in a
11–20 days 31 12
month from beggars
62% 24%
21–30 days 19 38
38% 76%
Total 50 50
100% 100%

Number of Working Days Attended by Beggars

80% 76%

62%
60%

38%
40%
24%
20%

0%
Lucknow Kolkata

1-20 days 21-30 days

Fig. 4.6 Distribution of number of working days in a month from beggars

Table 4.7 shows the number of working hours attended by beggars in Lucknow
and Kolkata. Beggars who are attending (1–5 hours) daily are 16 percent from
Lucknow and 6 percent from Kolkata. Those who are working for (6–10 hours)
are 84 percent from Lucknow and 88 percent from Kolkata. Beggars who are
working more than (11–15 hours) are only found in Kolkata. Therefore, from this
4.2 State Wise Socio-Economic Conditions of Slums and Beggars from Lucknow. . . 59

Table 4.7 Distribution wise Number of working hours Lucknow Kolkata

number of working hours in a
1–5 8 3
day from beggars
16% 6%
6–10 42 44
84% 88%
11–15 0 3
0% 6%
Total 50 50
100% 100%

Number of Working Hours Attended by Beggars in a Day

100% 84% 88%

80%

60%

40%
16%
20% 6% 6%
0%
0%
1-5 Hours 6-10 Hours 11-15 Hours

Lucknow Kolkata

Fig. 4.7 Distribution wise number of working hours in a day from beggars

Table 4.8 Distribution wise How much paid/earned Lucknow Kolkata Total
amount paid/earned per day
10–100 29 26 55
among beggars from
58% 52% 55%
Lucknow and Kolkata
101–200 12 21 33
24% 42% 33%
201–300 9 3 12
18% 6% 12%
Total 50 50 100
100% 100% 100%

table, we find that beggars from Kolkata are working hard by utilizing more time on
begging than Lucknow. Working hours is also positively related to income of the
respondents, a greater number of working hours can generate more income, therefore
Kolkata beggars are in better position to Lucknow beggars (Fig. 4.7).
Table 4.8 shows the amount earned by beggars during a day from Lucknow and
Kolkata. In Lucknow 58 percent beggars and in Kolkata 52 percent of beggars are
earning 10–100 rupees per day. Similarly, beggars who are earning from 101 to
200 rupees per day are 24 percent from Lucknow and 42 percent from Kolkata.
60 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Earnings per Day

70%
58%
60%
52%
50%
42%
40%

30% 24%
18%
20%

10% 6%

0%
10-100 101-200 201-300

Lucknow Kolkata

Fig. 4.8 Distribution wise amount paid/earned per day among Beggars from Lucknow and Kolkata

Table 4.9 Percentage wise Type of house Lucknow Kolkata

housing condition of beggars
Hut 27 24
54% 48%
Semi pucca 2 1
4% 2%
Open sky 21 25
42% 50%
Total 50 50
100% 100%

Beggars who are earning 201–300 rupees are 18 percent from Lucknow and
6 percent from Kolkata. Therefore, we find that beggars from Kolkata are earning
more in comparison to Lucknow beggars (Fig. 4.8).
Table 4.9 shows distribution wise type of Housing beggars living. Beggars are
living in three categories of Housing like Hut, semi Pucca and Open Sky. Beggars
from Lucknow are living as 54 percent in Hut, 4 percent in semi Pucca, and
42 percent are living in the open sky. Similarly, in Kolkata 48 percent in Hut,
2 percent in Semi Pucca, and 50 percent are living in open Sky. This table shows
the harsh reality of beggars in both cities they are almost equally living with the
worst housing conditions (Fig. 4.9).
Table 4.10 shows the drinking water facility available for beggars. Two types of
drinking water facilities are utilized by beggars, one common tap, and Hand Pump/
Bore Well. From Lucknow, all (100 percent) beggars are depended on common tap
available at public places while in Kolkata 92 percent are drinking from the common
tap and 8 percent from Hand Pump/Bore Well (Fig. 4.10).
Table 4.11 shows the electricity facility available for beggars in Lucknow and
Kolkata. In Lucknow none of the beggar’s avail electricity facility while in Kolkata
2 percent of Beggars are using electricity and 98 percent don’t have an electricity
facility (Fig. 4.11).
4.2 State Wise Socio-Economic Conditions of Slums and Beggars from Lucknow. . . 61

Housing condion of Beggars

50%
Open sky
42%

2%
Semi pucca
4%

48%
Hut
54%

0% 10% 20% 30% 40% 50% 60%

Kolkata Lucknow

Fig. 4.9 Percentage wise housing condition of beggars

Table 4.10 Type of drinking Drinking water facility Lucknow Kolkata

water facility
Common tap 50 46
100% 92%
Hand pump/bore well 0 4
0% 8%
Total 50 50
100% 100%

Drinking water Facility

120%
100%
100% 92%

80%

60%

40%

20% 8%
0%
0%
Lucknow Kolkata

Common tap Hand pump/Bore well

Fig. 4.10 Type of drinking water facility

Table 4.12 shows the type of Fuel used by beggars. None of the beggars from
Lucknow is using LPG and 2 percent of the beggars from Kolkata are using LPG fuel
for cooking. Kerosene is used by 22 percent in Lucknow and 16 percent in Kolkata,
Firewood 54 percent in Lucknow and 20 percent in Kolkata. Other means of fuels
24 percent from Lucknow and 62 percent in Kolkata (Fig. 4.12).
62 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.11 Percentage wise Electricity Lucknow Kolkata

electricity facility available for
Yes 0 1
beggars
0% 2%
No 50 49
100% 98%
Total 50 50
100% 100%

Lucknow Kolkata
0% 2%

98%
100%

Yes No Yes No

Fig. 4.11 Percentage wise electricity facility available for beggars

Table 4.12 Type of fuel used Type of fuel Lucknow Kolkata

by beggars
LPG/gas 0 1
0% 2%
Kerosene 11 8
22% 16%
Firewood 27 10
54% 20%
Others (eating outside) 12 31
24% 62%
Total 50 50
100% 100%

Table 4.13 shows type of toilet facility available for beggars is as private
in-House 2 percent in Kolkata and none in Lucknow Commonly shared 44 percent
from Lucknow and 40 percent from Kolkata and open field 56 percent from
Lucknow and 58 percent from Kolkata. It shows the sanitation facility is better in
Kolkata as compared to Lucknow because more people from Lucknow are going
open fields than Kolkata. Second more people are participants of commonly shared
public toilets in Lucknow than Kolkata (Fig. 4.13).
Table 4.14 shows the economic status of beggars in Lucknow and Kolkata.
Beggars who are under the BPL category is 48 percent from Lucknow and 3 percent
4.2 State Wise Socio-Economic Conditions of Slums and Beggars from Lucknow. . . 63

Type of Fuel
70% 62%
60% 54%
50%
40%
30% 22% 24%
20%
20% 16%

10% 2%
0%
0%
LPG/Gas Kerosene Firewood Others

Lucknow Kolkata

Fig. 4.12 Type of fuel used by beggars

Table 4.13 Type of toilet Type of toilet facility Lucknow Kolkata

facility availed by beggars
Private in house 0 1
0% 2%
Commonly shared 22 20
44% 40%
Open fields 28 29
56% 58%
Total 50 50
100% 100%

Type of Toilet Facility

56% 58%
60%
44%
50% 40%
40%
30%
20%
10% 0% 2%

0%
Private in house Commonly shared Open fields

Lucknow Kolkata

Fig. 4.13 Type of toilet facility availed by beggars

64 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.14 Economic status Economic status Lucknow Kolkata

of beggars
BPL 24 15
48% 3%
RED Card 2 1
4% 2%
No Ration Card 24 34
48% 68%
Total 50 50
100% 100%

Economic Status of Beggars

68%
70%
60% 48% 48%
50%
40%
30%
20%
3% 4% 2%
10%
0%
BPL RED CARD NO RATION CARD

Lucknow Kolkata

Fig. 4.14 Economic status of beggars

Table 4.15 Assets owned by Assets of the house hold Lucknow Kolkata
the house hold
Cycle 2 0
4% 0%
No assets 48 50
96% 100%
Total 50 50
100% 100%

from Kolkata, RED Card 4 percent from Lucknow, and 2 percent from Kolkata.
Beggars who don’t have Ration Card 48 percent from Lucknow and 68 percent from
Kolkata respectively. Therefore, this table shows that these people are forced to beg
to feed their families (Fig. 4.14).
Table 4.15 shows assets owned by Beggars in Lucknow and Kolkata. The assets
owned by beggars are cycle 4 percent from Lucknow beggars and none from Kolkata
and 96 percent didn’t possess any asset in Lucknow and Kolkata beggars don’t have
an asset (Fig. 4.15).
4.3 State-wise Socio-Economic Conditions of Slum Dwellers from Lucknow and Kolkata 65

Assets of the Beggars

150%

96% 100%
100%

50%
4% 0%
0%
Lucknow Kolkata

Cycle No assets

Fig. 4.15 Assets owned by the house hold

Table 4.16 Gender wise per- Name of Gender Lucknow Kolkata Total
centage of slums in Lucknow
Male 82 121 203
and Kolkata
54.67 80.67 67.67
Female 68 29 97
45.33 19.33 32.33
Total 150 150 300
100.0 100.0 100

4.3 State-wise Socio-Economic Conditions of Slum Dwellers

from Lucknow and Kolkata

Table 4.16 shows the percentage-wise distribution of Slums in Lucknow and

Kolkata. From our collected Data of 300 samples of slum dwellers in Lucknow
and Kolkata. The male percentages of Lucknow 54.67 percent and the female 45.33
percent. In case of Lucknow 80.67 percent are male while 19.33 percent are females.
So, in both cities male respondents are larger than female, but if we look with in
females in both cities, we find more females from Lucknow in comparison to
Kolkata. Similarly, in case of male’s reverse is the case (Fig. 4.16).
Table 4.17 The social status of Slums in Lucknow and Kolkata is as follows. The
general caste distribution is 15.33 percent from Lucknow and 42 percent Kolkata.
from SC 62.67 percent are from Lucknow and 17.33 percent belongs to Kolkata.
Equal participation from ST category from both the cities with 0.67 percent. In Case
of OBC category 21.33 percent from Lucknow and 40 percent are from Kolkata. In
conclusion, we find lower caste groups has more participation from Lucknow while
in Kolkata general caste people are living in slums with bigger numbers than other
lower caste groups (Fig. 4.17).
Table 4.18 shows the level of education, the people from illiterate category are
63 percent from Lucknow and 28 percent from Kolkata. The (Primary up to V)
category 12 percent from Lucknow and 28.67 percent are from Kolkata. From
(Upper Primary up to VI–VIII) 12 percent are from Lucknow and 20 percent from
Kolkata. The (Secondary IX–X) comprises 8 percent from Lucknow and 4.67
66 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Percentage wise Gender of Slums

90 80.67
80
70
60 54.67
50 45.33
40
30
19.33
20
10
0
Lucknow Kolkata

Male Female

Fig. 4.16 Gender wise percentage of slums in Lucknow and Kolkata

Table 4.17 State wise caste Name of caste Lucknow Kolkata Total
of slums in Lucknow and
General 23 63 86
Kolkata
15.33 42.0 28.67
SC 94 26 120
62.67 17.33 40.0
ST 1 1 2
0.67 0.67 0.67
OBC 32 60 92
21.33 40.0 30.67
Total 150 150 300
100.0 100.0 100.0

Social status of Slums

70 62.67
60

50
42 40
40

30
21.33
20 15.33 17.33

10
0.67 0.67
0
General SC ST OBC

Lucknow Kolkata

Fig. 4.17 State wise caste of Slums in Lucknow and Kolkata

4.3 State-wise Socio-Economic Conditions of Slum Dwellers from Lucknow and Kolkata 67

Table 4.18 Education of slums in Lucknow and Kolkata

Education Lucknow Kolkata Total
Illiterate 92 42 134
63.33 28.00 44.67
Primary up to V 18 43 61
12.0 28.67 20.33
Upper primary up to (VI–VIII) 18 30 48
12.0 20.0 16.00
Secondary (IX–X) 12 7 19
8.0 4.67 6.33
Senior secondary 1 11 12
0.67 7.33 4.0
Diploma 5 0 5
3.33 0.0 1.67
Graduate and above 4 17 21
2.67 11.33 7.00
Total 150 150 300
100.0 100.0 100

Education of Slums

70 63.33
60
50 43
40 28 28.67
30 18
20 12 11.33
8 7.33
4.67 3.33 2.67
10 0.67 0
0
Illiterate Primary up Upper Secondary Senior Diploma Graduate
to V Primary up (IX to X) Secondary and Above
to (VI-VIII)

Lucknow Kolkata

Fig. 4.18 Education of slums in Lucknow and Kolkata

percent from Kolkata. The (Senior secondary) achievers are 0.67 percent from
Lucknow and 7.33 percent from Kolkata. The Diploma holders are 3.33 percent
from Lucknow and no one from Kolkata. Moreover, the Graduate and Above from
Lucknow are 2.67 percent Lucknow and 11.33 percent from Kolkata. So, highest
number of illiterates are from Lucknow, second highest number of educated people
are from Kolkata (Fig. 4.18).
Table 4.19 shows the annual income of Slums. The level of income is as follows,
the income category from (10,000–20,000) rupees represents 12 percent from
Lucknow and 2 percent from Kolkata. The second category of income is
(20,001–40,000) rupees only 0.67 percent of slums from Kolkata 3.33 percent
68 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.19 Annual income Income Lucknow Kolkata Total

of slums in Lucknow and
10,000–20,000 18 3 21
Kolkata
12.0 2.0 7.0
20,001–40,000 1 5 6
0.67 3.33 2.0
40,001–60,000 18 48 66
12.0 32.00 22.00
60,001–100,000 57 24 81
38.0 16.0 27.0
100,001 above 56 70 126
37.33 46.67 42.0
Total 150 150 300
100.0 100.0 100.0

Income of Slums

46.67
50
38 37.33
40 32

30

16
20 12 12

10 2 3.33
0.67
0
10000-20000 21000-40000 41000-60000 61000-100000 100001 above

Lucknow Kolkata

Fig. 4.19 Annual income of slums in Lucknow and Kolkata

belong to this level. The third category of income (40,001–60,000) Rupees covers
12 percent of slums from Lucknow 32 percent from Kolkata. From
(60,001–100,000) 38 percent and 16 percent from Lucknow and Kolkata. The last
category of annual income (100,001 and above) rupees covers 37.33 percent from
Lucknow and 46.67 percent from Kolkata. In conclusion Kolkata slums are better
than Lucknow (Fig. 4.19).
Table 4.20 shows frequency of Income among slums, Daily wages 48 percent in
Lucknow, 19.33 percent in Kolkata. Weekly income 2 percent and 23.33 percent,
Monthly income 5.33 percent and 1.33 percent, Irregular income 44.67 percent and
55.33 percent and others 0 percent and 0.33 percent from Lucknow and Kolkata
slums (Fig. 4.20).
Table 4.21 shows the number of working days attend by Slums dwellers from
Lucknow and Kolkata. The first working category from (1 to 10 days) represents
0.67 percent from Lucknow and 10 percent from Kolkata. The second working
category from (11 to 20 working days) in a month are 3.33 percent from Lucknow
4.3 State-wise Socio-Economic Conditions of Slum Dwellers from Lucknow and Kolkata 69

Table 4.20 Frequency of Income Lucknow Kolkata Total

income among slum dwellers
Daily 72 29 101
48.0 19.33 33.67
Weekly 3 35 38
2.0 23.33 16.67
Monthly 8 2 10
5.33 1.33 3.33
Irregular 67 83 150
44.67 55.33 50.00
Others 0 1 1
0.0 0.67 0.33
Total 150 150 300
100.0 100.0 100.0

Frequency of Income among Slums

60 55.33
48
50 44.67

40

30
23.33
19.33
20

10 5.33
2 1.33 0 0.67
0
Daily Weekly Monthly Irregular others

Lucknow Kolkata

Fig. 4.20 Frequency of income among slum dwellers

Table 4.21 Percentage of Number of working days Lucknow Kolkata Total

number of working days
1–10 days 1 15 16
among slums
0.67 10.0 5.33
11–20 days 5 59 64
3.33 39.33 21.33
21–30 days 144 76 220
96.00 50.67 73.33
Total 150 150 300
100.0 100.0 100.0

and 39.33 percent from Kolkata. The third working category from (21 to 30 working
days) per month, 96 percent from Lucknow and 50.67 percent from Kolkata. To sum
up we find Lucknow slums are mostly working in between 21 and 30 days per
month, but in case of Kolkata the slums are taking part more or less in all the three
workings days (Fig. 4.21).
70 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Number of working days aended by Slums

120
96
100

80

60 50.67
39.33
40

20 10
0.67 3.33
0
1-10days 11-20days 21-30days

Lucknow Kolkata

Fig. 4.21 Percentage of number of working days among slums

Table 4.22 Number of Number of working hours Lucknow Kolkata Total

working hours attended by
1–5 0 11 11
slums
0.0 7.33 3.67
6–10 144 121 265
96.00 80.67 88.33
11–15 6 18 24
4.0 12.0 8.0
Total 150 150 300
100.0 100.0 100.0

Table 4.22 shows the number of working hours attended by Slum in Lucknow
and Kolkata. Slums who are attending (1–5 hours) daily are 0 percent from Lucknow
and 7.33 percent from Kolkata. Those who are working for (6–10 hours) are
96 percent from Lucknow and 80.67 percent from Kolkata. Slums who are working
more than (11–15 hours) are 4 percent from Lucknow and 12 percent found in
Kolkata. Therefore, it shows Lucknow slums are in majority working in between
6 and 10 hours per day. In Kolkata more than 10 percent slums are working equally
from (1–5) hours and (11–15) hours daily. Those who are working from (1–5 hours)
per day may be earning more with in short duration of timing, either they may be
working in different occupations in a day, and the people who are working more than
11 hours may be extreme poor (Fig. 4.22).
Table 4.23 shows the distribution wise type of House. Slums are living in three
categories of Housing like Hut, semi Pucca and Pucca. People who are living in Hut
are 74 percent from Lucknow and 22.67 percent from Kolkata. Slums living in Semi
pucca are 24 percent from Lucknow and 64.67 percent from Kolkata. Similarly,
people who have Pucca houses 2 percent are from Lucknow and 12.67 percent from
Kolkata. So, in conclusion we find Kolkata slums have good housing in comparison
to Lucknow slums (Fig. 4.23).
4.3 State-wise Socio-Economic Conditions of Slum Dwellers from Lucknow and Kolkata 71

Number of Working hours attended by Slums

150
96
100 80.67

50 12
0 7.33 4
0
1-5 Hours 6-10Hours 11-15 Hours

Lucknow Kolkata

Fig. 4.22 Number of working hours attended by slums

Table 4.23 Distribution wise Type of house Lucknow Kolkata Total

type of house
Hut 111 34 145
74.0 22.67 48.33
Semi pucca 36 97 133
24.0 64.67 44.33
Pucca 3 19 22
2.0 12.67 7.33
Open sky 0 0 0
0.0 0.0 0.0
Total 150 150 300
100.0 100.0 100.0

Type of House (Slums)

80 74
70 64.67
60
50
40
30 22.67 24
20 12.67
10 2
0
Hut Semi pucca Pucca

Lucknow Kolkata

Fig. 4.23 Distribution wise type of house

Table 4.24 shows the drinking water facility available for Slums. Two types of
drinking water facilities are utilized by Slums, one common tap, and a Hand Pump/
Bore Well. From Lucknow 36 percent and Kolkata 10.67 percent depend on
common tap. People who are taking water from Hand Pump/Bore Well 64 percent
are from Lucknow and 89.33 percent are from Kolkata. To sum-up we find Lucknow
slums are more dependent on public taps to get water were Kolkata people are
enjoying these facilities at home (Fig. 4.24).
72 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.24 Drinking water Drinking water facility Lucknow Kolkata Total
facility of Slums
Common tap 54 16 70
36.0 10.67 23.33
Hand pump/bore well 96 134 230
64.0 89.33 76.67
Total 150 150 300
100.0 100.0 100.0

Drinking water Facility (Slums)

89.33
100

80 64

60 36
40
10.67
20

0
Lucknow Kolkata

Common tap Hand pump/Bore well

Fig. 4.24 Drinking water facility of slums

Table 4.25 Electricity facil- Electricity Lucknow Kolkata Total

ity available for slums in
Yes 43 124 167
Lucknow and Kolkata
28.67 82.67 55.67
No 107 26 133
71.33 17.33 44.33
Total 150 150 300
100.0 100.0 100.0

Table 4.25 shows the electricity facility available for Slums in Lucknow and
Kolkata. In Lucknow 28 percent avail electricity facility while in Kolkata 82.67
percent Slums who are not using electricity is 71.33 percent and 17.33 percent from
Lucknow and Kolkata. Therefore, we can conclude that the availability of electricity
for Kolkata slums are better off than Lucknow slums. The reasons could be that Uttar
Pradesh state is a bigger state to provide easy access of electricity to every household
looks difficult and these populations are mostly treated non-residents of the state
(Fig. 4.25).
Table 4.26 shows the type of Fuel used by Slums, from Lucknow the LPG/Gas
consumption is done by 28.67 percent of the Slums and from Kolkata 46.67 percent
for cooking. Kerosene is used by 1.33 percent in Lucknow and 28.67 percent in
4.3 State-wise Socio-Economic Conditions of Slum Dwellers from Lucknow and Kolkata 73

Lucknow Kolkata

17.33
28.67

71.33
82.67

Yes No Yes No

Fig. 4.25 Electricity facility available for slums in Lucknow and Kolkata

Table 4.26 Type of fuel Type of fuel Lucknow Kolkata Total

(slums)
LPG/gas 43 70 113
28.67 46.67 37.67
Kerosene 2 43 45
1.33 28.67 15.00
Firewood 105 37 142
70.0 24.67 47.33
Total 150 150 300
100.0 100.0 100.0

Kolkata, Firewood 70 percent in Lucknow and 24.67 percent in Kolkata. We find

people in Lucknow are more dependent on firewood than Kolkata for cooking
(Fig. 4.26).
Table 4.27 shows type of sanitation facility available for Slums, 34.67 percent in
Lucknow and 46.67 percent in Kolkata have own toilet facility available in their
Houses, Commonly shared 30 percent from Lucknow and 52.67 percent from
Kolkata and open field 35.33 percent from Lucknow and 0.67 percent from Kolkata.
From the table we find in Lucknow people are lacking toilet facility available to them
that is why they are going open fields but the condition of slums in Kolkata is much
better because 99 percent people have toilets available at their disposal (Fig. 4.27).
Table 4.28 shows the number of disable persons among Lucknow and Kolkata
slums. The disable persons in Lucknow were 12.67 percent and 15.33 percent in
Kolkata. So, we find slums in Kolkata are more disable than Lucknow (Fig. 4.28).
Table 4.29 shows the economic status of Slums in Lucknow and Kolkata. Slums
who are under the BPL category are 90 percent from Lucknow and 52.67 percent
from Kolkata, APL 8.67 percent and 45.33 percent, RED Card 0 percent from
Lucknow and 3 percent from Kolkata. Slums who don’t have Ration Card 2 percent
from Lucknow and 0 percent from Kolkata respectively (Fig. 4.29).
74 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Type of Fuel (Slums)

80
70
70
60
50 46.67

40
28.67 28.67
30 24.67
20
10
1.33
0
LPG/Gas Kerosene Firewood

Lucknow Kolkata

Fig. 4.26 Type of fuel (slums)

Table 4.27 Type of toilet Type of toilet facility Lucknow Kolkata Total
facility (slums)
Private in house 53 70 122
34.67 46.67 40.67
Commonly shared 46 79 124
30.0 52.67 41.33
Open fields 51 01 54
35.33 0.67 18.0
Total 150 150 300
100.0 100.0 100.0

Type of Toilet Facility (Slums)

60 52.67
50 46.67

40 34.67 35.33
30
30
20
10
0.67
0
Private in house Commonly shared Open fields

Lucknow Kolkata

Fig. 4.27 Type of toilet facility (slums)

Table 4.30 shows assets owned by Slums in Lucknow and Kolkata. The assets
owned by Slums are car 0 percent and 0.67 percent from Lucknow and Kolkata.
Scooter 4 percent and 6.67 percent, Cycle 30 percent and 27.33 percent, NO Assets
66 percent, and 65.33 percent from Lucknow and Kolkata (Fig. 4.30).
4.4 Access and Non-Access Patterns of Financial Products and Services (Slums) 75

Table 4.28 Percentage wise Disability Lucknow Kolkata Total

number of disable among
Yes 19 23 42
slums
12.67 15.33 14.0
No 131 127 258
87.33 84.67 86.00
Total 150 150 300
100.0 100.0 100.0

Disable People among Slums

100
87.33 84.67
90
80
70
60
50
40
30
20 12.67 15.33
10
0
Lucknow Kolkata

Yes No

Fig. 4.28 Percentage wise number of disable among slums

Table 4.29 Economic status Economic status Lucknow Kolkata Total

of slums in Lucknow and
BPL 135 79 214
Kolkata
90.0 52.67 71.33
APL 13 68 81
8.67 45.33 27.0
RED Card 0 3 3
0.0 2.0 1.0
No Ration Card 2 0 2
1.33 0.0 0.67
Total 150 150 300
100.0 100.0 100.0

4.4 Access and Non-Access Patterns of Financial Products

and Services (Slums)

Table 4.31 shows access to financial services among Slums in Lucknow and
Kolkata. The below table shows awareness, Holding, and Transactions of financial
Products. The Awareness of Saving Bank Account is 46.33 percent. The holding of
Saving Bank is 17.33 percent and Transactions are done by 13.67 percent of the
sample. People are less aware (Below 4 percent) about other financial Products (like
Recurring Deposit, Fixed Deposit, General Credit Card, other Bank Loans, Credit
76 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Economic Status
100 90
90
80
70
60 52.67
50 45.33
40
30
20
8.67
10 0 2 1.33 0
0
BPL APL RED CARD NO RATION CARD

Lucknow Kolkata

Fig. 4.29 Economic status of slums in Lucknow and Kolkata

Table 4.30 Assets owned by Assets of the house hold Lucknow Kolkata Total
the house hold
Car 0 1 1
0.0 0.67 0.33
Scooter 6 10 16
4.0 6.67 5.33
Cycle 45 41 86
30.0 27.33 28.67
No assets 99 98 197
66.0 65.33 65.67
Total 150 150 300
100.0 100.0 100.0

Assests of Slums

66 65.33
70
60
50
40 30 27.33
30
20 6.67
0.67 4
10 0
0
CAR SCOOTER Cycle No assets

Lucknow Kolkata

Fig. 4.30 Assets owned by the house hold

4.4 Access and Non-Access Patterns of Financial Products and Services (Slums) 77

Table 4.31 About banking & savings related financial products: (Slums from Lucknow &
Kolkata) awareness
Awareness of Holding of Transactions of
financial financial financial
products products products
Name of the product Yes No Yes No Yes No
Saving Bank Account/No Frill 139 161 52 248 41 259
Account (either with Commercial or (46.33) (53.67) (17.33) (82.67) (13.67) (86.33)
Cooperative Bank)
Recurring Deposit 1 299 1 299 1 299
(0.33) (99.67) (0.33) (99.67) (0.33) (99.67)
Fixed Deposit 12 288 12 288 3 297
(4) (96) (4) (96) (1) (99)
General Credit Card (Artisan CC, 5 295 3 297 2 298
Laghu Udyami Card, Swarojgar (1.67) (98.33) (1) (99) (0.67) (99.33)
CC & Weaver’s Card etc.)
Any other Bank Loans (Home/Edu- 2 298 1 299 1 299
cation/Vehicle/Personal etc) (0.67) (99.33) (0.33) (99.67) (0.33) (99.67)
Credit Card 1 299 0 300 0 300
(0.33) (99.67) (0.0) (100) (0.0) (100)
Public Provident Fund 1 299 1 299 1 299
(0.33) (99.67) (0.33) (99.67) (0.33) (99.67)
Post Office Savings Scheme 1 299 0 300 0 300
(0.33) (99.67) (0.0) (100) (0.0) (100)
National Savings Certificate/ 2 298 1 299 1 299
Kisan Vikas Patra (0.67) (99.33) (0.33) (99.67) (0.33) (99.67)

card, Public Provident Fund, Post Office Savings Scheme, National Savings Certif-
icate.) Therefore, the services availed by Slum Dwellers are below 4 percent.
In Table 4.32 we try to know what the reasons are, why slums didn’t open a bank
account. The responses are 98 percent of the people don’t have money to open a
bank account. The other reasons for not opening a bank account asked in various
household studies are not much relevant in the case of Slums. Therefore, the bigger
concern is not only to switch towards supply-oriented schemes to enshrine financial
services for the needy people, rather we should focus on factors that are responsible
for the demand side also. We should empower people to and make them eligible to
open the bank accounts.
Table 4.33 shows types of banking services availed by Slum Dwellers are
8 percent are using a Debit/ATM card. Rest the important digital services (Internet
Banking, Remittances, Mobile Banking, Direct Benefit Transfer, etc) provided by
banks. None of these services has been availed by Slums Dwellers in both of the
regions.
Table 4.34 shows reasons why not urban slums of Lucknow and Kolkata using
remittance of the facility provided by the banks. The reasons for not availing
remittance are 94 percent people said they don’t have enough money, 4 percent
said they lack knowledge to use remittance facility and the rest 2 percent said it
involves high cost, and other reasons that are why they are not using the facility.
78 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.32 Reasons for not opened a bank account

Reasons for not opened a bank account Frequency (percent)
Not enough money 294
98.00
Do not have necessary documents/KYC 1
0.33
Complicated/difficult procedure 2
0.67
Others 3
1.00
Someone else in family already has account 0
0.0
Do not trust bank 0
0.0
Religious reason 0
0.0
No need for bank account 0
0.0
Total 300
100.00

Table 4.33 Banking Facilities/ Services availed by [Slums from Lucknow & Kolkata]
Banking facilities/services availed Frequency (percent)
Debit Card/ATM 24
(8)
Internet Banking 0
0.0
Remittances (RTGS/NEFT/ECS/others) 0
0.0
Mobile Banking 0
0.0
Direct Benefit Transfer (DBT) 0
0.0
Others 276
(92)
Total 300
100.00

Table 4.35 shows reasons for not getting credit or loan facility from banks,
10 percent people said they don’t need credit, it may be because of religious barriers
or they may be a bit well off but on the other side, they may be tired of banking
procedure in granting the credit/loan. 29 percent said they face the problem of
unawareness, 6 percent said the banking procedures are difficult to understand,
0.67 percent are getting credit from unregulated markets. 46.67 percent lack the
necessary documents. Therefore, we need to focus on both supply and demand-side
issues before designing any policy and make people capable to utilize these
programs.
4.4 Access and Non-Access Patterns of Financial Products and Services (Slums) 79

Table 4.34 What are the rea- Frequency (percent)

sons as to why you have not
Not enough money 282
availed remittance facility of
94.00
banks?
Lack of knowledge 12
4.00
Involves high cost 1
0.33
Procedures are difficult to understand 1
0.33
No requirement of remittance 0
0.0
Others 4
1.33
Total 300
100.00

Table 4.35 What are the reasons as to why you have not availed credit or loan facility?
Why you have not availed credit or loan facility Frequency (percent)
No need of credit/loan 30
10.00
Lack of knowledge 87
29.00
Procedures are difficult to understand 19
6.33
Availed credit from other unregulated sources 2
0.67
Do not have necessary documents 140
46.67
Banks are too far away 0
0.0
Involves high cost & interest 0
0.0
Others 22
7.33
Total 300
100.00

In case of saving account, people are not willing to open bank account due to lack
of money or income. However, in case of loan only 10 percent people are saying,
they do not need loan, which means, 90 percent people are willing to take loan. It
indicates the importance of finance facility in life of poor. Therefore, in case of loan
facility, supply side factors are more important and are working as hurdle in access
for poor.
80 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.36 Whether any Banking Correspondents (BCs) available in your area for delivery of
banking services? (FI)
Banking Correspondents (BCs) available in your area Frequency (percent)
Yes 6
2.00
No 194
64.67
Not aware 100
33.33
Total 300
100.00

Table 4.37 If Yes, have you Banking services through BCs Frequency (percent)
availed any banking services
Yes 1
through BCs?
0.33
No 299
99.67
Total 300
100.00

Table 4.36 shows the availability of a Banking correspondent and his services to
people. 64.67 percent of people responded that BCs are not available and only
2 percent of people said BC’s are available in their locations. 33.33 percent said
they are not aware of BC’s. Therefore, it is again a question mark for policymakers
how these programs are implemented at gross route level and why they are
unsuccessful?
Table 4.37 Shows Banking services availed through BC’s. Maximum people
don’t use any Banking service from BCs 99.67 percent are not using any service.
Therefore, The BC model is not feasible for these sections.
Table 4.38 showed reasons for not availing the banking services from the BCs are
they don’t trust BCs 0.67 percent, BC s are not functioning well, nor they provide
cards, they provide us limited services. The bigger reason for not availing BCs
services because they are not aware, nor they have knowledge of BCs.
Table 4.39 shows loans/credit availed other than banks are as follows 98.67
percent are taking help from Friends/Relatives and 1.33 percent didn’t avail any
loan. Therefore, it shows slums have been excluded from formal banking system.
They are fulfilling their credit needs informally. The reasons are poor people don’t
have income and essential documents to use these services.
Table 4.40 shows awareness, holdings, and transactions of insurance products.
Only 2.33 percent are aware of the Life insurance scheme. Awareness of Motor
insurance only 1 percent. For the rest of the insurance products, people are not aware
of it. Holdings and transactions are faraway questions because these people neither
hold any insurance products.
4.4 Access and Non-Access Patterns of Financial Products and Services (Slums) 81

Table 4.38 If No, reasons for not availing banking services through BCs
Reasons for not availing banking services through (BCs) area Frequency (percent)
Do not trust BCs 2
0.67
BCs not functioning/card not given 0
0.0
Limited services available 3
1
BCs not available on all days 0
0.0
Others 295
98.33
Total 300
100.00

Table 4.39 Did you avail any Loan from sources other than banks Frequency (percent)
loan from sources other than
Micro finance institutions 0
Banks?
0.0
Self help groups (SHGs) 0
0.0
Money lender 0
0.0
Friends/relatives 296
98.67
Not availed 4
1.33
Total 300
100.00

Table 4.41 shows Percentage-wise reasons for not having insurance. 81 percent
said it is because of lack of knowledge, 0.67 percent said it is because of physical
distance from banks, 17.67 percent they don’t have enough money, 0.33 percent said
it is because of the high cost and are confused about choice. So, the factors
responsible are supply oriented like people are unaware about banking products,
unsuitable and costly products, bigger problem is they are financially illiterate. From
demand side they lack money and documents to avail such services.
Table 4.42 shows what type of insurance you have applied for, and only 0.67
percent have applied for personal Accidental Insurance.
Table 4.43 shows us access to pension products by Slums people who are not
aware of pension schemes. The formal banking services are showing a huge gap
among slums as per their access is a concern. Therefore, it seems financial services
are not demand oriented. Employees provident fund is not demand oriented as
people in slums are mostly unemployed and their informal jobs are not encouraged
by supply base products.
82 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.40 Access to insurance products

Awareness of Holding of Transactions of
insurance products insurance products insurance products
Name of the product Yes No Yes No Yes No
Life insurance 7 293 4 296 4 296
2.33 97.67 1.33 98.67 1.33 98.67
Motor insurance 3 297 2 298 2 298
1.00 99.00 0.67 99.33 0.67 99.33
Health insurance 2 298 0 300 0 300
0.67 99.33 0.0 100.0 0.0 100.0
Home insurance 1 299 0 300 0 300
0.33 99.67 0.0 100.0 0.0 100.0
Crop insurance 1 299 0 300 0 300
0.33 99.67 0.0 100.0 0.0 100.0
Cattle/livestock insurance 1 299 0 300 0 300
0.33 99.67 0.0 100.0 0.0 100.0
General insurance 1 299 0 300 0 300
0.33 99.67 0.0 100.0 0.0 100.0

Table 4.41 What are the reasons why you do not have Insurance?
Reasons why you do not have insurance? Frequency (percent)
Lack of knowledge about insurance 243
81.00
Physically/financially 2
0.67
Not enough earning/money 53
17.67
Insurance are costly 1
0.33
Confused about choices 1
0.33
Total 300
100.00

Table 4.44 shows us the reasons responsible for not having a pension account are
98 percent claim they don’t have enough earnings and 1.33 percent said these
products are not suitable for us.
4.4 Access and Non-Access Patterns of Financial Products and Services (Slums) 83

Table 4.42 Have you ever made any claim under the following policies?
Have you ever made any claim under the following policies? Frequency (percent)
Health insurance 0
0.0
Motor insurance 0
0.0
Personal accident insurance 0
0.0
Home insurance 0
0.0
Home insurance 0
0.0
Property (factory/office/industry) insurance 0
0.0
Agriculture/crop insurance 0
0.0
(Personal accident insurance) 2
0.67
Not taken any insurance 298
99.33
Total 300
100.00

Table 4.43 Access of pension products (Have you heard or availed the following pension related
products?)
Awareness of Holding of Transactions of
pension products pension products pension products
Name of the pension product Yes No Yes No Yes No
Employees provident fund (EPF) 0 300 0 300 0 300
0.0 100.0 0.0 100.0 0.0 100.0
National pension scheme (NPS) 3 297 1 299 1 299
1.00 99.00 0.33 99.67 0.33 99.67
Family/employee pension scheme 0 300 0 300 0 300
0.0 100.0 0.0 100.0 0.0 100.0

Table 4.44 What are the reasons why you do not have a pension account?
Have you ever made any claim under the following policies? Frequency (percent)
Not enough earning/money 294
98.00
Have invested in other financial products 2
0.67
Product and services are not available 4
1.33
Total 300
100.00
84 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

4.5 Access and Non-Access Patterns of Financial Products

and Services (Beggars)

Table 4.45 shows awareness about various saving products by beggars. None of the
saving products has been used by beggars and more than 98 percent of beggars are
unaware of these products. So, it again raises the question of how to include them in
financial inclusion and why they are not part of our formal banking system till date?
Therefore, we need to address issues and try to design policies as per the needs of the
people.
Table 4.46 Reasons for opening a Bank account among beggars are 2 percent said
them don’t have enough Money; 97 percent don’t have the necessary documents to
open a bank account.
Table 4.47 Banking facilities or services availed by Beggars. None of the beggars
are availed of any banking service from the formal banking system in Lucknow and
Kolkata.
Table 4.48 Reasons for not Availing any Remittance facility from the bank is
because 97 percent of people don’t have enough money and 3 percent of people
don’t have knowledge about banking remittance.
Table 4.49 Reasons for not availing credit from banks is due to the following
reasons, 2 percent said they don’t need credit, 33 percent didn’t have knowledge how

Table 4.45 Awareness about banking & savings related financial products: (beggars from Luck-
now & Kolkata)
Awareness Holding of Transactions
of financial financial of financial
products products products
Name of the product Yes No Yes No Yes No
Saving Bank Account / No Frill Account (either 6 94 0 100 0 100
with Commercial or Cooperative Bank) (6) (94) 0.0 100.0 0.0 100.0
Recurring Deposit 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Fixed Deposit 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
General Credit Card (Artisan CC, Laghu Udyami 0 100 0 100 0 100
Card, Swarojgar CC & Weaver’s Card etc.) 0.0 100.0 0.0 100.0 0.0 100.0
Any other Bank Loans (Home/Education / Vehi- 0 100 0 100 0 100
cle/Personal etc) 0.0 100.0 0.0 100.0 0.0 100.0
Credit Card 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Public Provident Fund 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Post Office Savings Scheme 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
National Savings Certificate/ 0 100 0 100 0 100
Kisan Vikas Patra 0.0 100.0 0.0 100.0 0.0 100.0
4.5 Access and Non-Access Patterns of Financial Products and Services (Beggars) 85

Table 4.46 Reasons for not opened a bank Account

Reasons for not opened a bank account Frequency (percent)
Not enough money 2
2
Do not have necessary documents/KYC 97
97
Complicated/difficult procedure 1
1
Someone else in family already has account 0
0.0
Do not trust bank 0
0.0
Religious reason 0
0.0
No need for bank account 0
0.0
Total 100
100.00

Table 4.47 Banking facilities/ Services availed by [Beggars from Lucknow & Kolkata]
Banking facilities/services availed Frequency (percent)
Debit Card/ATM 0
0.0
Internet Banking 0
0.0
Remittances (RTGS/NEFT/ECS/Others) 0
0.0
Mobile Banking 0
0.0
Direct Benefit Transfer (DBT) 0
0.0
Not availed any service 100
100
Total 100

Table 4.48 What are the rea- Frequency (percent)

sons as to why you have not
Not enough money 97
availed remittance facility of
97.00
banks?
Lack of knowledge 3
3.00
Total 100
100.00
86 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.49 What are the reasons as to why you have not availed credit or loan facility?
Why you have not availed credit or loan facility Frequency (percent)
No need of credit/loan 2
2.00
Lack of knowledge 33
33.00
Procedures are difficult to understand 31
31.00
Do not have necessary documents 26
26.00
Others 8
8.00
Total 100
100.00

Table 4.50 Whether any Banking Correspondents (BCs) available in your area for delivery of
banking services? (FI)
Banking Correspondents (BCs) available in your area Frequency (percent)
Yes 1
1.00
No 37
37.00
Not aware 62
62.0
Total 100
100.00

Table 4.51 If Yes, have you Banking services through BCs Frequency (percent)
availed any banking services
Yes 0
through BCs?
0.0
No 100
100.0
Total 100
100.00

to get it, 31 percent claimed banking procedures are difficult to understand, 26 per-
cent don’t have essential documents and 8 percent, beggars have other reasons etc.
Table 4.50 shows information about the Availability of Banking correspondent in
their Locality only 1 percent said BC’s are available in their areas, 37 percent said no
BC’s are not available, and 62 percent of people are not aware of BC’s.
Table 4.51 shows that none of the beggars has availed any banking service from
BCs.
Table 4.52 shows reasons for not availing banking services from BC’s are
because 2 percent Beggars don’t trust BCs, 98 percent have some other reasons.
4.5 Access and Non-Access Patterns of Financial Products and Services (Beggars) 87

Table 4.52 If No, reasons for not availing banking services through BCs?
Reasons for not availing banking services through (BCs) area Frequency (percent)
Do not trust BCs 2
2.0
Others 29
98.0
Total 100
100.00

Table 4.53 Did you avail any Loan from sources other than banks Frequency (percent)
loan from sources other than
Friends/relatives 97
Banks?
97.00
Not availed 3
3.0
Total 100
100.00

Table 4.54 Access of insurance products

Awareness of Holding of Transactions of
insurance products insurance products insurance products
Name of the product Yes No Yes No Yes No
Life insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Motor insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Health insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Home insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Crop insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Cattle/livestock insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
General insurance 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0

Table 4.53 shows Loan availed other than Banks are 97 percent are getting from
Friends/ Relatives and 3 percent didn’t avail of any loan.
Table 4.54 shows access of insurance products among Beggars in Lucknow and
Kolkata is totally missing none of the beggars avail any insurance product in their
name.
Table 4.55 shows Reasons for not having insurance 43 percent of beggars said
they lack knowledge about insurance, 57 percent said they don’t have money.
Table 4.56 shows claim for insurance, none of the beggars have claimed for any
insurance product.
88 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.55 What are the reasons why you do not have insurance?
Reasons why you do not have insurance? Frequency (percent)
Lack of knowledge about insurance 43
43.00
Not enough earning/money 57
57.00
Total 100
100.00

Table 4.56 Have you ever made any claim under the following policies
Have you ever made any claim under the following policies? Frequency (percent)
Yes 0
(personal accident insurance) 0.00
No 100
100.00
Total 100
100.00

Table 4.57 Access of pension products (have you heard or availed the following pension related
products?)
Awareness of Holding of Transactions of
pension products pension products pension products
Name of the pension product Yes No Yes No Yes No
Employees provident fund (EPF) 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
National pension scheme (NPS) 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0
Family/employee pension scheme 0 100 0 100 0 100
0.0 100.0 0.0 100.0 0.0 100.0

Table 4.58 What are the reasons why you do not have a pension account?
Reasons why you do not have a pension account Frequency (percent)
Not enough earning/money 99
99.00
Others 1
1.00
Total 100
100.00

Table 4.57 Shows that none of the beggars have access to the pension schemes
offered by formal banks.
Table 4.58 shows reasons for not having any bank account are 99 percent don’t
have money and 1 percent beggars have other reasons.
4.6 Patterns of Access and Non-Access with Reference to Socio Economic. . . 89

4.6 Patterns of Access and Non-Access with Reference

to Socio Economic Factors Slum Dwellers and Beggars

Table 4.59 shows access of Documents by slums and beggars. Table shows that none
of them have access to Passport 7 percent of slums have access of Driving Licence
and 1 percent of beggars. Access to Pan card 22 percent in case of slums and
1 percent of beggars. Voter ID access 91 percent among slums and 46 percent in
case of beggars. The access of Aadhar Card 91 percent slums and 36 percent
beggars. Therefore, we find that 50 percent beggars have not access to the essential
documents.
Table 4.60 shows percentage-wise Access of PMDY Scheme among Beggars and
Slums, awareness of PMJDY is 25 percent and 63 percent, PMJDY Account
1 percent and 25 percent, PMJDY Rupay Debit Card 1 percent, and 9.66 percent.
PMJDY Deposit Interest non from beggars and 4.33 percent from slums. PMJDY
Accidental Insurance 0.33 percent from slums. PMJDY Minimum Balance 0.66
percent, PMJDY Life cover 0.33 percent, PMJDY Money Transfer 0.33 percent,
PMJDY Govt subsidy 0.66 percent by slums only, and beggars are totally excluded
from these services. Both slums are beggars didn’t access the following services
under PMJDY Overdraft Facility, Access to Insurance, Personal Accidental
Insurance.

Table 4.59 Access of documents

Slums Beggars
Name of the document Access Non-access Access Non-access
Passport 0 300 0 100
0% 100% 0% 100%
Driving Licence 21 279 1 99
7% 93% 1% 99%
Pan Card 66 234 1 99
22% 78% 1% 99%
Voter ID 274 26 46 54
91% 8.66% 46% 54%
NREGA Job-Card 3 297 0 100
1% 99% 0% 100%
Aadhar 275 25 36 100
91% 8.33% 36% 64%
Other notified documents by government 0 300 0 100
0% 100% 0% 100%
Identity cards issued on photograph 1 299 0 100
1% 99% 0% 100%
Identity issued by gazetted officer 1 299 0 100
1% 99% 0% 100%
90 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.60 Schemes wise full details of financial access and financial inclusion
Beggars Slums
Yes No Yes No
Awareness PMJDY 25 75 189 111
25.0 75.0 63.0 37.0
PMJDY Account 1 99 76 224
1.0 99.0 25.0 74.0
PMJDY Rupay Debit Card 1 99 29 271
1.0 99.0 9.66 90.3
PMJDY Deposit Interest 0 100 13 287
0.0 100.0 4.33 95.66
PMJDY Accidental Insurance 0 100 1 299
0.0 100.0 0.33 99.6
PMJDY Minimum Balance 0 100 2 298
0.0 100.0 0.66 99.33
PMJDY Life cover 0 100 1 299
0.0 100.0 0.33 99.6
PMJDY Money Transfer 0 100 1 299
0.0 100.0 0.33 99.6
PMJDY Govt subsidy 0 100 2 298
0.0 100.0 0.66 99.33
Overdraft Facility 0 100 0 300
0.0 100.0 0.0 100.0
Access to Insurance 0 100 0 300
0.0 100.0 0.0 100.0
Personal Accidental Insurance 0 100 0 300
0.0 100.0 0.0 100.0

Table 4.61 shows access to the MUDRA scheme by beggars and slums. Among
slums, they are neither aware nor they are registered while among slums 3.44 percent
are aware and 1 percent people are aware. Therefore, both Slums and beggars are
largely excluded from the MUDRA scheme. They are unaware, they are lacking
essential documents and the products are not suitable for them.
Table 4.62 shows access and awareness of PMJJBY from Slums and Beggars.
Both the populations don’t access this scheme because of numerous reasons like,
they don’t have money, they are not aware and lack of documents are the reasons for
not having access to PMJJBY.
Table 4.63 shows access to PMSBY and APY. In the case of beggars both the
schemes are insignificant, they are unaware and don’t have any access while in case
of slums minor people are aware of the scheme and more than 99 percent don’t have
access.
4.6 Patterns of Access and Non-Access with Reference to Socio Economic. . . 91

Table 4.61 Access of MUDRA scheme by beggars and slums

Beggars Slums
Yes No Yes No
MUDRA awareness 0 100 10 290
RESISTERED in MUDRA 0 100 3 297
Reason of not registered 0 100 5 295
MUDRA loan availed 0 100 1 299
Category of loan MUDRA 0 100 1 299
Purpose of MUDRA loan 0 100 1 299
Type of bank loan 0 100 1 299
Are you satisfied with banking 0 100 2 298
How much time in loan 0 100 2 298
Type of documents demanded by bank 0 100 3 297
Rate of interest paid 0 100 1 299
Have you paid bribe 0 100 0 300
Whom you paid 0 100 0 300
How much you paid 0 100 0 300
Other services under MUDRA 0 100 3 297
Is MUDRA helpful 0 100 0 300

Table 4.62 Access of Beggars Slums

PMJJBY by slums and
Yes No Yes No
beggars
Aware PMJJBY 0 100 5 295
Applied PMJJBY 0 100 0 300
Are you paying monthly premium 0 100 0 300
Are you satisfied annual premium 0 100 0 300
Which insurance company paying 0 100 0 300

Table 4.63 Access of Beggars Slums

PMSBY and APY by slums
Yes No Yes No
and beggars
PMSBY Awareness 0 100 4 296
Applied PMSBY 0 100 1 299
Monthly Premium PMSBY 0 100 1 299
Satisfied Premium 0 100 1 299
Name of Company 0 100 0 300
APY Awareness 0 100 2 298
Applied APY 0 100 0 300
Monthly Primmum 0 100 0 300
92 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

4.7 Determining Factors of Financial Access among Slum

Dwellers and Beggars

Crosstabulation of socio-economic variables and the recent financial inclusion

schemes which were normally distributed has been taken into consideration. Unfor-
tunately, we find only one scheme namely PMJDY showed normality in both the
populations. The rest of the schemes are not having accessed by slums and beggars.
In Table 4.64, shows Caste wise access of PMJDY account from Slums and Beggars.
General Caste 18.42 percent in case of slums and beggars have 1 percent. Similarly,
in case of schedule caste 63.16 percent of slums have access and beggars have no
access in this category. The schedule tribe caste has 1.32 percent and nil among
beggars. The OBC people among slums have 14.13 percent access and no access for
beggars.
In Table 4.65 we analyzed the cross-tabulation of Gender wise access of the
PMJDY Scheme among Slums Dwellers and Beggars. The Gender wise access of
the PMJDY account is 22.17 percent among males and 31.96 among females.
Therefore, we conclude that females have more access than males, it is because
poor women are working and the main target of PMJDY was to provide access to at
least one woman per household.
Table 4.66 shows education-wise access of PMJDY among slums and beggars is
as follows. 32.09 percent of Illiterate, 18.03 percent from Primary up V, 16.67
percent, 16.67 percent, Upper Primary (VI–VIII) 47.37 percent and senior 16.67
percent, and 9.52 percent among Graduate and Above. Therefore, education shows a
significant relation in opening a bank account.

Table 4.64 Tabulation of caste of the respondent PMJDY account slums and beggars
PMJDY account PMJDY account
Caste of the respondent Slums Beggars
Yes No Total Yes No Total
General 14 72 86 1 15 16
16.28 83.72 100.00 6.25 93.75 100.00
18.42 32.14 28.67 1.00 15.15 16.00
Schedule caste 48 72 120 0 51 51
40.00 60.00 100.00 0.00 100.00 100.00
63.16 32.14 40.00 0.00 51.52 51.00
Schedule tribe 1 1 2 0 4 4
50.00 50.00 100.00 0.00 100.00 100.00
1.32 0.45 0.67 0.00 4.04 4.00
OBC 13 79 92 0 29 29
14.13 85.87 100.00 0.00 100.00 100.00
17.11 35.27 30.67 0.00 29.29 29.00
Total 76 224 300 1 99 100
25.33 74.67 100.00 1.00 99.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars 93

Table 4.65 Tabulation of Gender of Respondent and PMJDY account

PMJDY account PMJDY account
Gender of respondent Slums Beggars
Yes No Total Yes No Total
Male 45 158 203 1 72 73
22.17 77.83 100.00 1.37 98.63 100.00
59.21 70.54 67.67 100.00 72.73 73.00
Female 31 66 97 0 27 27
31.96 68.04 100.00 0.00 100.00 100.00
40.79 29.46 32.33 0.00 27.27 27.00
Total 76 224 300 1 99 100
25.33 74.67 100.00 1.00 99.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentage

Table 4.66 Tabulation of education of the respondent PMJDY account

PMJDY account PMJDY account
Education of the respondent Slums Beggars
Yes No Total Yes No Total
Illiterate 43 91 134 1 76 77
32.09 67.91 100.00 1.30 98.70 100.00
56.58 40.63 44.67 100.00 76.77 77.00
Primary up V 11 50 61 0 18 18
18.03 81.97 100.00 0.00 100.00 100.00
14.47 22.32 20.33 0.00 18.18 18.00
Upper primary (VI–VIII) 8 40 48 0 5 5
16.67 83.33 100.00 0.00 100.00 100.00
10.53 17.86 16.00 0.00 5.05 5.00
Secondary (IX–X) 9 10 19 0 0 0
47.37 52.63 100.00 0.00 0.00 0.00
11.84 4.46 6.33 0.00 0.00 0.00
Senior 2 10 12 0 0 0
16.67 83.33 100.00 0.00 0.00 0.00
2.63 4.46 4.00 0.00 0.00 0.00
Diploma 1 4 5 0 0 0
20.00 80.00 100.00 0.00 0.00 0.00
1.32 1.79 1.67 0.00 0.00 0.00
Graduate and above 2 19 21 0 0 0
9.52 90.48 100.00 0.00 0.00 0.00
2.63 8.48 7.00 0.00 0.00 0.00
Total 76 224 300 1 99 100
25.33 74.67 100.00 1.00 99.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages
94 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.67 Tabulation of occupation of the respondent PMJDY account

PMJDY account PMJDY account
Occupation of the respondent Slums Beggars/Begging
Yes No Total Yes No Total
Self employed (agriculture) 0 2 2 1 99 100
0.00 100.00 100.00 1.00 99.00 100.00
0.00 0.89 0.67 100.00 100.00 100.00
Agricultural labour 1 2 3 0 0 0
33.33 66.67 100.00 0.00 0.00 0.00
1.32 0.89 1.00 0.00 0.00 0.00
Self employed (non-agriculture) 5 30 35 0 0 0
14.29 85.71 100.00 0.00 0.00 0.00
6.58 13.39 11.67 0.00 0.00 0.00
Casual labour 64 172 236 0 0 0
27.12 72.88 100.00 0.00 0.00 0.00
84.21 76.79 78.67 0.00 0.00 0.00
Salaried (private) 5 9 14 0 0 0
35.71 64.29 100.00 0.00 0.00 0.00
6.58 4.02 4.67 0.00 0.00 0.00
Housewife/homemaker 1 7 8 0 0 0
12.50 87.50 100.00 0.00 0.00 0.00
1.32 3.13 2.67 0.00 0.00 0.00
Others 0 2 2 0 0 0
0.00 100.00 100.00 0.00 0.00 0.00
0.00 0.89 0.67 0.00 0.00 0.00
Total 76 224 300 1.00 99.00 100.00
25.33 74.67 100.00 100.00 100.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

Table 4.67 occupation wise access to PMJDY account.14.29 percent Self

Employed (Non-Agriculture), 27.12 percent Casual Labour, 35.71 Salaried (Pri-
vate). Therefore, we find occupation is not having any significant role in the case of
slums and beggars.
Table 4.68 shows income-wise access to PMJDY among Slums and Beggars is as
follows. The annual income categories as (10,000–20,000) has 14.29 percent
(41,000–60,000) has 12.12 percent (61,000–100,000) has 30.86 percent and
(100,001 above) 31.75 percent. This shows that income is a reason for opening a
bank account especially for poor people like slums and beggars.
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars 95

Table 4.68 Tabulation of income of the respondent PMJDY account

PMJDY account PMJDY account
Income of the respondent Slums Beggars
Yes No Total Yes No Total
10,000–20,000 3 18 21 0 68 68
14.29 85.71 100.00 0.00 100.00 100.00
3.95 8.04 7.00 0.00 68.69 68.00
21,000–40,000 0 6 6 0 7 7
0.00 100.00 100.00 0.00 100.00 100.00
0.00 2.68 2.00 0.00 7.07 7.00
41,000–60,000 8 58 66 1 23 24
12.12 87.88 100.00 4.17 95.83 100.00
10.53 25.89 22.00 100.00 23.23 24.00
61,000–100,000 25 56 81 0 0 0
30.86 69.14 100.00 0.00 0.00 0.00
32.89 25.00 27.00 0.00 0.00 0.00
100,001 above 40 86 126 0 1 1
31.75 68.25 100.00 0.00 100.00 100.00
52.63 38.39 42.00 0.00 1.01 1.00
Total 76 224 300 1 99 100
25.33 74.67 100.00 1.00 99.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

4.7.1 Hypothesis Testing

Chi Square test has been used for hyptohesis testing. This test is mostly used for
categorical variables, to check there is any asscoiation or not? The formal for the test
is as follows. The Greek word chi is used in symbolic terms as “χ2”.

X ðO  EÞ2
χ2 ¼ ð4:1Þ
E

Where,
O ¼ the Observed (actual) value
E ¼ the Expected value.
Chi Square test takes four steps: (1) state the hypotheses, (2) Formulate an Analysis
Plan, (3) Analyse Sample Data, and (4) Interpret results.
1. State the Hypotheses: In first step, we simply formulate Hypothesis Ho and Hi.
2. Formulate an Analysis Plan: In step two, we formulate the level of significance,
(Like 0.01, 0.05, 0.10) etc. For our analysis, we chose 0.05 significance level.
3. Analyse Sample Data: In step third, we analyse the data and conducted
Chi-square test. We compute degree of Freedom by which we determine the
P-Value. The Degree of freedom is estimated by, Df ¼ (r  1)  (c  1). Df refers
96 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

to Degree of freedom, (r  1) is number of rows minus 1 and (c  1) is number of

columns minus 1. The P-value is probability value.
4. Interpret results: In fourth, step we interpret the results. In Conclusion we
interpret that if P-value is less than the significance level (0.05), we reject the
null Hypothesis. Thus, we conclude that there is a relationship between variables.
We have test Eight Hypothesis (8) to find the association of various socio-economic
variables, which are playing an important role in the determination of Financial
Inclusion. Bank Account is considered as the sole genesis of Financial inclusion.
Therefore, we have checked our hypothesis to determine the factors which are
playing a vital role in opening a bank account. The variables which are determining
financial Access, are Gender, Age, Education, Income, Occupation, Documentation,
Economic Status and Financial Awareness.
1. Hypotheses (Table 4.69)
H0: There is significant relationship between Opening Bank account and Edu-
cation of the people.
H1: There is no relationship in opening Bank account and education of the
people.

The chi square result shows the P-value is 0.024 which is less than 0.05% level of
significance. Which means we reject the null hypothesis that There is no relationship
between Opening Bank account and Education of the people.
2. Hypotheses (Table 4.70)
H0: there is no relationship between opening a Bank account and the occupation
of the people.
H1: there is a significant relationship between Opening a Bank account and
occupation of the people.

Table 4.69 Tabulation of PMJDY account education of the respondent

PMJDY
account Education of the respondent
Upper
primary Graduate
Primary (VI– Secondary and
Illiterate up V VIII) (IX–X) Senior Diploma above Total
Yes 43 11 8 9 2 1 2 76
0.4 0.1 1.9 10.9
No 92 50 40 10 10 4 18 224
0.1 0.0 0.6 3.7
Total 135 61 48 19 12 5 20 300
0.5 0.1 2.5 14.6
Pearson chi2(6) ¼ 14.5721 Pr ¼ 0.024 Table value/critical value 26.296
Table 4.70 Tabulation of PMJDY account occupation of the respondent
PMJDY
account Occupation of the respondent
Self employed Agricultural Self employed Casual Salaried Housewife/
(agriculture) laborer (non-agriculture) laborer (private) homemaker Others Total
Yes 0 1 5 64 5 1 0 76
0.6 0.5 0.5 4.0
No 2 2 29 173 9 7 2 224
0.2 0.2 0.2 1.4
Total 2 3 34 237 14 8 2 300
0.8 0.7 0.7 5.3
Pearson chi2(6) ¼ 5.3327 Pr ¼ 0.502 Table value/Critical Value 26.296
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars
97
98 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.71 Tabulation of PMJDY Account Income of the respondent

PMJDY
account Income of the respondent in rupees
10,000– 21,000– 41,000– 61,000– 100,001
20,000 40,000 60,000 100,000 Above Total
Yes 3 0 8 25 40 76
1.2 1.5 4.8 1.0 2.2 10.4
No 19 6 58 56 85 224
0.4 0.5 1.5 0.3 0.7 3.5
Total 2214.0 6 66 81 125 300
1.6 2.0 6.1 1.3 2.9 14.0
Pearson chi2(4) ¼ 13.9647 Pr ¼ 0.007 Table value/ Critical Value 23.685

Table 4.72 Tabulation of PMJDY account Gender of respondent

PMJDY account gender of
Male Female Total
respondent
Yes 45 31 76
0.7 1.5 2.3
No 157 67 224
0.3 0.5 0.8
Total 202 98 300
1.0 2.1 3.1
Pearson chi2(1) ¼ 3.0533 Pr ¼ 0.081 Table value/ Critical
Value 19.667

In our second Hypothesis, The P-Value is 0.502 at 6 degrees of freedom which is

higher than 0.05 level of significance. Therefore, we conclude that we accept the null
hypothesis that there is not a positive relation between opening a bank account and
occupation of the slums.
3. Hypotheses (Table 4.71)
H0: there is no relationship in opening Bank account and income of the people.
H1: there is significant relationship between Opening Bank account and income
of the people.

The P-value (0.007) which is less than (0.05%) level of significance, we reject
null hypothesis and accept alternative hypothesis and concludes that opening bank
account and income of a person among slums are not independent. Income plays
positive role in determining bank account.
4. Hypotheses (Table 4.72)
H0: there is significant relationship between Opening Bank account and Gender
of the people.
H1: there is no relationship in opening Bank account and Gender of the people.
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars 99

Table 4.73 Tabulation of PMJDY account and age

PMJDY account Age of the respondent
Adult population Old age
Young age (18–30 years) (31–50 years) (51–75 years) Total
Yes 17 47 12 76
1.8 2.4 0.6 4.8
No 76 101 47 224
0.6 0.8 0.2 1.6
Total 93 148 59 300
2.4 3.2 0.8 6.5
Pearson chi2(2) ¼ 6.4526 Pr ¼ 0.040 Table Value/Critical Value 21.026

Table 4.74 Tabulation of PMJDY account economic status

PMJDY account Economic status
BPL APL RED Card No Ration Card Total
Yes 62 11 1 2 76
1.0 4.2 0.1 4.4 9.8
No 153 69 2 0 224
0.4 1.4 0.0 1.5 3.3
Total 215 80 3 2 300
1.4 5.7 0.1 5.9 13.1
Pearson chi2(3) ¼ 13.0663 Pr ¼ 0.004 Table value/ Critical Value 22.362

Hence, the P-value (0.081) which is greater than (0.05%) level of significance, we
accept null hypothesis and there is significant relationship between Opening Bank
account and Gender of the people.
5. Hypotheses (Table 4.73)
H0: there is significant relationship between Opening Bank account and Age of
the people.
H1: there is no relationship in opening Bank account and Age of the people.

The P-value (0.040) which is less than (0.05%) level of significance, we reject
null hypothesis and concludes there is no relationship in opening Bank account and
Age of the people.
6. Hypotheses (Table 4.74)
H0: there is no relationship in opening Bank account and economic Status of the
people.
H1: there is significant relationship between Opening Bank account and eco-
nomic status of the people.
100 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

Table 4.75 Tabulation of PMJDY account PMJDY awareness

PMJDY account PMJDY
Yes No Total
awareness
Yes 76 0 76
16.5 28.1 44.6
No 113 111 224
5.6 9.5 15.1
Total 189 111 300
22.1 37.7 59.8
Pearson chi2(1) ¼ 59.7789 Pr ¼ 0.000 Table value/Critical
Value 19.675

The P-value (0.004) which is less than (0.05%) level of significance, we reject
null hypothesis and accept alternative hypothesis and concludes that opening bank
account and Economic Status of a person among slums are not independent.
Economic status is playing vital role in opening a bank account.
7. Hypotheses (Table 4.75)
H0: there is no relationship in opening Bank account and Awareness of Banking
the people.
H1: there is significant relationship between Opening Bank account and Aware-
ness of Banking of the people.

The P-value (0.000) which is less than critical value (0.05%) level of significance,
we reject null hypothesis and accept alternative hypothesis and concludes that
opening bank account and PMJDY Awareness of a person among slums are not
independent. PMJDY Awareness is playing vital role in opening a bank account.
8. Hypotheses (Table 4.76)
H0: there is no relationship in opening Bank account and Documents the people.
H1: there is significant relationship between Opening Bank account and Docu-
ments of the people.

The P-value 0.001 which is less than (0.05%) level significance, we reject null
hypothesis and accept alternative hypothesis and concludes that opening bank
account and Documents of a person among slums are not independent. Documents
is playing vital role in opening a bank account (Table 4.77).
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars 101

Table 4.76 Tabulation of PMJDY account and documents

PMJDY
account Documents
Voter Voter ID and Voter-ID, Aadhar and Pan
None Id Aadhar card Total
Yes 0 10 41 25 76
2.0 0.3 1.9 7.2 11.5
No 8 23 160 33 224
0.7 0.1 0.7 2.5 3.9
Total 8 33 201 58 300
2.7 0.4 2.6 9.7 15.4
Pearson chi2(3) ¼ 15.4160 Pr ¼ 0.001 Table value/Critical Value 22.362

Table 4.77 Description of the study variables

Variable Description
Access Bank account {1 ¼ persons having bank account, 0 ¼ otherwise}
Gender 1 ¼ male, 0 ¼ female
Education 1 ¼ illiterate, 0 ¼ literate
Occupation 1 ¼ casual labour, 0 ¼ others
Income 1 ¼ higher income, 0 ¼ lower income
Caste 1 ¼ lower caste, 0 ¼ upper caste
Documents 1 ¼ no documents, 0 ¼ possessing documents
Age 1 ¼ young age, 0 ¼ adult

4.7.2 Binary Logistic Regression Model

The Econometric Model Specification

Y i ¼ β 0  X i þ Ei ð4:2Þ

Yi = is the dependent Variable (Access). This is a dichotomous variable 1 ¼ access

and 0 ¼ no access
β0 ¼ is the vector of explanatory variables.
Xi ¼ is the associated vector of parameter to be estimated and
Ei ¼ error Term.
The following equations of Binary Logistic Regression model are

P
logit ðpÞ ¼ ¼ β0 þ β1  X1 þ β2  X2 þ β3  X3 þ ⋯ þ βk  Xk ð4:3Þ
ð1  PÞ
102 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

P
logit ðpÞ ¼ ¼ β0 þ β1  Gender þ β2  Education þ β3  Ocupptation
ð 1  PÞ
þβ4  Income þ β5  Caste þ β6  Documents þ β7  Age
ð4:4Þ

In our study we have used a dependent variable Bank account, to check the
probability of having banking access among Slum Dwellers in Lucknow and
Kolkata. Our dependent variable is dichotomous {1 ¼ owning bank account and
0 ¼ not having bank account}. We have used Binary Logistic Regression Model to
investigate the determining factors responsible for banking access. From the litera-
ture, we found demographical variables are playing important role in banking access.
Studies have also discovered that documents are also playing a key role in having
access. so, the bases we have developed our econometric model to analyse the role of
these variables in the access patterns. All the explanatory variables are dichotomous
which are gender, education, occupation, income, caste, documents, and age
(Table 4.78).
The Binary Logistic Regression Model, we have calculated Odds Ratio by the
help of Stata 14 software. We have used the command logistic for Odds Ratio
Results and We used logit command to calculate coefficients. We have interpreted
our results on the bases of the Odds Ratio. Therefore, the results of our model are as
follows.
In case of Gender {1 ¼ male, and 0 ¼ female}, as per Odds ratio in respect to our
reference category males have 27 percent less chances as compared to males in
opening a bank account. However, it has been found statistically insignificant at 0.05
percent level of significance. Similarly, in the case of Education {0 ¼ Illiterate and
1 ¼ Literate} we have taken Illiterate as the reference category, the odds ratio shows
that there are 43.82 percent less chances as compared to literates to open a bank
account; However, it is statistically significant at 0.05 percent level of significance.
Occupation {1 ¼ Others and 0 ¼ Casual Labour}, Casual Labour taken as reference
category there is negative 65.56 percent for other occupations to open a bank account
in respect to casual labour, however, it is statistically insignificant at 0.05 percent
level of significance. Income {1 ¼ Higher income, 0 ¼ Lower income} Lower-
income as reference category there are 69.37 percent less chances for Lower-income
groups with respect to higher income groups in case of Slums, however, results are
statistically significant at 0.01 percent level of significance. Caste {1 ¼ Upper caste
and 0 ¼ Lower Caste}, lower caste taken as reference category they have better
position in comparison to general caste people as the odd ration is more than one. So,
under PMJDY scheme lower caste has more chances with respect upper caste groups
in opening a bank account which is statically significant at 10 percent level of
significance. Documents {0 ¼ No Documents and 1 ¼ Having Documents} No
documents as a reference Category shows that there is 63.44 percent less chances for
4.7 Determining Factors of Financial Access among Slum Dwellers and Beggars 103

Table 4.78 Results of logistic regression

Odds [95%
PMJDY Account Coef. Ratio St. Err. t-value p-value Conf Interval] Sig
Gender 0.721 .7214226 0.231 1.02 0.307 0.386 1.350
{1 ¼ male}
{0 ¼ female}
Education 0.562 .5617716 0.163 1.99 0.047 0.318 0.992 **
{1 ¼ illiterate}
{0 ¼ literate}
Occupation 1.626 1.625635 0.872 0.91 0.365 0.568 4.650
{1 ¼ casual
labour}
{0 ¼ others}
Income 0.306 .3062647 0.112 3.24 0.001 0.150 0.627 ***
{1 ¼ higher
income}
{0 ¼ lower
income}
Caste 1.948 1.948417 0.744 1.75 0.081 0.922 4.117 *
{0 ¼ lower
caste}
{1 ¼ upper
caste}
Documents 0.366 .3655414 0.123 2.99 0.003 0.189 0.707 ***
{1 ¼ no docu-
ments}
{0 ¼ possessing
documents}
Age 0.620 .6196885 0.208 1.43 0.153 0.321 1.195
{1 ¼ young age}
{0 ¼ adult}
Constant 1.084 1.187319 0.542 0.16 0.871 0.407 2.887
Mean dependent var 0.253 SD dependent var 0.436
Pseudo r-squared 0.110 Number of obs 300.000
Chi-square 33.035 Prob > chi2 0.000
Akaike crit. (AIC) 318.096 Bayesian crit. (BIC) 347.726
Standard errors in parentheses
***p < 0.01, **p < 0.05, *p < 0.1

opening a bank account to the people who doesn’t have documents and it statistically
significant at 0.01 percent level of significance. Age {1 ¼ young age and 0 ¼ Adults}
adults as a reference category shows that there is 38.03 percent less chances for
young population to open a bank account in comparison to the old population. But
this is statistically insignificant. The chi square hypothesis test results are same to the
binary logistic regression Model.
104 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

4.8 Findings

More male participants are engaged in begging from Lucknow, and females from
Kolkata. The Lucknow beggars are distributed almost equally among all social
categories. But, in Kolkata there is a huge gap of participation between categories
like ST and General, huge number of participants are from SC and OBC populations.
Beggars are more illiterate in Kolkata. There is a heavy income difference in
Lucknow among low-level income beggars and high-income beggars but In Kolkata,
the income difference is less, Beggars from Kolkata are engaged in other economic
activities too.
The Kolkata beggars are rich than Lucknow beggars because of a greater number
of working days per month. Beggars from Kolkata are working hard by utilizing
more time on begging than Lucknow. Working hours is also positively related to
income of the respondents, a greater number of working hours can generate more
income, we find Kolkata beggars are in better position to Lucknow beggars. More-
over, we find that beggars from Kolkata are earning more in comparison to Lucknow
beggars. Beggars are facing the harsh living conditions in both cities they are almost
equally living with the worst housing conditions. In Lucknow none of the beggar’s
avail electricity facility while in Kolkata 2 percent of Beggars are using electricity.
The sanitation facility is better in Kolkata as compared to Lucknow because more
people from Lucknow are going open fields for toilet purposes. Second more people
are participants of commonly shared public toilets in Lucknow than Kolkata. All
beggars are doing begging because they are forced to beg to feed their families.
In case of Slums in both the cities male respondents are larger than female, but if
we look with in females in both cities, we find more females from Lucknow in
comparison to Kolkata. Similarly, in case of male’s reverse is the case. The lower
caste groups have more participation from Lucknow while in Kolkata general caste
people are living in slums with bigger numbers than other lower caste groups. The
highest number of illiterates are from Lucknow, second highest number of educated
people are from Kolkata. Kolkata slums are better than Lucknow. In case of Kolkata
the slums are taking part more or less in all the three Category workings days.
Another important finding is those who are working from (1 to 5 hours) per day may
be earning more with in short duration of timing, either they may be working in
different occupations in a day, and the people who are working more than 11 hours
may be extreme poor. Kolkata slums have good housing conditions in comparison to
Lucknow slums. we find Lucknow slums are more dependent on public taps to get
water were Kolkata slums are enjoying these facilities at home. The availability of
electricity for Kolkata slums are better than Lucknow slums.
Slums in Lucknow are more dependent on firewood for cooking. Lucknow slums
are also lacking toilet facility available to them that is why they are going open fields
but the condition of slums in Kolkata is much better because 99 percent people have
toilets available in their homes. The problem of disability is more found among
slums in Kolkata than Lucknow.
4.8 Findings 105

The access of banking services availed by Slum Dwellers are below 4 percent.
The important digital services (Internet Banking, Remittances, Mobile Banking,
Direct Benefit Transfer, etc) provided by banks. None of these services has been
availed by Slums Dwellers in both of the regions. The reasons for not availing
remittance are people don’t have enough money, lack of knowledge to use remit-
tance facility and high cost, and other reasons.
In case of saving account, people are not willing to open bank account due to lack
of money or income. The BC model is not feasible for these sections. The bigger
reason for not availing BCs services because they are not aware, nor they have
knowledge of BCs. Slums have been excluded from formal banking system. They
are fulfilling their credit needs informally. The reasons are poor people don’t have
income and essential documents to use these services. For the rest of the insurance
products, people are not aware of it. Holdings and transactions are faraway questions
because these people neither hold any insurance products. So, the factors responsible
are supply oriented like people are unaware about banking products, unsuitable and
costly products, bigger problem is they are financially illiterate. From demand side
they lack money and documents to avail such services. Therefore, it seems financial
services are not demand oriented. Employees provident fund is not demand oriented
as people in slums are mostly unemployed and their informal jobs are not encour-
aged by supply base products, 97 percent don’t have the necessary documents to
open a bank account.
None of the beggars has availed of any banking service from the formal banking
system in Lucknow and Kolkata. Reasons for not Availing any Remittance facility
from the bank is because people don’t have enough money and people don’t have
knowledge about banking remittance. The reasons for not availing credit from banks
is due to the following reasons, don’t need credit, doesn’t have knowledge how to
get it, claimed banking procedures are difficult to understand, don’t have essential
documents and, beggars have other reasons etc.
Beggars have not access to the essential documents. Both slums are beggars
didn’t access the following services under PMJDY Overdraft Facility, Access to
Insurance, Personal Accidental Insurance. Slums and beggars are largely excluded
from the MUDRA scheme. They are unaware, they are lacking essential documents
and the products are not suitable for them Both the populations don’t access this
scheme because of numerous reasons like, they don’t have money, they are not
aware and lack of documents are the reasons for not having access to PMJJBY
Access to PMSBY and APY. In the case of beggars both the schemes are insignif-
icant, they are unaware and don’t have any access while in case of slums less people
are aware of the scheme and more than 99 percent don’t have access. Females have
more access than males, it is because poor women are working and the main target of
PMJDY was to provide access to at least one woman per household.
The hypothetical results show that Education has a significant relation in opening
a bank account occupation is not having any significant role in the case of slums and
beggars. Income is a reason for opening a bank account especially for poor people
like slums and beggars There is no relationship between Opening Bank account and
Education of the people. There is not a positive relation between opening a bank
106 4 Socio-Economic Conditions and Pattern of Access and Non-Access in. . .

account and occupation of the slums. Opening bank account and income of a person
among slums are not independent. Income plays positive role in determining bank
account. There is significant relationship between Opening Bank account and
Gender of the people. There is no relationship in opening Bank account and Age
of the people. Opening bank account and Economic Status of a person among slums
are not independent. Economic status is playing vital role in opening a bank account.
Opening bank account and PMJDY Awareness of a person among slums are not
independent. PMJDY Awareness is playing vital role in opening a bank account.
Opening bank account and Documents of a person among slums are not indepen-
dent. Documents are playing vital role in opening a bank account.

4.9 Conclusion

Our study was focused on identifying the access and non-access pattern of Slum
Dwellers and Beggars in Lucknow and Kolkata. Previous studies have identified
responsible factors which are determining Financial Access of the people. These
factors are varied from region to region but are unanimously same everywhere.
Therefore, in this study, we have analysed demographic as well as other important
associated variables which are playing important role in financial access. Our study
has been divided into major four parts. The First Part discusses socio economic
conditions of slums and Beggars. The second part puts lights on access and
non-access pattern of Financial products and services. Part third explores, pattern
of access and non-access with reference to socio economic factors. From all the four
sections, we find Lucknow slums as well as beggars are in worst condition in
comparison to Kolkata.
The objective of this chapter was to study the access and non-access pattern of
recent financial inclusion schemes to the poorest of the poor. From the statistical
analysis, it is found the null hypothesis have been accepted that Due to lack of
awareness and problems of illiteracy the population of poorest of the poor have very
limited access to recent financial inclusion schemes.

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Chapter 5
Financial Inclusion Schemes and Changing
Socio Economic Status of Poorest
of the Poor

5.1 Introduction

The socio-economic conditions are the very basis of human development. The socio-
economic status (SES) of the destitute is very worse in our country. The poorest of
the poor are facing challenges in every walk of life like the problems of sanitation,
health, poverty, and unemployment. Their social, as well as economic status, is a
question mark for all policymakers who are drafting policies in the name of poverty,
employment. Standard of living, drinking water facility, electricity, and food secu-
rity. These people are dying several times a day because of harsh weather conditions
(Hot and cool Weather). On the contrary, they are facing problems to take part in
institutional services like health services, education, banking services, and so
on. The trauma of destitute to live life is documented by the constitution under
various articles like the right to life, which has remained in files in the name of
policies and schemes only. The performance of public policies is very much worse
According to then prime minister of India Rajiv Gandhi Ji, the only 15 paisa is
reaching to a downtrodden people from every one rupee. These remarks given by a
prime minister describes why poverty still existence’s in India? From 1947 till date
the life of the poor becoming bitter day by day.
Therefore, the present study will look into the socio-economic conditions of two
destitute populations Slum Dwellers and Beggars Lucknow and Kolkata. The main
objective of this chapter to explore the changes in socio-economic conditions of
poorest of the poor due to recent financial inclusion schemes, which are PMJDY,
MUDRA, PMSBY, PMSSBY, and APY. our hypothesis in this context is that there
is not any significant change taken place in socio-economic conditions of poorest of
the poor after implementation of recent financial inclusion schemes.
This chapter has been divided in to eight sections. Section 5.2 Living Status of
Slums in Lucknow and Kolkata, Sect. 5.3 Flow chart of Hypothesis: Banking access
and Socio-Economic Status of slums in Lucknow and Kolkata, Sect. 5.4 Socio-
Economic Status: Variables of the study, Sect. 5.5 Socio-Economic Index, Sect. 5.6

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 109
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_5
110 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

Regression Model (I), Sect. 5.7 Financial Inclusion and Financial Literacy, Sect. 5.8
Regression Model (II), Sect. 5.9 Findings of the Chapter, and Sect. 5.10 Conclusion.

5.2 Living Status of Slums in Lucknow and Kolkata

Table 5.1 shows access wise type of house among slums in Lucknow and Kolkata. The
access pattern of slums is 33.79 percent lives in Hut and no access people are 66.21
percent, the access of Semi Pucca households are 16.64 percent and non-access holders
are 83.46 percent and 22.73 percent in Pucca houses. The access of households living in
Pucca houses are 22.73 percent and no access holders are 77.27 percent respectively.
So, we find non-access has a negative role on housing conditions of the people living in
slums, because most of them are living in hunts and semi pucca houses.
Table 5.2 PMJDY access wise availability of drinking water facility among slums
from Lucknow and Kolkata 37.14 percent and the non- access holders are 62.86

Table 5.1 Tabulation of PMJDY account Type of house

PMJDY account type of house
Hut Semi pucca Pucca Total
Yes 49 22 5 76
64.47 28.95 6.58 100.00
33.79 16.54 22.73 25.33
No 96 111 17 224
42.86 49.55 7.59 100.00
66.21 83.46 77.27 74.67
Total 145 133 22 300
48.33 44.33 7.33 100.00
100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and
third row has column percentages

Table 5.2 Tabulation of PMJDY account drinking water facility

PMJDY account Drinking water facility
Tap in the house Common tap Total
Yes 26 50 76
34.21 65.79 100.00
37.14 21.74 25.33
No 44 180 224
19.64 80.36 100.00
62.86 78.26 74.67
Total 70 230 300
23.33 76.67 100.00
100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages
5.2 Living Status of Slums in Lucknow and Kolkata 111

percent. The access of PMJDY account 21.74 percent have Tap in the House and the
non-access 78.26 percent Therefore, those who have access to PMJDY account are
better than non-access people.
Table 5.3 shows the access of PMJDY Account and utilization of electricity. The
access of PMJDY account 16.17 percent have Electricity. The non-access of
PMJDY account 83.83 percent have electricity. The access of PMJDY account
36.84 percent are missing access to electricity. The non-access of PMJDY account
63.16 percent doesn’t have access to electricity. So, we find very few people have
access to PMJDY and electricity which means people are lacking the benefits of
financial access.
Table 5.4 the access of PMJDY account and type of fuel utilization among slums
in Lucknow and Kolkata. Access of PMJDY account 15.04 percent are using
LPG/Gas for cooking. The non-access of PMJDY account holders but are using
LPG/Gas for cooking are 84.96 percent people. Again, the access of PMJDY
account 13.64 percent people are using Kerosene for cooking and the non -access
users are 86.36 percent. Similarly, the access of PMJDY account 37.06 percent are

Table 5.3 Tabulation of PMJDY account Do you have electricity

PMJDY account do you have
Yes No Total
electricity
Yes 27 49 76
35.53 64.47 100.00
16.17 36.84 25.33
No 140 84 224
62.50 37.50 100.00
83.83 63.16 74.67
Total 167 133 300
55.67 44.33 100.00
100.00 100.00 100.00
First row has frequencies; second row has row percentages and
third row has column percentages

Table 5.4 Tabulation of PMJDY account type of fuel

PMJDY account Type of fuel
LPG/gas Kerosene Firewood Total
Yes 17 6 53 76
22.37 7.89 69.74 100.00
15.04 13.64 37.06 25.33
No 96 38 90 224
42.86 16.96 40.18 100.00
84.96 86.36 62.94 74.67
Total 113 44 143 300
37.67 14.67 47.67 100.00
100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages
112 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

Table 5.5 Tabulation of PMJDY account type of toilet facility (sanitation)

PMJDY
account Type of toilet facility
Private (in your own Common (shared by Open
house) others) fields Others Total
Yes 22 30 23 1 76
28.95 39.47 30.26 1.32 100.00
18.03 23.81 45.10 100.00 25.33
No 100 96 28 0 224
44.64 42.86 12.50 0.00 100.00
81.97 76.19 54.90 0.00 74.67
Total 122 126 51 1 300
40.67 42.00 17.00 0.33 100.00
100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

using firewood. The non-access of PMJDY account are 62.94 percent are using
firewood for cooking. So, most of the slums are lacking the benefits of LPG subsidy
which is provided only who have bank access.
Table 5.5 PMJDY account and type of Sanitation used by slums in Lucknow and
Kolkata. The Banking access of 18.03 percent have privately owned toilet facility
and the non-access users are 81.97 percent but has toilet available in their home.
PMJDY access of 23.81 percent are using common shared toilet with others and
76.19 percent people are without access are also sharing commonly shared toilets.
The access of 45.10 percent people is going for Open Fields and the non-access
holders from the same category are 54.90 percent. The access of 1.32 percent is from
others category. Therefore, most people are lacking financial access as well as access
to home-based toilets.
Table 5.6 shows PMJDY Account access and person with disabilities, the access
of 19.05 percent is disable and the non-access of 80.95 percent are disable. The
persons with access 26.36 percent are disable and 73.64 percent people who have
neither access and are not disable. So, in conclusion the disable people are also
lacking to get disable pension benefits because of no access, which non-access is
affecting them.
Table 5.7 shows banking access and economic status of the respondents from
Slums is as follows from BPL 28.84 percent have access, and the non-access holders
are 71.16 percent. The access of PMJDY account among APL families is 13.75
percent and the non-access holders are 86.25 percent. Access of RED CARD holders
are 33.33 percent and non-access ones are 66.67 percent respectively. Similarly, the
access of PMJDY account from no ration card holders is 100 percent. If we look the
direct benefits given to people are through bank account which is missing almost
more than 80 percent people among slums. So, in case of slums very less people have
access but the non-access is also visible by the reason of low economic status. The
most non-access people belong to BPL and RED CARD categories.
5.2 Living Status of Slums in Lucknow and Kolkata 113

Table 5.6 Tabulation of PMJDY account Persons with disability

PMJDY ACCOUNT persons
Yes No Total
with disability
Yes 8 68 76
10.53 89.47 100.00
19.05 26.36 25.33
No 34 190 224
15.18 84.82 100.00
80.95 73.64 74.67
Total 42 258 300
14.00 86.00 100.00
100.00 100.00 100.00
First row has frequencies; second row has row percentages and
third row has column percentages

Table 5.7 Tabulation of PMJDY account economic status

PMJDY account Economic status
BPL APL RED CARD No ration card Total
Yes 62 11 1 2 76
81.58 14.47 1.32 2.63 100.00
28.84 13.75 33.33 100.00 25.33
No 153 69 2 0 224
68.30 30.80 0.89 0.00 100.00
71.16 86.25 66.67 0.00 74.67
Total 215 80 3 2 300
71.67 26.67 1.00 0.67 100.00
100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

Table 5.8 Tabulation of PMJDY account assets of the household

PMJDY account Assets of the household
Car Scooter Cycles None of the above Total
Yes 1 6 19 50 76
1.32 7.89 25.00 65.79 100.00
100.00 37.50 22.09 25.38 25.33
No 0 10 67 147 224
0.00 4.46 29.91 65.63 100.00
0.00 62.50 77.91 74.62 74.67
Total 1 16 86 197 300
0.33 5.33 28.67 65.67 100.00
100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

Table 5.8 PMJDY Account access and Assets of the Household are, as follows
1.32 percent who have a car has access too, similarly scooter 7.89 percent, cycles
25 percent and people who don’t have any assets have 65.79 percent banking access
114 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

via PMJDY account. Therefore, in case of assets we again find people with low
quality of assets are among largely found among non-access holders.

5.3 Flow Chart of Hypothesis: Banking Access

and Socio-Economic Status of Slums in Lucknow
and Kolkata

General Hypothesis There is not any significant change taken place in socio
economic conditions of poorest of the poor after implementation of recent financial
inclusion schemes (Fig. 5.1).

H1: Bank account plays a significant role on Education

H0: Bank account is not playing significant role on education
Table 5.9 shows PMJDY and education are associated with each other which means
having a bank account has more chance to have better education. Therefore, the
(P value ¼ 0.024), which is less than 0.05 percent level of significance. So, we reject
the null hypothesis and accept the alternative hypothesis that Bank account is not
playing significant role on education in case of slums in Lucknow and Kolkata.
H1: Bank account plays a significant role on Occupation.
H0: Bank account has no role on Occupation.
Table 5.10 shows chi square results of PMJDY and occupation. Therefore, the P
value is (0.502), which is greater than 0.05 percent level of significance therefore we
accept null hypothesis that Bank account plays a significant role on Occupation in
case of slums in both Lucknow and Kolkata.
H1: Banking Access Plays a significant role in Income
H0: Bank account has no role in income
Table 5.11 shows the association of PMJDY Account and Income of the respon-
dent among slums in Lucknow and Kolkata. The P value is 0.007 which less than
0.05 percent level of significance. Therefore, we reject the Null hypothesis and
accept the alternative hypothesis which shows bank account has no role in income
among slums.
H1: Bank account plays a significant impact on Type of House
H0: Bank account gas insignificant impact on Type of House
Table 5.12 shows the banking access and type of house among slums in Lucknow
and Kolkata. The P value is 0.004 which is less than 0.05 percent level of signifi-
cance, therefore we reject the null hypothesis and accepts alternative hypothesis that
Bank account gas insignificant impact on Type of House.
Fig. 5.1 Flow chart of
hypothesis Educaon
Pr = 0.024

Occupaon
Pr = 0.502

Income
Pr = 0.007

Type of the House

Pr = 0.004

Drinking Water
Facility
Pr = 0.009

PMJDY Account Electricity

Pr = 0.000

Type of Fuel
Pr = 0.000

Toilet Facility
Pr = 0.001

Persons with
Disability
Pr = 0.312

Economic Status
Pr = 0.004

Assets of the
Household
Pr = 0.197

Table 5.9 Tabulation of PMJDY account education of the respondent

PMJDY
account Education of the respondent
Upper Graduate
Primary Primary Secondary and
Illiterate up V (VI–VIII) (IX–X) Senior Diploma above Total
Yes 43 11 8 9 2 1 2 76
2.3 1.3 1.4 3.6 0.4 0.1 1.9 10.9
No 92 50 40 10 10 4 18 224
0.8 0.4 0.5 1.2 0.1 0.0 0.6 3.7
Total 135 61 48 19 12 5 20 300
3.0 1.7 1.9 4.9 0.5 0.1 2.5 14.6
Pearson chi2(6) ¼ 14.5721 Pr ¼ 0.024 Table value/Critical Value 12.59
 116

Table 5.10 Tabulation of PMJDY account occupation of the respondent

PMJDY
account Occupation of the respondent
Self employed Agricultural Self employed Casual Salaried Housewife/
(agriculture) labourer (non-agriculture) labourer private homemaker Others Total
Yes 0 1 5 64 5 1 0 76
0.5 0.1 1.5 0.3 0.6 0.5 0.5 4.0
No 2 2 29 173 9 7 2 224
0.2 0.0 0.5 0.1 0.2 0.2 0.2 1.4
Total 2 3 34 237 14 8 2 300
0.7 0.1 20. 0.3 0.8 0.7 0.7 503
Pearson Chi2(6) ¼ 5.3327 Pr ¼ 0.502 Table Value/ Critical Value 12.59
5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .
5.3 Flow Chart of Hypothesis: Banking Access and Socio-Economic Status. . . 117

Table 5.11 Tabulation of PMJDY account income of the respondent

PMJDY
account Income of the respondent
10,000– 21,000– 41,000– 61,000– 100,001
20,000 40,000 60,000 100,000 above Total
Yes 3 0 8 25 40 76
1.3 1.5 4.5 1.0 2.2 10.4
No 19 6 58 56 85 224
0.4 0.5 1.5 0.3 0.7 3.5
Total 22 6 66 81 125 300
1.6 2.0 6.1 1.3 2.9 14.0
Pearson Chi2(4) ¼ 13.9647 Pr ¼ 0.007 Table Value / Critical Value 9.48

Table 5.12 Tabulation of PMJDY account Type of the house

PMJDY account type of the
Hut Semi Pucca Pucca Total
house
Yes 49 22 5 76
4.1 4.1 0.1 8.2
No 96 111 17 224
1.4 1.4 0.0 2.8
Total 145 133 22 300
5.5 5.4 0.1 11.0
Pearson Chi2(2) ¼ 11.0002 Pr ¼ 0.004 Table Value/ Critical
Value 5.99

Table 5.13 Tabulation of PMJDY account Drinking water facility

PMJDY account drinking
Tap in the house Common tap Total
water facility
Yes 26 50 76
3.9 1.2 5.0
No 44 180 224
1.3 0.4 10.7
Total 70 230 300
5.2 1.6 6.7
Pearson Chi2(1) ¼ 6.7319 Pr ¼ 0.009 Table Value/ Critical
Value 3.84

H1: Banking access and Availability of drinking water facilities are associated with
each other.
H0: Banking access and Availability Drinking water facility are indifferent to each
other
Table 5.13 shows the Banking access and drinking water facility among slums in
Lucknow and Kolkata. The P value is 0.009 which is less than 0.05 percent level of
significance therefore, we reject the null hypothesis and accept the alternative
hypothesis that Banking access and Availability Drinking water facility are indif-
ferent to each other.
118 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

H1: Banking access and Availability Electricity facilities are associated with each
other.
H0: Banking access and Availability of Electricity facility are indifferent to each
other
Table 5.14 shows Banking access and availability of Electricity facility. The P value
is 0.000 which is less than 0.05 percent level of significance. Therefore, we reject the
Null hypothesis and accepts the alternative hypothesis that Banking access and
Availability of Electricity facility are indifferent to each other.
H1: Banking access and Type of Fuel are associated with each other.
H0: Banking access and Type of Fuel are indifferent each other
Table 5.15 shows Banking access and type of fuel utilization. The P value is 0.000
which is less than 0.05 percent level of significance. Therefore, we reject the Null
hypothesis and accepts the alternative that Banking access and Type of Fuel are
indifferent each other.
H1: Banking access and Type of Toilet Facility are associated with each other
H0: Banking access and Type of Toilet Facility are indifferent to each other
Table 5.16 shows Banking access and type of Toilet Facility the P value is 0.001
which is less than 0.05 percent level of significance. Therefore, we reject the Null
hypothesis and accepts the alternative Hypothesis that Banking access and Type of
Toilet Facility are indifferent to each other.

Table 5.14 Tabulation of PMJDY account Do you have electricity

PMJDY account do you have
Yes No Total
electricity
Yes 27 49 76
5.5 7.0 12.5
No 140 84 224
1.9 2.4 4.2
Total 167 133 300
7.4 9.3 16.7
Pearson Chi2(1) ¼ 16.7300 Pr ¼ 0.000 Table Value/ Critical
Value 3.84

Table 5.15 Tabulation of PMJDY account Type of fuel

PMJDY Account Type
LPG/Gas Kerosene Firewood Total
of Fuel
Yes 17 6 53 76
4.7 2.4 7.8 14.9
No 96 38 90 224
1.6 0.8 2.6 5.0
Total 113 44 143 300
6.3 3.2 10.4 19.9
Pearson Chi2(2) ¼ 19.9081 Pr ¼ 0.000 Table Value/ Critical
Value 5.99
5.3 Flow Chart of Hypothesis: Banking Access and Socio-Economic Status. . . 119

Table 5.16 Tabulation of PMJDY account type of toilet facility

PMJDY
account Type of toilet facility
Private (in your own Common (shared by Open
house) others) fields Others Total
Yes 22 30 23 1 76
2.6 0.1 7.9 2.2 12.7
No 100 96 28 0 224
0.9 0.0 2.7 0.7 4.3
Total 122 126 51 1 300
3.4 0.2 10.5 2.9 17.1
Pearson Chi2(3) ¼ 17.0721 Pr ¼ 0.001 Table Value/ Critical Value 7.81

Table 5.17 Tabulation of PMJDY account Persons with disability

PMJDY account persons with
Yes No Total
disability
Yes 8 68 76
0.7 0.1 0.8
No 34 190 224
0.2 0.0 0.3
Total 42 258 300
0.9 0.1 1.0
Pearson chi2(1) ¼ 1.0201 Pr ¼ 0.312 table value/ Critical Value
3.84

Table 5.18 Tabulation of PMJDY account economic status

PMJDY account Economic status
BPL APL RED Card No Ration Card Total
Yes 62 11 1 2 76
1.0 4.2 0.1 4.4 9.8
No 153 69 2 0 224
0.4 1.4 0.0 1.5 3.3
Total 215 80 3 2 300
1.4 5.7 0.1 5.9 13.1
Pearson Chi2(3) ¼ 13.0663 Pr ¼ 0.004 Table Value/ Critical Value 7.81

H1: Banking access and Persons with Disability are associated with each other.
H0: Banking access and Persons with Disability are indifferent to each other
Table 5.17 shows Banking access and Persons with Disability. The P value is
0.312 which is greater than 0.05 percent level of significance. Therefore, we accept
the Null hypothesis and accepts, that Banking access and Persons with Disability are
associated with each other.
H1: Banking access and Economic Status are associated with each other.
H0: Banking access and Economic Status are indifferent each other
Table 5.18 shows Banking access and Economic Status. The P value is 0.004
which is less than 0.05 percent level of significance therefore, we reject the null
120 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

hypothesis and accept alternative the hypothesis that Banking access and Economic
Status are indifferent each other.
H1: Banking access and Assets of the House Hold are associated with each other.
H0: Banking access and Assets of the Household is indifferent each other
Table 5.19 shows Banking access and Assets of the House Hold. The P value is
0.197 which is greater than 0.05 percent level of significance therefore, we accept the
null hypothesis and that Banking access and Assets of the House Hold are associated
with each other.

5.4 Socio Economic Status (Table 5.20)

Table 5.19 Tabulation of PMJDY account assets of the house hold

PMJDY account Assets of the house hold
Car Scooter Cycles None of the above Total
Yes 1 6 19 50 76
2.2 0.9 0.4 0.0 3.5
No 0 10 67 147 224
0.7 0.3 0.1 0.0 1.2
Total 1 16 86 197 300
2.9 1.3 0.5 0.0 4.7
Pearson Chi2(3) ¼ 4.6771 Pr ¼ 0.197 Table Value/ Critical Value 7.81

Table 5.20 Socio economic status: variables of the study

S.no Category Name of variables
1 Social & economic 1. Education,
2. Income,
2 Physical working conditions 3. Frequency of work/regularly/irregular
4. Number of working days,
5. Number of working hours
3 Housing conditions 6. Type of house,
7. Drinking water facility,
8. Electricity facility,
9. Sanitation,
10. Type of fuel used for cooking
4 Health 11. Persons with disabilities
5 Wealth 12. Assets in the house hold
5.6 Regression Model (I) 121

5.5 Socio Economic Index

The Socio-economic variables (See Appendix Table) has a detailed description. We

have calculated the Socio-economic index by calculating the Maximum and Mini-
mum values. The total number of variables is 13 and the values range from 1 to
7. Value 1 “represents the lowest rank or worst condition and the Upper value
represents the better position” every variable has its own range lowest means
worst and highest means better. Therefore, we represent all variables by . . . . Where


SES ¼ xn1 , xn2 , . . . :xn300 ð5:1Þ

 Actual Value  Minimum Value
SES xn1 , xn2 , . . . :xn300 ¼ ð5:2Þ
Maximum Value  Minimum Value

Where
SES ¼ socio economic status.
Actual Value of Variable ¼ xn1 . . . xn300
Minimum Value Variable ¼ xn1 . . . xn300
Maximum Value Variable ¼ xn1 . . . xn300
Finally, we have calculated the “Socio Economic Index”, by taking average of
all calculated “Socio economic Status” SES variables. Which is as follows

X13
x1 þ x2 þ . . . x13
Ᾱ¼ ð5:3Þ
ij
N

where
‘Ᾱ’ refers to Average,
“∑” refers to summation of x1 + x2 . . . x13 and
“N” Number of Total Variables

5.6 Regression Model (I)

Mathematical Equation

SEI ¼ F ðBanking AccessÞ ð5:4Þ

Where,
SEI refers to socio economic index, and Banking Access refers to {PMJDY
Account ¼ 1 Having a Bank Account, 2 ¼ Not having PMJDY Account}.
122 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

Regression Equation

Yi ¼ β0 þ β1X þ ei ð5:5Þ

Where
Yi ¼ SEI (Socio Economic Index),
β0 ¼ Intercept,
β1 ¼ Banking Access refers {1 ¼ Having a Bank Account, 2 ¼ Not having PMJDY
Account}.
From the below regression table, the description of model are 300 observations of
slums, only 25.33%, people have PMJDY bank account and 74.67% don’t have a
PMJDY account. The output results of the regression model show that there are
0.555 units of improvement in the socio-economic index due to Banking access of a
household. While opening a PMJDY Account in every household there will be
chances of 0.0612 units of change in their socio-economic index. Therefore, we
conclude that banking access has a significantly positive impact on the socio-
economic index of the slums in Lucknow and Kolkata. Now the question arises
how come a bank account can decide the betterment of socio-economic conditions?
The reason for having better socio-economic status may be people who have a bank
account are earning handsome income, having a good occupation, good education,
etc. (Table 5.21).

5.7 Financial Inclusion and Financial Literacy

The Ph.D. field survey presents the financial inclusion status of slums dwellers and
Beggars in Lucknow and Kolkata. Which captures 300 respondents of slums and
100 respondents of beggars. The recent initiatives of Government for the promotion
of Financial Inclusion are such as Jan-Dhan, PM Suraksha and Jeevan Jyoti Bima
Yojana, and Atal Pension Yojana, etc. The survey covers two urban cities of
Lucknow and Kolkata. The respondents have been asked a total of 155 questions

Table 5.21 Regression (1)

model
Variables SEI
PMJDY account [having PMJDY account] 0.0612***
(0.0173)
Constant 0.555***
(0.00871)
Observations 300
R-squared 0.040
Standard errors in parentheses
*** p < 0.01, ** p < 0.05, * p < 0.1
5.7 Financial Inclusion and Financial Literacy 123

that explore financial inclusion, financial literacy and demographic attributes of the
houses holds.

5.7.1 Financial Attitude Index

In order to capture the financial attitude of respondents, the survey questionnaire

asks three questions inviting Likert responses. The detailed wording and responses
of questions are in Appendix Table. The attitude questions are framed as positive
statements defining the financial attitude of respondents. As a result, a respondent
can choose an integer score between 1 to 5 that depicts his agreement with the
statement of the questions. Therefore, the average of responses in three questions
shows the extent of conformity with a strong financial attitude.

5.7.2 Index Construction Methodology

We have followed Banerjee et al. (2016, 2017) for the index construction method-
ology for financial attitude, behaviour, and knowledge.
In order to capture the financial attitude of respondents, the survey questionnaire
asks three questions inviting Likert responses. The detailed wording and responses
of questions are in Appendix Table. The attitude questions are framed as positive
statements defining the financial attitude of respondents. As a result, a respondent
can choose an integer score between 1 and 5 that depicts his agreement with the
statement of the questions. Therefore, the average of responses in three questions
shows the extent of conformity with a strong financial attitude.

 1
G ¼ an1 , an2 , an3 ¼ P3 ¼ 1, 2, . . . . . . , N: ð5:6Þ
1þ i¼1 exp ðcxani Þ

Furthermore, bxani is the probability inverse of ai in marginal distribution Gi.

Employing the fact that marginal distribution of a logistic distribution is also a
logistic distribution, therefore bxani in Eq. 5.6 is the logistic inverse of empirical
probability
!
1 X
N
bxani ¼ G1
i 1 ¼ xk n
i <¼ ai Where, xk
i Eð1, 2, . . . :5Þ8i ¼ 1, 2, . . . , N:
N K¼1

where, Gi follows a univariate standard logistic distribution.

Financial behaviour indexing order to capture the financial behaviour of respon-
dents, the survey questions the respondents on 11 behavioural aspects. The detailed
wording of the questions and responses can be seen in Appendix Table. The survey
124 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

questions on behaviour can be divided into four categories on the nature of responses
to the questions. We construct the index for each category and report their mean as
financial behaviour index. We describe the categorization of questions and the nature
of their responses below:
1. Category (I): In category (I), we cover questions 1 to 4 from Table A2. In these
four questions, the survey tests the budget discipline and financial planning for
household expenses. In each of these questions, the respondent has the option to
choose one right option from multiple responses. It is worth to mention that only
one response out of multiple responses adhere to sound financial behaviour
therefore the respondent gets a positive score only if he chooses the right option.
2. Category (II): The sixth question in Table A2 captures the household behavior of
seeking advice. The question lists nine major advice source sand ask the respon-
dent to choose the top three sources of financial advice for their financial decision
making.
3. Category (III): The seventh question in Table A2 report the financial investment
behavior of respondents. The question offers ten financial investment products
and ask the respondents if they have invested in the listed products?
4. Category (IV): In category (IV), we cover questions 8–11 of Table A2. In this
category, the survey invites Likert responses to positively framed behavioral
statements. So, the extent of agreement with positively framed statements
shows the extent of prudence in financial behavior. Further, we consider each
category of behavioral question at a time and construct the index for each of these
categories. The index construction within these categories require the transfor-
mation of responses of each question to a score. The score of each question
further gets consolidated into the index. In the following section, we detail the
methodology for constructing the index for each category.

5.7.3 Index Construction: Category (I)

The questions 1–4 in Table A2 form Category (I) questions of the behavioral
questionnaire. Each of these questions has a different number of responses that we
consolidate into to dichotomous response for index construction. We present the
method to convert these multiple i responses into the dichotomous response for each
of these five questions. Further, we denote the dichotomous response as bn for the
question i and respondent n.1. 1. Maintains a household budget (b1n: This question
1 in Table A2 asks the respondent if he maintains a household budget? Further, the
response options for this question is “yes” or “no”. Therefore, the respondent who
maintains a household budget shows conformity with prudent financial behavior and
gets a positive score. In other words, if a respondent answers this question in “yes”
gets a score of 1 and 0 otherwise. 2. Budget ownership: This question 2 in Table A2
check the participation of respondents in the money management of the family. The
involvement of a respondent in budget planning shows adherence to strong financial
behavior. Therefore, the respondent who is completely or partially responsible for
5.7 Financial Inclusion and Financial Literacy 125

the financial budget of the household gets a score of 1 and 0 otherwise. 3. Financial
resilience Question 3 in TableA2 evaluates the resilience to the short-term liquidity
problem. The respondents who have not faced a liquidity crisis in the last 12 months
shows a healthy spending habits and planning. Hence, they get a score of 1 for
answering “No” and 0 otherwise. 4. Borrowing to make ends meet ( ): The question
4 in Table A2 asks respondents to choose a source of finance out of eight options to
mitigate their short-term credit problem. Therefore, the respondent who has not
faced any credit crisis or those who worked to mitigate the crisis gets a score 1 while
the rest of the respondents get 0. Adopting the above methodology, we transform the
responses of the first four questions of the financial behavior survey into dichoto-
mous responses. The financial behavior index for a respondent n in this category.

 1X n
4
H bn1 , bn2 , . . . :bn4 ¼  b log ðbpqÞ, where, bnq 2 ð0, 1Þ, 8n 2 N ð5:7Þ
4 q¼1 q

where, ðbpqÞ, is the sample probability of getting question q right

1 X n
N
ðbpqÞ ¼ b
N q¼1 q


Finally, we normalize the score H bn1 , bn2 , . . . :bn4 calculated in Eq. 5.7 to derive
Financial behaviour index Hnorm, for this category.

 H  min ðH Þ
H norm bn1 , bn2 , . . . :bn4 ¼ ð5:8Þ
max ðH Þ  min ðH Þ

5.7.4 Financial Knowledge Index

In order to capture the financial knowledge of respondents, the survey questionnaire

asks eight questions addressing numeracy and basic financial understanding of
respondents. The detailed wording of the question and responses can be found in
Appendix Table. The financial knowledge questions have multiple responses with
only one correct response in each of the eight questions. We again convert the
answer of respondents into a binary response. For each of the right response, the
respondent gets score 1 and 0 otherwise.
Applying the same methodology as in Financial Behaviour the Financial knowl-
edge score of the respondent n with response set (gn1, gn2, gn2, ... gn6, ) is
126 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

 1 X6 n
H gn1 , gn2 , . . . :gn6 ¼  g log ðb
q¼1 q
pqÞ, where, gnq 2 ð0, 1Þ, 8n 2 N ð5:9Þ
6


Finally, we normalize the score H bn1 , bn2 , . . . :bn6 in Eq. (5.9) to derive the financial
Knowledge index Hnorm.

 H  min ðH Þ
H norm gn1 , gn2 , . . . :gn6 ¼ ð5:10Þ
max ðH Þ  min ðH Þ

5.7.5 Consolidated Financial Literacy Index

The financial literacy index is overall performance of respondents on three facets of

literacy attributes namely attitude, behaviour and knowledge. Employing the finan-
cial attitude, behaviour and knowledge index from Eqs. 5.6, 5.8 and 5.10, the
financial literacy index for a respondent n with response
(an, bn, gn) is

1

FL ¼ ðan , bn , gn Þ ¼ Gðan Þ þ H normðbn Þ þ H ðnormðgn Þ ð5:11Þ
3

5.8 Regression Model (II)

Mathematical Equation

SEI ¼ F ðFI Þ ð5:12Þ

Where
SEI refers to Socio Economic Index
FI refers to Financial Inclusion Index

Regression Equation

Yi ¼ β0 þ β1X þ ei

Where
Yi ¼ Socio Economic Index,
β0 ¼ Intercept
β1X1 ¼ FI (Financial Inclusion Index)
5.9 Findings of the Chapter 127

the output results of our regression model are showing that (intercept) financial
inclusion in Aggregate terms is highly significant to enhance the socio-economic
Index of slums. But the value of (β1 Xi) is insignificant and negative, which means
the opening of each new account under PMJDY Account there would be nega-
tive ¼ 0.0317 percent chance of SEI. The logical reason behind this incredible
result is that opening a bank account alone can’t be considered Financial Inclusion.
Financial inclusion in the name of a bunch of collective Banking services which are
Financial Literacy, savings, credit, Insurance, and of ine and online services like use
of ATM (Credit, Debit) cards, etc. therefore opening a Bank account alone can’t help
people to get any benefit unless and until they access other banking services which
can make their life easy and get a chance to develop their standard of living by
utilizing their limited income, wealth, and assets in a secured and sustainable way.

(1)
Variable SEI
FI 0.0317
(0.0749)
Constant 0.592***
(0.0520)
Observations 300
R-squared 0.001
Standard errors in parentheses
*** p < 0.01, ** p < 0.05, *
p < 0.1

5.9 Findings of the Chapter

Non-access has a negative role on housing conditions of the people living in slums,
because most of them are living in hunts and semi pucca houses. Those who have
access to PMJDY account are better than non-access people. Moreover, few people
have access to PMJDY and electricity. Most of the slums are lacking the benefits of
LPG subsidy which is provided only who have bank access. People are lacking
financial access as well as access to home-based toilets. The disable people are also
lacking access to get disable pension benefits. In case of slums, the non-access is also
visible by the reasons of low economic status. The most non-access people belong to
BPL and RED CARD categories. People with low quality of assets are largely found
among non-access holders.
From hypothesis results we find Education is playing insignificant role in opening
a bank account in case of slums in Lucknow and Kolkata. Occupation plays
significant role in determining the banking access in case of slums in both Lucknow
128 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

and Kolkata. Income plays an insignificant role in opening Bank account among
slums. Type of House is insignificant in determining to open a bank account.
Banking access and availability of drinking water facility are indifferent to each
other. Banking access and Availability of Electricity facility are indifferent to each
other. Banking access and Type of Fuel are indifferent each other. Banking access
and Type of Toilet Facility are indifferent to each other. Banking access and Persons
with Disability are associated with each other. Banking access and Economic Status
are indifferent each other. Banking access and Assets of the House Hold are
associated with each other.
While opening a PMJDY Account in every household there will be chances of
0.0612 units of change in their socio-economic index. Further, we constructed an
index on socio-economic conditions of slums namely socio-economic index to check
the impact of recent financial inclusion schemes on SES of slums, for this we run a
regression model to check how PMJDY Account in uences SEI, the results of the
model are significant at a 0.1% level of significance, which claims that there is a
positive impact of recent financial inclusion schemes on socioeconomic status of
slums in Lucknow and Kolkata. Lastly, we have again constructed an index on
financial inclusion to check the awareness, attitude and knowledge among slums.
And again, we cross-checked with another regression model to check How SEI is
in uenced by FI, where we find results which are totally opposite to our first
regression model. So, we conclude that banking access in the form of bank account
is not a complete tool to impact on the socio-economic status of people.

5.10 Conclusion

In this chapter, we look at the Living Status and financial inclusion status of the
poorest of the poor in India. First, we have analysed demographic variables and their
relationship with financial inclusion schemes. Secondly, we have used the chi-square
test to check the hypothesis to know the statistical significance. We have also
developed indexes on social-economic status, financial inclusion index, and finan-
cial literacy, to draw the representative statistical inferences. We have also used twin
regression models to check how representative are financial inclusion schemes in the
development of socio-economic conditions. The objective of our study was to
explore the changes in socio-economic conditions of the poorest of the poor due to
recent financial inclusion schemes. Our hypothesis was that there is not any signif-
icant change taken place in the socio-economic conditions of the poorest of the poor
after the implementation of recent financial inclusion schemes. Finally, accept our
null hypothesis There is not any a significant change took place in socio-economic
conditions of the poorest of the poor after implementation of recent financial
inclusion schemes.
Appendix: Socio Economic Index 129

Appendix: Socio Economic Index

S. No Name of the variable Categories of the variable Coding

1 Education Illiterate 1
Primary 2
Upper primary 3
Secondary 4
Senior secondary 5
Diploma 6
Graduate 7
2 Income 10,000–20,000 1
21,000–40,000 2
41,000–60,000 3
61,000–10,0000 4
Above 100000 5
3 Number of working hours 1–5 1
6–10 2
11–15 3
4 Number of working days 1–10 1
11–20 2
21–30 3
5 Frequency of income Daily 1
Weekly 2
Monthly 3
6 Type of house Hut 1
Semi Pucca 2
Pucca 3
7 Drinking water facility Common tap 1
Tap in house 2
8 Electricity No 1
Yes 2
9 Type of fuel Fire wood 1
Kerosene 2
LPG/Gas 3
10 Toilet facility Open fields 1
Commonly shared 2
Private in house 3
11 Disability No 1
Yes 2
12 Economic status No card 1
Red Card 2
BPL 3
APL 4
(continued)
130 5 Financial Inclusion Schemes and Changing Socio Economic Status of Poorest. . .

S. No Name of the variable Categories of the variable Coding

13 Assets None 1
Cycle 2
Scooter 3
Car 4
Coding is arranged from worst to better off, i.e. 1 for worst and 5 for better

References

Banerjee, A., Kumar, K., & Philip, D. (2016). Financial literacy empowers financial inclusion.
Working paper, Durham University Business School.
Banerjee, A., Kumar, K., & Philip, D. (2017). Financial prudence: A tale of fragility alleviation.
Working paper, Durham University Business School.
Chapter 6
Impact of Recent Financial Inclusion
Schemes on Economic and Financial
Behavior of Poorest of the Poor

6.1 Introduction

How recent financial inclusion schemes have affected to economic and financial
behaviour of Slums and beggars in Lucknow and Kolkata? Previous studies have
shown increasing income and consumption are the bases of financial Inclusion. But
financial inclusion can affect household in many ways but researchers have explored
range of social and economic factors beyond income and consumption expenditure
which includes schooling, Nutrition, Fertility, Assets holding, risks, employment
and social awareness (Chen & Sebstad, 1996). Financial Inclusion means having
access to all Financial products and services which meets all related needs of
Banking like Savings, Credit, Insurance to be deliver in a responsible and sustainable
way (World Bank, 2017). In India Financial intermediaries have played a leading
role in in uencing its economic performance (Carbo et al., 2005). This chapter
analyses How recent Financial inclusion schemes have affected the economic and
financial needs of ultra-urban poor in Lucknow and Kolkata? Secondly, what is the
impact of recent financial inclusion schemes on economic and financial behaviour?
Therefore, this chapter has been designed as follows, Sect. 6.1. Introduction
which gives brief introduction about factors of financial inclusion explained by
various agencies and how financial inclusion is accepted one of the primary indica-
tors which have shown positive and significant relationship with growth and devel-
opment of the people. Moreover, Sect. 6.2 analyses the associations among Financial
Access and Income Pattern of Slum Dwellers in which we have analysed Income of
the slums, type of remuneration, Number of working Days and Number of working
hours to check the financial access and its relation with all such variables. Similarly,
Sect. 6.3 analyses the association of Financial Access and expenditure pattern of
slums. Again, Sect. 6.4 Income Expenditure Mismatch Among Slums Dwellers and
Beggars with respect to their access and non-access of financial institutions. In Sect.
6.5 we have analysed the impacts of Financial Access on Financial Behaviour of
Slum Dwellers.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 131
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_6
132 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

Finally, we have constructed a model in Sect. 6.6, Multivariate analysis of

Variance (MANOVA), which consider the variables financial access as independent
variable, and three dependent variables which are financial behaviour, annual
expenditure and annual income as dependent variable. The financial access variable
is a compiled variable constructed from group of variables as a proxy variable to
understand the patter of financial access among slums. The financial access variable
was constructed from various financial variables, the criteria of access and
non-access has been selected as, if a person have access of any one financial product
is considered as access and if a person have access to none of the financial products is
considered among non-access. The annual expenditure is also a complied variable
from a group of basic expenditures on daily routine things in a year. The financial
behaviour variable is actually an index used in chapter five. Finally, Sect. 6.7
presents the findings and conclusion of the chapter.

6.2 Financial Access and Income Pattern of Slum Dwellers

Table 6.1 shows financial Access and Income of the respondents. Financial access
shows the income group from (10,000 to 20,000) thousand rupees 59.09 percent are
without access and 40.91 percent have access. Again, the financial access shows the
income range of (20,001–40,000) thousand Rupees 16.67 percent have access and
83.33 percent are without access, moreover the financial access for the income group
of (40,001–60,000) thousand rupees, 22 percent have access while 81.82 percent
does not have any access. Similarly, financial access for the income group from
(60,001 to 100,000) thousand Rupees, 43.21 percent have access and 56.79 are
lacking access. The Financial access of the income group of (100,001–Above) 40.80
percent are having access and 59.20 percent don’t have any access. In aggregate

Table 6.1 Tabulation of financial access and annual income of the respondent
Financial 10,000– 20,001– 40,001– 60,001– 100,001
access 20,000 40,000 60,000 100,000 Above Total
0 13 5 54 46 74 192
6.77 2.60 28.13 23.96 38.54 100.00
59.09 83.33 81.82 56.79 59.20 64.00
1 9 1 12 35 51 108
8.33 0.93 11.11 32.41 47.22 100.00
40.91 16.67 18.18 43.21 40.80 36.00
Total 22 6 66 81 125 300
7.33 2.00 22.00 27.00 41.67 100.00
100.00 100.00 100.00 100.00 100.00 100.00
Chi square Pearson chi2(4) ¼ 13.3757 Pr ¼ 0.010
test
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total
6.2 Financial Access and Income Pattern of Slum Dwellers 133

terms the access level of the respondents from the sample of 300 respondent’s the
financial access shows a significant impact on income which means more the access
better are the chances to have high income. It has been found that those who have
financial access, 36 percent are having Financial access belongs to higher income
groups, but 64 percent respondents are lacking the financial access maximum of
them have better annual income. Financial access is considered one of the respon-
sible factors which determines income of the People (Olaniyi & Adeoye, 2016).
Moreover, it is also believed as financial access increases income, and there is a
positive and significant impact on the increase of income (Beck & de la Torre, 2006;
Chithra & Selvam, 2013).
H0: There exists a positive relation between Financial Access and Income
H1: There is not Existing any relationship between Financial access and income of
Slum Dwellers
The P value is (0.010) which is less than 0.05 percent level of significance.
Therefore, we reject null hypothesis and accept alternative hypothesis, there is not
existing any relationship between financial access and income of Slum Dwellers.
Table 6.2 Shows Financial Access and Nature of Remuneration among Slums. In
group of daily remuneration, 56 percent people are without access and 44 percent
have the access. Financial access and Weekly Remuneration 5.26 percent are having
access and 94.74 percent are without access. Financial Access and Irregular Remu-
nerations 37 percent have access and 62.91 percent didn’t have access. Similarly, the
Financial access and other types of Remunerations showed 100 percent financial
access etc. Therefore, the common understanding about types of remuneration, it is
believed that the best type of remuneration is Monthly income followed by Weekly
and Daily Incomes etc. because it shows the consistency of work and nature of
payments are related each other. Continuous availability of work offers Monthly
payments and short duration of work demands weekly and daily payments. If we

Table 6.2 Tabulation of financial access and nature of remuneration among slums
Financial access Frequency of the income of the respondent
Daily Weekly Monthly Irregular Others Total
0 56 36 5 95 0 192
29.17 18.75 2.60 49.48 0.00 100.00
56.00 94.74 50.00 62.91 0.00 64.00
1 44 2 5 56 1 108
40.74 1.85 4.63 51.85 0.93 100.00
44.00 5.26 50.00 37.09 100.00 36.00
Total 100 38 10 151 1 300
33.33 12.67 3.33 50.33 0.33 100.00
100.00 100.00 100.00 100.00 100.00 100.00
Chi square test Pearson chi2(4) ¼ 21.0654 Pr ¼ 0.000
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total
134 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

look at financial access it shows 64 percent population have no access and only
36 percent people have financial access. Now question arises what is the overall
status of these 36 percent who have access. Most of them lie under daily earners
44 percent and 50 percent among monthly earners. Which means that the financial
access holders are better than non-financial access holders if we comparison them on
frequency bases, but in general we can conclude that financial access is not showing
any significant improved in the income of slum dwellers.
H0: There exists a positive Relationship between Financial Access and Type of
Remuneration
H1: Financial Access and Type of Remuneration are Indifferent
The p value is 0.000 which is less than 0.05 percent level of significance. Therefore,
we reject null Hypothesis and accept alternative Hypothesis and declares that
Financial Access and Type of Remuneration are Indifferent.
Table 6.3 Shows Financial Access and Number of Working Days per Month
among Slums. looking financial access and non-access, working Days have been
divided in to three parts, Financial access and working days per month from (1–10)
days 6.25 percent have access and 93.75 are without access. The financial access
status of second category from (11–20 days) per month shows 14.06 percent have
access and 85.94 percent have no access. Similarly, the Financial access of third
category from (21–30 days) in which 44.55 percent have access and 55.45 percent
don’t have access. So, financial access re ects that better financial access people are
attending a greater number of working days in compare to non-access holders
(Table 6.3).
H0: Financial Access is playing significant role on Working days.
H1: Financial Access and Number of working days is indifferent

Table 6.3 Tabulation of financial access and number of working days per month
Financial access Number of working days per Month
1–10 11–20 21–30 Total
0 15 55 122 192
7.81 28.65 63.54 100.00
93.75 85.94 55.45 64.00
1 1 9 98 108
0.93 8.33 90.74 100.00
6.25 14.06 44.55 36.00
Total 16 64 220 300
5.33 21.33 73.33 100.00
100.00 100.00 100.00 100.00
Chi square test Pearson chi2(2) ¼ 26.4873 Pr ¼ 0.000 Table value 9.21
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total
6.3 Financial Access and Expenditure Pattern of Slums 135

Table 6.4 Tabulation of financial access number of working hours per day
Number of working hours
Financial access 1–5 6–10 11–15 Total
0 10 164 18 192
5.21 85.42 9.38 100.00
83.33 62.12 75.00 64.00
1 2 100 6 108
1.85 92.59 5.56 100.00
16.67 37.88 25.00 36.00
Total 12 264 24 300
4.00 88.00 8.00 100.00
100.00 100.00 100.00 100.00
Chi square test Pearson chi2(2) ¼ 3.6116 Pr ¼ 0.164 Table 13.816
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total

The p value 0.00 which is less than 0.05 percent level of significance, therefore, we
reject null hypothesis and accept alternative hypothesis that Financial Access and
Number of working days is indifferent.
Table 6.4 Shows Financial Access and Number of Working Hours per Day
attended by the respondents. From the sample of 300 respondents, the Financial
access of attending working Hours (1–5) per day 16.61 percent have access and
83.33 percent doesn’t have access. Similarly, the financial access for attending the
working Hours from (6–10) in a day 37.88 have access of percent and 62.12 percent
does not have access. The financial access of attending (11–15) working Hours per
day have 25 percent access and 75 percent does not have access. Those who have
access are working mostly in normal working hours from 6–10 hours per day and
very less people are working in excess working hours as compared to non-access
people. Therefore, we can conclude financial access holders are in better position in
compared to non-access holders with respect to number of working hours.
H0: Financial Access and Number of working Hours per days are indifferent
H1: Financial Access is playing significant role on Number of working Hours per
days
The p value is 0.164 which is more than 0.05 level of significance. Therefore, we
accept our Null Hypothesis, which means that Financial Access are totally indiffer-
ent in explaining the number of working hours.

6.3 Financial Access and Expenditure Pattern of Slums

In This section we are discussing about Financial Access and Expenditure Pattern of
Slums and Beggars. To explore is there any impact of Financial access on Expen-
diture Pattern of these two Urban poor groups. Table 6.5 Financial Access and
136 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

Table 6.5 Tabulation of financial access and annual expenditure of slums

Annual expenditure in rupees
Financial 30,000– 50,001– 100,001– 150,001– 200,001– 250,001–
access 50,000 100,000 150,000 200,000 250,000 300,000 Total
0 16 62 81 23 0 10 192
8.33 32.29 42.19 11.98 0.00 5.21 100.00
66.67 56.36 66.94 69.70 0.00 90.91 64.00
1 8 48 40 10 1 1 108
7.41 44.44 37.04 9.26 0.93 0.93 100.00
33.33 43.64 33.06 30.30 100.00 9.09 36.00
Total 24 110 121 33 1 11 300
8.00 36.67 40.33 11.00 0.33 3.67 100.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00
First row has frequencies; second row has row percentages and third row has column percentages

Annual Expenditure of Slums, 33.33 percent have access and 66.67 percent people
are without access belongs to the expenditure category from 30,000 to 50,000
rupees. The access of 43.64 percent and non-access of 56.36 percent are making
the annual expenditure of 50,001 to 1,00,000 rupees. Similarly, the access of 33.06
percent and non-access of 66.94 percent belongs the expenditure category of
1,00,001 to 1,50,000 rupees. Moreover, the access of 30.30 percent and
non-access of 69.70 percent are from the expenditure level of 1,50,001 to 2,00,000
rupees.
The financial access of the expenditure category of 2,00,001 to 2,50,000 rupees
only 1 person out of 300 hundred respondents have access which become 100 percent
access in column percentages. The financial access of 9.09 people has access and
90.91 percent has no access are from 2,50,001 to 3,00,000 rupees. So, we found the
financial access among all expenditure categories is 36 percent and 64 percent have
no access. Moreover, we find people who have financial access are doing more
expenditures.

6.4 Income Expenditure Mismatch Among Slums Dwellers

and Beggars

Table 6.6 Shows us the picture of average annual Income of Slums which is 91,488
rupees among 300 respondents. The Minimum Income is found 14,400 Rupees
annually and Maximum Income 288,000 rupees. The Average annual expenditure
among slums is 114,550 rupees with standard deviation 51,621 which shows the
expenditure remains constant throughout a year. The annual minimum expenditure is
30,000 rupees and the maximum annual expenditure is 3,00,000 rupees.
We have calculated net income mismatch of slums; the calculations have been
done by calculating the annual average Income and Expenditure of the 300 respon-
dents. The below given Eq. (6.1) have been used the check the net income mismatch
6.4 Income Expenditure Mismatch Among Slums Dwellers and Beggars 137

Table 6.6 Income expenditure mismatch among slum dwellers

Variable Obs Mean Std. dev. Min Max
Annual income 300 91,488 49520.740 14,400 288,000
Annual expenditure 300 114,550 51621.350 30,000 300,000
Source: Estimated from field data
Note: Figure in parenthesis are percentage of total

Table 6.7 Income expenditure mismatch among access and non- access of slum dwellers
Variable Obs Mean Std. dev. Min Max
Access and income 108 86933.33 39321.65 28,800 288,000
NON-access and income 192 94,050 54354.64 14,400 288,000
Access and annual expenditure 108 107824.1 42427.91 40,000 300,000
NON-access and annual expenditure 192 118333.3 55884.92 30,000 300,000
Pearson chi2(17) ¼ 28.4287 Pr ¼ 0.040
Pearson chi2(22) ¼ 30.8843 Pr ¼ 0.099

among slums by incorporating the value in Eq. (6.2). We find that there exists a gap
of 25.20 percent of income among slums to fulfil their daily based expenditures.
Therefore, we conclude that the economic conditions of slums are poor.


A1  A2
Net income mismatch gap of slum dwellers ¼  100 ð6:1Þ
A1

Where,
Ᾱ1 “refers to Average Annual income of Slum Dwellers”
Ᾱ2 “refers to Average Annual Expenditure of Slum Dwellers”

ð91, 488  114, 550Þ

Net income mismatch gap of slum dwellers ¼  100
91, 488 ð6:2Þ
¼ 25:2077

Table 6.7 Shows us the Net Income Mismatch Gap of Slum Dwellers (Access). The
access wise average annual Income of Slums which is 86,933.33 rupees among
108 respondents. The Minimum Income is found 28,800 Rupees annually and
Maximum Income 288,000 rupees. The Non-Access and Average income among
slum’s are 94,050 rupees. The annual minimum income is 14,400 rupees and the
maximum annual expenditure is 288,000 rupees.
The access and annual expenditure of Slum Dwellers (Access). The access wise
average annual expenditure of Slums is 107,824.1 rupees among 108 respondents.
The Minimum expenditure is found 40,000 Rupees annually and Maximum expen-
diture 300,000 rupees. The Non-Access and Average expenditure among slum’s are
118,333.3 rupees. The annual minimum expenditure is 30,000 rupees and the
maximum annual expenditure is 300,000 rupees.
138 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

We have calculated net income mismatch of slums who have access; the calcu-
lations have been done by calculating the annual average Income and Expenditure of
the 300 respondents. The below given Eq. (6.3) have been used the check the net
income mismatch among slums by incorporating the value in equation. We find that
there exists a gap of 24.03 percent of income among slums who have access to
fulfil their daily based expenditures.
Net income mismatch gap of slum dwellers (access)

ð86, 933:33  107, 824:1Þ

Net income mismatch gap of slum dwellers ðaccessÞ ¼  100
86, 933:33
¼ 24:0308
ð6:3Þ

The non-access holder’s net income mismatch is 25.81 percent shown in Eq. (6.4).
therefore, we conclude that the position of income mismatch among access holders is
less bad than non-access holders.
ð107, 824:1  118, 333:3Þ
Net income mismatch gap of slum dwellers ðnon‐accessÞ ¼  100
107824:1
¼ 25:8196
ð6:4Þ

Table 6.8 Shows Income Expenditure Mismatch among Beggars. The average
annual Income of Beggars is found 31,800 rupees. The minimum income of beggars
is 12,500 rupees and maximum income is 125,000 rupees. Similarly, we calculated
the net income expenditure mismatch among beggars from the Eq. (6.5), by incor-
porating the values of annual income and expenditure in Eq. (6.6). We find that there
exists a bigger income and expenditure gap of 38.77 percent. So, we conclude
Beggars are extremely excluded from the recent Financial Inclusion Schemes
(Table 6.9).


A1  A2
Income mismatch gap of beggars ¼  100 ð6:5Þ
A1

Where,
Ᾱ1 “refers to Average Annual income of Beggars”
Ᾱ2 “refers to Average Annual Expenditure of Beggars”

Table 6.8 Income expenditure mismatch among beggars

Variable Obs Mean Std. dev. Min Max
Annual income 100 31,800 19430.27 12,500 125,000
Annual expenditure 100 44,132 20923.19 20,000 130,000
Source: Estimated from field data
Note: Figure in parenthesis are percentage of total
6.4 Income Expenditure Mismatch Among Slums Dwellers and Beggars 139

Table 6.9 Income expenditure mismatch among access and non-access beggars
Variable Obs Mean Std. dev. Min Max
Access and income 1 25,000 0 12,500 125,000
Non-access and income 99 31,868.68 19,516.945 12,500 125,000
Access and annual expenditure 1 30,000 0 20,000 130,000
Non-access and annual expenditure 99 44274.747 20,980.668 20,000 130,000
Access and annual income Pearson chi2(10) ¼ 3.1987 Pr ¼ 0.976
Access and annual expenditure Pearson chi2(22) ¼ 5.7239 Pr ¼ 1.000

ð31, 800  44, 132Þ

Net income mismatch gap of beggars ¼  100
31, 800 ð6:6Þ
¼ 38:7799

Similarly, in case of access and non-access of beggars, we have first calculated net
income mismatch gap of access holders whose mean income 25,000 rupees and
annual expenditure mean is 30,000 rupees. All the values are calculated in Eq. (6.7)
and the result are that those beggars who have access have mismatch of 20 percent in
income to meet their expenditures.

ð25, 000  30, 000Þ

Net income mismatch gap of beggars ðaccessÞ ¼  100
25, 000
¼ 20
ð6:7Þ

Similarly, the beggars who are without access their mean income is 31,868.68 rupees
and annual mean expenditure is 4474.747 rupees. So, we find from both the Eqs. (6.7)
and (6.8) that access holders have less mismatch problem than non-access holders

ð31, 868:68  44, 274:747Þ

Net income mismatch gap of beggars ðnon‐accessÞ ¼  100
31, 868:68
¼ 38:9287
ð6:8Þ

The chi square test and the estimated hypothesis are as follows (Slums)
H0: Access and non-access explains the income position of the people.
H1: Access and non-access are indifferent on income
The P value is (Pr ¼ 1.000) which is more than 0.05 percent level of significance,
which means we accept the null hypothesis that Access and non-access explains the
income position of the people.
H0: Access and non-access plays significant role in expenditure
H1: Access and non-access plays insignificant role in expenditure determination.
The P value is (Pr ¼ 1.000) which is more than 0.05 percent level of significance,
which means we accept the null hypothesis that Access and non-access plays
significant role in expenditure.
140 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

6.5 Financial Access and Financial Behaviour of Slum

Dwellers

Table 6.10 shows Financial Access and Household Budget. The access of 33.33
percent, people have also household budget and 66.67 percent people have no access
nor have family budget.
Similarly, 36.14 percent have financial access but are lacking Family Budget. The
63.86 percent neither have financial access nor have family Budget. In aggregate
terms 36 percent have financial access 64 doesn’t have. Moreover, 5 percent have
household budget and 95 doesn’t have household budget. So, we can conclude only
5 percent people has access and family budget which means most of the people
didn’t follow household budget.
H0: Financial access is playing significant role in household budget.
H1: Financial Access has no role in household budget
The P value is (Pr 0.825) which is more than 0.05 percent level of significance which
means null hypothesis is accepted and financial access is playing significant role in
having a house hold budget.
Table 6.11 Shows Financial Access and budget responsible person in a family.
The responses given by the respondents are as follows. The financial access and the
family budget carried by the Owner of the family is 36.27 percent and 63.73 percent
does not have financial access but owners are responsible for family budget. The
financial access of the budget responsibility by the owner and his suppose 2 families
among 300 household respondents. Similarly, the budget carried other than owner’s
other family members have been found only one house hold among 300 households
and the families whose family budget is supported by others is again found a single
household from 300 households. Therefore, we found that most of the family are
managing their budget themselves.

Table 6.10 Tabulation of Do you have house budget

financial access, do you have
Financial access Yes No Total
house budget
0 10 182 192
5.21 94.79 100.00
66.67 63.86 64.00
1 5 103 108
4.63 95.37 100.00
33.33 36.14 36.00
Total 15 285 300
5.00 95.00 100.00
100.00 100.00 100.00
Pearson chi2(1) ¼ 0.0487 Pr ¼ 0.825
Source: Estimated from field data
First row has frequencies; second row has row percentages and
third row has column percentages
Note: Figure in parenthesis are percentage of total
6.5 Financial Access and Financial Behaviour of Slum Dwellers 141

Table 6.11 Tabulation of financial access, who is responsible for your house budget
Responsible house budget
Financial Owner of the Owner and his/her Owners Other family
access family spouse members Others Total
0 188 2 1 1 192
97.92 1.04 0.52 0.52 100.00
63.73 100.00 100.00 50.00 64.00
1 107 0 0 1 108
99.07 0.00 0.00 0.93 100.00
36.27 0.00 0.00 50.00 36.00
Total 295 2 1 2 300
98.33 0.67 0.33 0.67 100.00
100.00 100.00 100.00 100.00 100.00
Pearson chi2(3) ¼ 1.8671 Pr ¼ 0.600
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total

H0: Financial access is determined by person who is running the household budget
H1: Financial access and person responsible for household budget are indifferent
The P value is 0.600 which is greater than 0.05 percent level of significance, which
means we accept null hypothesis that Financial access is determined by person who
is running the household budget.
Table 6.12 Shows Financial Access and Problem of Shortage of Income in last
12 Months. Financial Access and shortage of Income during last 12 months are as
follows, People who have access and have faced the shortage of Income are 36.11
percent and 63.89 percent people neither have access and nor they face Income
shortage problem. Similarly, 33.33 percent have access and 66.67 percent neither
have access and nor face income shortage during the year.
H0: Financial access and non-access plays a significant role in determining the
income shortages
H1: Financial access and non-access are in significant in determining the income
shortages
The P value is 0.844 which is more than 0.05 percent level of significance, therefore
we are accepting null hypothesis that Financial access and non-access plays a
significant role in determining the income shortages.
Table 6.13 Shows financial access and how respondents have soughted the
problem. Those respondents who have access are 36.21 percent and 63.79 percent
does not have access but both have borrowed from family members and relatives.
Only 1 household have borrowed from employs and they don’t have access too. One
each household have borrowed from friends in which one have access and one
doesn’t have, similarly 28.57 percent who have access have borrowed from others
and 71.43 percent and no one have taken help from Banks. So, we find that mostly
142 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

Table 6.12 Tabulation of Shortage of income in last 12 months

financial access and shortage
Financial access Yes No Total
of income in last 12 months
0 184 8 192
95.83 4.17 100.00
63.89 66.67 64.00
1 104 4 108
96.30 3.70 100.00
36.11 33.33 36.00
Total 288 12 300
96.00 4.00 100.00
100.00 100.00 100.00
Pearson chi2(1) ¼ 0.0386 Pr ¼ 0.844
Source: Estimated from field data
First row has frequencies; second row has row percentages and
third row has column percentages
Note: Figure in parenthesis are percentage of total

Table 6.13 Tabulation of financial access and how you soughted problem
How you soughted problem
Financial Borrowed from family Borrowed
access member/relative from employer Friends Others Banks Total
0 185 1 1 5 0 192
96.35 0.52 0.52 2.60 0.00 100.00
63.79 100.00 50.00 71.43 0.00 64.00
1 105 0 1 2 0 108
97.22 0.00 0.93 1.85 0.00 100.00
36.21 0.00 50.00 28.57 0.00 36.00
Total 290 1 2 7 0 300
96.67 0.33 0.67 2.33 0.00 100.00
100.00 100.00 100.00 100.00 0.00 100.00
Pearson chi2(3) ¼ 0.9057 Pr ¼ 0.824
Source: Estimated from field data
First row has frequencies; second row has row percentages and third row has column percentages
Note: Figure in parenthesis are percentage of total

people are taking financial help from informal sources and are far away from formal
banking Institutions.
H0: Financial access plays a significant role on how you have soughted the problem?
H1: Financial access is indifferent in explaining, how you have soughted the
problem?
The P value is 0.824 which is more than 0.05 percent level of significance,
Therefore, we accept null hypothesis that Financial access plays a significant role
on how you have soughted the problem?
6.6 Description of MANOVA Model 143

6.6 Description of MANOVA Model

The variables used for Multivariate Analysis are Income, expenditure, and financial
behaviour as dependent variables and Financial access as independent variable.
Actually, financial behaviour variable is an index developed from five question
and is discussed in detail in chapter five. Financial access is also a variable developed
from various variables related to banking services. The criteria for formulation of
financial access was, if people in slums have access to any one of the banking
products will be considered among access holders which is actually not. But still
making it as a proxy variable, we find among 300 samples of slum only 108 people
have access 36 percent and 192 persons doesn’t have any access 64 percent.

6.6.1 Multivariate Analysis of Variance (MANOVA)

Multivariate analysis of variance (MANOVA) is simply an ANOVA with several

dependent variables. That is to say, ANOVA tests for the difference in means
between two or more groups, while MANOVA tests for the difference in two or
more vectors of means. This model is run to check is there any significant impact of
financial access with in two groups which are access and non-access. The three
dependent variables are financial behaviour, annual income, annual expenditure and
our independent variable is financial access which is categorical in nature {where,
1 ¼ access and 0 ¼ non-access}. our null hypothesis the hypothesis is that These
sections of population, those who have access of recent financial inclusion schemes
are now relying more on formal sources and institutions in comparison to those who
have not access of these schemes (Table 6.14).
Output contains the group means and standard deviations for each dependent
variable in turn, split by the independent variable Financial Access. The means show
that the Financial Behaviour is low among non-access (0.64) people in compare to
Access holders (0.65). which means those who are having Financial access.
Similarly, if we look financial access with respect Annual Income the access
holders mean value is (86933.333) and non-access holders have (94050). Here it
clearly shows that there is no effect of financial access on annual income of slum
dwellers. In case of Annual expenditure, the means of access (107824.074) and
non-access are (118333.333), again non-access holders have higher mean in com-
pare to access holders. Therefore, we can conclude that Financial access has partial
impact on financial behaviour and but not any significant impact on the improvement
of income and expenditure pattern of slum Dwellers (Table 6.15).
Output shows Box’s test of the assumption of equality of covariance matrices.
This statistic is significant, p ¼ 0.000 (which is less than .05), hence the covariance
matrices are different each other (Table 6.16).
144 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

Table 6.14 Descriptive statistics MANOVA

Financial access Mean Std. deviation N
Financial behaviour Non-access 0.648 0.159 192
Access 0.654 0.123 108
Total 0.650 0.147 300
Annual income Non-access 94,050.000 54,354.638 192
Access 86,933.333 39,321.649 108
Total 91,488.000 49,520.739 300
Annual expenditure Non-access 118,333.333 55,884.916 192
Access 107,824.074 42,427.911 108
Total 114,550.000 51,621.346 300

Table 6.15 Box’s test of Box’s M 32.526

equality of covariance
F 5.355
matricesa
df1 6
df2 325241.340
Sig. .000
Tests the null hypothesis that the observed covariance matrices of
the dependent variables are equal across groupsA
a
Design: Intercept + financial access

Table 6.16 Bartlett’s test of Likelihood ratio .000

sphericitya
Approx. Chi-square 8114.303
df 5
Sig. .000
Tests the null hypothesis that the residual covariance matrix is
proportional to an identity matrix
Note: Bartlett’s test of sphericity tests the hypothesis that your
correlation matrix is an identity matrix, which would indicate that
your variables are unrelated and therefore unsuitable for structure
detection. Small values (less than 0.05) of the significance level
indicate that a factor analysis may be useful with your data. Hence
our data variables are useful
a
Design: Intercept + financial access

Output shows the main table of results. The column of real interest is the all
containing the non-significance values of the F-ratios. For these data, Pillai’s trace
(p ¼ .060), Wilks’s lambda (p ¼ .060), Hotelling’s trace (p ¼ .060) and Roy’s
largest root (p ¼ .060) all are insignificant at (p > .05 level). Therefore, we can
conclude that the Financial Access intervention had an insignificant effect on
financial behaviour, income and expenditure of slums Dwellers (Table 6.17).
Output shows a summary table of Levene’s test of equality of variances for each
of the dependent variables. These tests are the same as would be found if a one-way
ANOVA had been conducted on each dependent variable in turn. Levene’s test
should be non-significant for all dependent variables if the assumption of
6.6 Description of MANOVA Model 145

Table 6.17 Multivariate testsa

Effect Value F Hypothesis df Error df Sig.
Intercept Pillai’s trace .962 2491.055b 3.000 296.000 .000
Wilks’ lambda .038 2491.055b 3.000 296.000 .000
Hotelling’s trace 25.247 2491.055b 3.000 296.000 .000
Roy’s largest root 25.247 2491.055b 3.000 296.000 .000
Financial access Pillai’s trace .025 2.495b 3.000 296.000 .060
Wilks’ lambda .975 2.495b 3.000 296.000 .060
Hotelling’s trace .025 2.495b 3.000 296.000 .060
Roy’s largest root .025 2.495b 3.000 296.000 .060
a
Design: Intercept + financial access
b
Exact statistic

Table 6.18 Levene’s test of F df1 df2 Sig.

equality of error variancesa
Financial behaviour .311 1 298 .577
Annual income 5.116 1 298 .024
Annual expenditure 5.443 1 298 .020
Tests the null hypothesis that the error variance of the dependent
variable is equal across groupsA
a
Design: intercept + financial access

homogeneity of variance has been met. We can see here that the assumption has been
met (p > .05 in all cases), which strengthens the case for assuming that the
multivariate test statistics are robust. Output contains an ANOVA summary table
for each of the dependent variables. The F ratios for each univariate ANOVA and
their significance values are listed in the columns labelled F and Sig. These values
are identical to those obtained if one-way ANOVA was conducted on each depen-
dent variable independently. As such, MANOVA offers only hypothetical protection
of in ated Type I error rates: there is no real-life adjustment made to the values
obtained (Table 6.18).
The Levene’s test clearly shows that among all the three dependent variables
financial behaviour, Annual Income and Annual Expenditure all insignificant with
more than (p > .05) means we need to retain null hypothesis of no differences. That
there is no significant difference in financial behaviour, Annual income and Annual
expenditure between financial access and financial non-access (Table 6.19).
The values of p in Output indicate that there was a significant difference between
Financial Access in terms of Financial Behaviour (p ¼ .751), Annual Income
(p ¼ .233), and Annual Expenditure (p ¼ .091). We should conclude that the
Financial Access has an insignificant effect on the financial behaviour, annual
income and annual expenditure (Fig. 6.1).
 146

Table 6.19 Tests of between-subjects effects

Source Dependent variable Type III sum of squares df Mean Square F Sig.
Corrected model Financial behaviour .002a 1 .002 .101a .751
Annual income 3,500,716,799.999b 1 3,500,716,799.999 1.430b .233
Annual expenditure 7,633,925,925.923c 1 7,633,925,925.923 2.883c .091
Intercept Financial behaviour 117.240 1 117.240 5401.784 .000
Annual income 2,264,023,315,200.001 1 2,264,023,315,200.001 924.549 .000
Annual expenditure 3,535,292,592,592.593 1 3,535,292,592,592.593 1335.036 .000
Financial access Financial behaviour .002 1 .002 .101 .751
Annual income 3,500,716,800.000 1 3,500,716,800.000 1.430 .233
Annual expenditure 7,633,925,925.926 1 7,633,925,925.926 2.883 .091
Error Financial behaviour 6.468 298 .022
Annual income 729,738,067,200.001 298 2,448,785,460.403
Annual expenditure 789,130,324,074.076 298 2,648,088,335.819
Total Financial behaviour 133.376 300
Annual income 3,244,255,027,200.000 300
Annual expenditure 4,733,275,000,000.000 300
Corrected total Financial behaviour 6.470 299
Annual income 733,238,784,000.000 299
Annual expenditure 796,764,250,000.000 299
6 Impact of Recent Financial Inclusion Schemes on Economic and. . .
6.7 Findings 147

Fig. 6.1 Histogram for normality test

6.7 Findings

Financial access has shown a positive relationship with income, those who have
financial access are found among better income groups. Financial access holders are
better than non-financial access but financial access is not sufficient and significant
contributor to the income.
Financial access re ects that better financial access people are attending a greater
number of working days in compare to non-access holders. Financial access holders
are in better position in compared to non-access holders with respect to number of
working hours. Moreover, we find people who have financial access are doing more
expenditures. The hypothetical findings are there is not existing any relationship
between financial access and income of Slum Dwellers. Financial Access and type of
remuneration are indifferent. Financial access and number of working days is
indifferent. Financial access is totally indifferent in explaining the number of
working hours.
148 6 Impact of Recent Financial Inclusion Schemes on Economic and. . .

Income expenditure mismatch of slums shows there exists a gap of 25.20 percent
of income among slums to fulfil their daily based expenditures. Those people who
have access are lacking 24.03 percent of income to fulfil their daily based
expenditures. The non-access holders have a net income mismatch of 25.81
percent. Beggars income and expenditure mismatch gap is 38.77 percent. Beggars
who have access falls short of 20 percent income to meet their expenditures. The
non-access beggars have income expenditure mismatch of 38.9287 percent which
means most of the people didn’t follow household budget. Access and non-access
play significant role in expenditure.
Financial access is playing significant role in having a house hold budget.
Financial access is determined by person who is running the household budget.
Financial access and non-access play a significant role in determining the income
shortages. Financial access plays a significant role on how you have soughted the
problem?
The findings of MANOVA model shows Most of the family are managing their
budget themselves. People are taking financial help from informal sources and are
far away from formal banking Institutions. The Financial Access has an insignificant
effect on the financial behaviour, annual income and annual expenditure.

6.8 Conclusions

Financial access one of the parameters used to describe the economic and financial
conditions of the people. The key determinants of financial access are income and
expenditure pattern of the people. Again, income is determined by level of educa-
tion, type of occupation etc. Income expenditure mismatch has been calculated for
slums and beggars in general. Later on, we have divided the access and non-access
pattern of slums and beggars to measure the differences of income and expenditure
gaps. The results show slums are better than beggars and within access and
non-access the access holders are better than non-access people in both the cases.
We have also used MANOVA model to understand economic and financial
behaviour of people and to check is there any significant difference in them after
the implementation of recent financial inclusion schemes. In conclusion we under-
stand all these schemes fail to improve the economic and financial behaviour of
slums and beggars in both the cities. The objective of the chapter was to check the
aggregate impact of recent financial inclusion schemes on their economic and
financial behaviour. The hypothesis was that These sections of population those
who have access of recent financial inclusion schemes are now relying more on
formal sources and institutions in comparison to those who have not access of these
schemes. But we reject our null hypothesis, that poor people are still outside from
formal sources of banking and are far away from financial inclusion.
References 149

References

Beck, T., & De la Torre, A. (2006). The basic analytics of access to financial services (Vol. 4026).
World Bank Publications.
Carbo, S., Gardener, E. P., & Molyneux, P. (2005). Financial exclusion. Palgrave Macmillan.
Chen, G., & Sebstad, J. (1996). Overview of studies on the impact of microenterprise credit. AIMS,
Management Systems International.
Chithra, N., Selvam, M. (2013), Determinants of financial inclusion: An empirical study on the
inter-state variations in India. Available from: https://www.ssrn.com/abstract¼2296096.
Accessed 17 Nov 2016.
Olaniyi, E., & Adeoye, B. (2016). Determinants of financial inclusion in Africa: A dynamic panel
data approach. University of Mauritius Research Journal, 22, 310–336.
World Bank. (2017). Financial inclusion is a key to reducing poverty and boosting prosperity.
Retrieved from http://www.worldbank.org/en/topic/financialinclusion/overview.
Chapter 7
Policy Recommendations for Better Future

7.1 Conclusions

This study was focussed to examine impact of recent financial inclusion schemes on
poorest of the poor people in Lucknow and Kolkata. The schemes have been
implemented after 2014 to address the issues of financial exclusion among these
unbanked population across the country. The schemes are PMJDY, MUDRA,
PMJJBY, PMSBY and APY. Government is claiming that they have opened
35.27 crore PMJDY account till 2019–20 in every household across the country
but these accounts are mostly dormant accounts people are not using them. The other
benefits of the scheme such as overdraft facility, direct bank transfers have not
achieved significant growth since its inception. Similarly, the MUDRA scheme
which was drafted to provide loans to small business the total amount disbursed in
2015–16 is 132,954.73 crores and reached 89,934.72 crores in 2020–21. But in case
of poorest of the poor these schemes, again didn’t show any inclusion of ultra-poor.
The social security Schemes like PMJJBY the number of claims received from
2015–16 are 22,212 crores and reached 35,997 crores in 2017–18. Under PMSBY
the number of claims disbursed from 2015–16 are 2757 crores reached the mark of
15,746 crores respectively and the assets under management 506 crores in 2016 are
reached to 12,696 crores in 2020. All these bigger claims from government didn’t
show any performance at ground level. So, this study was incorporated to check the
impact of financial inclusion schemes on ultra-poor in Lucknow and Kolkata. To
understand financial inclusion and exclusion we have followed in depth literature
review and theoretical bases to understand the aspects of financial inclusion.
The theoretical and the other empirical evidence of studies has shown that poor
people are saving less as compared to middle- and higher-income families because of
social, economic, psychological, and the institutional factors. Financial education
and financial incentives can help poor to save more. Institutions are also excluding
people from taking part in financial activities by tight rules and regulations. Poor
people are always in traps due to which it becomes tough for them to save or think

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 151
F. Ahmad Malik, D. K. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7_7
152 7 Policy Recommendations for Better Future

about use of various banking services. The saving behaviour of poor people is
collectively determined by socio economic conditions and as well as by institutional
barriers etc.
In this study we try to understand theoretical bases of financial inclusion. Finan-
cial inclusion is a spectrum of various dimensions like savings, credit, and use of
various banking products by poor people and what is the status of financial inclusion
among these urban poor. Savings is concerned one of the fundamental variables
which improves overall wellbeing of the people to fight life crisis. Further, savings
itself is decided by various other parameters like income, Human capital, assets and
other properties available to the people etc. Besides, this the savings is commonly
done to meet the unpredictable activities like health issues, accidents, education of
children, marriage of children etc. Savings basically depends up on the ability and
capability of an individual he/she have. As Katona (1975), said it is decided by the
ability plus willingness. On similar grounds Keynes (1975) discussed three motives
of the savings like transactional, precautionary and speculative motive. Katona again
in (1975) explains savings on three grounds contractual savings, residual savings,
and discretionary savings. Similarly, Wärneryd (1999) identified four motives, habit
or controlling expenditure, precautionary motive, bequest motive and profit motive.
Modigliani explained savings by working years and retirement years. Sturm (1983),
argued that people normally save during earning years till retirement age. After
retirement they are dissaving. Romer (2011) said the earnings in initial years are
distressed into two parts consumption and savings. People ones reaching to the
retirement age savings are financed plus interest rate to fulfil consumption require-
ments. Deaton (1989) said in developing countries poor people have large family
size, due to which they are only saving for consumption purpose and are unable to
save for retirement or bequest.
Keeping all these studies in view, I understand that all people are behaving
rationally while keeping other thins same. Every individual wants to save, for
different life purposes, all this depends upon occupation, income, education, region,
capability, willingness etc. In case of poor people almost all these things are missing
to save on. Therefore, the nature of savings among the poor is quite different. Now
question arises how to boost savings among the poor? To support the poor so that
they could be able to save for future and they can live a better life, we need to look at
them from several perspectives like basic amenities of life, education, education,
housing facility, occupation, earnings/income etc.so it demands a spectrum of
services with proper rehabilitation as well as adaptation.
Individual savings are directly determined by age (Modigliani & Ando, 1957).
Permeant income theory suggest savings are done because of permeant income at
disposal. In developing countries savings are dependent income, Higher the income
higher will be the savings and vice versa. Studies have shown people in developing
countries are working in informal sectors like Indian, other south Asian countries
and Sub-Sahara Africana countries. They are lacking formal institutional support to
save. Savings are also determined by psychological factors. Behavioural economists
also stress on individual approach, optimistic and pessimistic behaviour etc.
7.1 Conclusions 153

For capturing the concept of financial inclusion and access of financial institu-
tions, academicians and policy makers are now using the concept of financial
inclusion index. The Financial inclusion index represents here mainly three broad
variables i.e. accessibility, availability and usage. This study has analysed financial
inclusion from 2006 to 2019. The main parameters are number of bank accounts per
1000 adults, Number of ATM’s and bank branches per 100,000 adults, Volume of
deposits plus loans percentage of GDP. Number of bank accounts from 2006 to 2019
has improved a lot and almost every house hold has a bank account. But the other
two variables availability and usage didn’t improve too much as per the demand. We
have used financial inclusion index to measure financial inclusion of India. The
estimated results lie between 0 and 1, where 0 represents complete financial exclu-
sion and 1 represents complete inclusion. Further the scale has been divided in to
three broad categories which are. 1. 0  FII  0.4; indicates low financial inclusion,
LFI; 2. 0.4 < FII  0.6; indicates medium financial inclusion, MFI and 3. 0.6 < FII  1;
indicates high financial inclusion, HFI. As per the scale of financial inclusion we find
India captures the place of medium financial inclusion position. We also investigated
impact of recent financial inclusion schemes on financial inclusion index with the
help of the Dummy regression models. The results of the model show positive
change in financial inclusion index after 2014.
After analyses of financial inclusion index calculated from secondary data
sources collected from world bank, IMF and RBI. We have directly focussed on
our primary survey study to get more insights from the ground about two urban poor
groups from Lucknow and Kolkata.
We have focused on identifying the access and non-access pattern of Slum
Dwellers and Beggars in Lucknow and Kolkata. Previous studies have identified
responsible factors which are determining Financial Access of the people. These
factors are varied from region to region but are unanimously same everywhere.
Therefore, in this study, we have analysed demographic as well as other important
associated variables which are playing important role in financial access. Our study
has been divided into major four parts. The First Part discusses socio economic
conditions of slums and Beggars. The second part puts lights on access and
non-access pattern of financial products and services. Part third explores, pattern
of access and non-access with reference to socio economic factors. From all the four
sections, we find Lucknow slums as well as beggars are in worst condition in
comparison to Kolkata. The core objective was to study the access and non-access
pattern of recent financial inclusion schemes to the poorest of the poor. From the
statistical analysis, it is found the null hypothesis have been accepted that Due to lack
of awareness and problems of illiteracy the population of poorest of the poor have
very limited access to recent financial inclusion schemes.
After awareness of recent financial inclusion schemes, we were also interest to
understand the socio-economic status of the people and their participation in these
schemes. The socio-economic and financial inclusion status of the poorest of the
poor in India. First, we have analysed demographic variables and their relationship
with financial inclusion schemes. Secondly, we have used the chi-square test to
check the hypothesis to know the statistical significance. We have also developed
154 7 Policy Recommendations for Better Future

indexes on social-economic status, financial inclusion index, and financial literacy,

to draw the representative statistical inferences. We have also used twin regression
models to check how representative are financial inclusion schemes in the develop-
ment of socio-economic conditions. The objective of our study was to explore the
changes in socio-economic conditions of the poorest of the poor due to recent
financial inclusion schemes. Our hypothesis was that there is not any significant
change taken place in the socio-economic conditions of the poorest of the poor after
the implementation of recent financial inclusion schemes. Finally, accept our null
hypothesis There is not any a significant change took place in socio-economic
conditions of the poorest of the poor after implementation of recent financial
inclusion schemes.
Further, we also want to know how financial access represents the socio-
economic conditions of slums and beggars in Lucknow and Kolkata. Financial
access one of the parameters used to describe the economic and financial conditions
of the people. The key determinants of financial access are income and expenditure
pattern of the people. Again, income is determined by level of education, type of
occupation etc. Income expenditure mismatch has been calculated for slums and
beggars in general. Later on, we have divided the access and non-access pattern of
slums and beggars to measure the differences of income and expenditure gaps. The
results show slums are better than beggars and within access and non-access the
access holders are better than non-access people in both the cases.
We have also used MANOVA model to understand economic and financial
behaviour of people and to check is there any significant difference in them after
the implementation of recent financial inclusion schemes. In conclusion we under-
stand all these schemes fail to improve the economic and financial behaviour of
slums and beggars in both the cities. The objective of the chapter was to check the
aggregate impact of recent financial inclusion schemes on their economic and
financial behaviour. The hypothesis was that there is significant impact of recent
financial inclusion schemes on economic and financial behaviour of the poorest of
the poor. But we reject our null hypothesis, that there is insignificant impact of recent
financial inclusion schemes on economic and financial behaviour of the poorest of
the poor.

7.2 Findings of the Study

Savings are determined unanimously by various factors, like Age, Income, Occupa-
tion, Willingness to Pay, Capability, and other psychological factors. Savings mostly
relies on transactional, precautionary, and speculative motives, their exists huge
differences between developed and developing countries. Financial inclusion index
stands at medium stage of (0.4 < FII < 0.6, which indicates medium financial
inclusion.
Socio-Economic Conditions and Pattern of Recent Financial Inclusion Schemes
to the Poorest of Poor” More male participants are engaged in begging from
7.2 Findings of the Study 155

Lucknow, and females from Kolkata. The Lucknow beggars are distributed almost
equally among all social categories. But, in Kolkata there is a huge gap of partici-
pation between categories like ST and General, huge number of participants are from
SC and OBC populations. Beggars are more illiterate in Kolkata. There is a heavy
income difference in Lucknow among low-level income beggars and high-income
beggars but In Kolkata, the income difference is less, Beggars from Kolkata are
engaged in other economic activities too.
The Kolkata beggars are rich than Lucknow beggars because of a greater number
of working days per month. Beggars from Kolkata are working hard by utilizing
more time on begging than Lucknow. Working hours is also positively related to
income of the respondents, a greater number of working hours can generate more
income, we find Kolkata beggars are in better position to Lucknow beggars. More-
over, we find that beggars from Kolkata are earning more in comparison to Lucknow
beggars. Beggars are facing the harsh living conditions in both cities they are almost
equally living with the worst housing conditions. In Lucknow none of the beggar’s
avail electricity facility while in Kolkata 2 percent of Beggars are using electricity.
The sanitation facility is better in Kolkata as compared to Lucknow because more
people from Lucknow are going open fields for toilet purposes. Second more people
are participants of commonly shared public toilets in Lucknow than Kolkata. All
beggars are doing begging because they are forced to beg to feed their families.
Kolkata slums have good housing conditions in comparison to Lucknow slums.
we find Lucknow slums are more dependent on public taps to get water where
Kolkata slums are enjoying these facilities at home. The availability of electricity for
Kolkata slums are better than Lucknow slums.
Slums in Lucknow are more dependent on firewood for cooking. Lucknow slums
are also lacking toilet facility available to them that is why they are going open fields
but the condition of slums in Kolkata is much better because 99 percent people have
toilets available in their homes. The problem of disability is more found among
slums in Kolkata than Lucknow.
The access of banking services availed by Slum Dwellers are below 4 percent.
The important digital services (Internet Banking, Remittances, Mobile Banking,
Direct Benefit Transfer, etc) provided by banks. None of these services has been
availed by Slums Dwellers in both of the regions. The reasons for not availing
remittance are people don’t have enough money, lack of knowledge to use remit-
tance facility and high cost, and other reasons.
In case of saving account, people are not willing to open bank account due to lack
of money or income. The BC model is not feasible for these sections. The bigger
reason for not availing BCs services because they are not aware, nor they have
knowledge of BCs. Slums have been excluded from formal banking system. They
are fulfilling their credit needs informally. The reasons are poor people don’t have
income and essential documents to use these services. For the rest of the insurance
products, people are not aware of it. Holdings and transactions are faraway questions
because these people neither hold any insurance products. So, the factors responsible
are supply oriented like people are unaware about banking products, unsuitable and
costly products, bigger problem is they are financially illiterate. From demand side
156 7 Policy Recommendations for Better Future

they lack money and documents to avail such services. Therefore, it seems financial
services are not demand oriented. Employees provident fund is not demand oriented
as people in slums are mostly unemployed and their informal jobs are not encour-
aged by supply base products, 97 percent don’t have the necessary documents to
open a bank account.
None of the beggars has availed of any banking service from the formal banking
system in Lucknow and Kolkata. Reasons for not Availing any Remittance facility
from the bank is because people don’t have enough money and people don’t have
knowledge about banking remittance. The reasons for not availing credit from banks
is due to the following reasons, don’t need credit, doesn’t have knowledge how to
get it, claimed banking procedures are difficult to understand, don’t have essential
documents and, beggars have other reasons etc.
Beggars have not access to the essential documents. Both slums are beggars
didn’t access the following services under PMJDY Overdraft Facility, Access to
Insurance, Personal Accidental Insurance. Slums and beggars are largely excluded
from the MUDRA scheme. They are unaware, they are lacking essential documents
and the products are not suitable for them Both the populations don’t access this
scheme because of numerous reasons like, they don’t have money, they are not
aware and lack of documents are the reasons for not having access to PMJJBY
access to PMSBY and APY. In the case of beggars both the schemes are insignif-
icant, they are unaware and don’t have any access while in case of slums less people
are aware of the scheme and more than 99 percent don’t have access. Females have
more access than males, it is because poor women are working and the main target of
PMJDY was to provide access to at least one woman per household.
The hypothetical results show that Education has a significant relation in opening
a bank account occupation is not having any significant role in the case of slums and
beggars. Income is a reason for opening a bank account especially for poor people
like slums and beggars There is no relationship between Opening Bank account and
Education of the people. There is not a positive relation between opening a bank
account and occupation of the slums. Opening bank account and income of a person
among slums are not independent. Income plays positive role in determining bank
account. There is significant relationship between Opening Bank account and
Gender of the people. There is no relationship in opening Bank account and Age
of the people. Opening bank account and Economic Status of a person among slums
are not independent. Economic status is playing vital role in opening a bank account.
Opening bank account and PMJDY Awareness of a person among slums are not
independent. PMJDY Awareness is playing vital role in opening a bank account.
Opening bank account and Documents of a person among slums are not indepen-
dent. Documents are playing vital role in opening a bank account.
The PMJDY account has better access among women. Approximately more than
70 percent of urban poor are still out of the banking access. The old age people are
having less access as compared to the adult and young age. Low differences among
caste in banking access in the case of the poorest of the poor. Access is directly
related to education which means higher the education higher are the chances of
7.2 Findings of the Study 157

banking access. Banking access plays significant role in Income, which means more
the access better will be the income.
Non-access has a negative role on housing conditions of the people living in
slums, because most of them are living in hunts and semi pucca houses. Those who
have access to PMJDY account are better than non-access people. Moreover, few
people have access to PMJDY and electricity. Most of the slums are lacking the
benefits of LPG subsidy which is provided only who have bank access. People are
lacking financial access as well as access to home-based toilets. The disable people
are also lacking access to get disable pension benefits. In case of slums, the
non-access is also visible by the reasons of low economic status. The most
non-access people belong to BPL and RED CARD categories. People with low
quality of assets are largely found among non-access holders.
From hypothesis results we find Education is playing insignificant role in opening
a bank account in case of slums in Lucknow and Kolkata. Occupation plays
significant role in determining the banking access in case of slums in both Lucknow
and Kolkata. Income plays an insignificant role in opening Bank account among
slums. Type of House is insignificant in determining to open a bank account.
Banking access and availability of drinking water facility are indifferent to each
other. Banking access and Availability of Electricity facility are indifferent to each
other. Banking access and Type of Fuel are indifferent each other. Banking access
and Type of Toilet Facility are indifferent to each other. Banking access and Persons
with Disability are associated with each other. Banking access and Economic Status
are indifferent each other. Banking access and Assets of the House Hold are
associated with each other.
While opening a PMJDY Account in every household there will be chances of
0.0612 units of change in their socio-economic index. Further, we constructed an
index on socio-economic conditions of slums namely socio-economic index to check
the impact of recent financial inclusion schemes on SES of slums, for this we run a
regression model to check how PMJDY Account in uences SEI, the results of the
model are significant at a 0.1% level of significance, which claims that there is a
positive impact of recent financial inclusion schemes on socioeconomic status of
slums in Lucknow and Kolkata. Lastly, we have again constructed an index on
financial inclusion to check the awareness, attitude and knowledge among slums.
And again, we cross-checked with another regression model to check How SEI is
in uenced by FI, where we find results which are totally opposite to our first
regression model. So, we conclude that banking access is not a complete tool to
impact on the socio-economic status of people.
Financial access has shown a positive relationship with income, those who have
financial access are found among better income groups. Financial access holders are
better than non-financial access but financial access is not sufficient and significant
contributor to the income. Financial access re ects that better financial access people
are attending a greater number of working days in compare to non-access holders.
Financial access holders are in better position in compared to non-access holders
with respect to number of working hours. Moreover, we find people who have
financial access are doing more expenditures. The hypothetical findings are there
158 7 Policy Recommendations for Better Future

is not existing any relationship between financial access and income of Slum
Dwellers. Financial Access and type of remuneration are indifferent. Financial
access and number of working days is indifferent. Financial access is totally indif-
ferent in explaining the number of working hours.
Income expenditure mismatch of slums shows there exists a gap of 25.20 percent
of income among slums to fulfil their daily based expenditures. Those people who
have access are lacking 24.03 percent of income to fulfil their daily based
expenditures. The non-access holders have a net income mismatch of 25.81
percent. Beggars’ income and expenditure mismatch gap is 38.77 percent. Beggars
who have access falls short of 20 percent income to meet their expenditures. The
non-access beggars have income expenditure mismatch of 38.9287 percent, which
means most of the people didn’t follow household budget. Access and non-access
play significant role in expenditure.
Financial access is playing significant role in having a house hold budget.
Financial access is determined by person who is running the household budget.
Financial access and non-access play a significant role in determining the income
shortages. Financial access plays a significant role on how you have soughted the
problem?
The findings of MANOVA model shows Most of the family are managing their
budget themselves. People are taking financial help from informal sources and are
far away from formal banking Institutions. The Financial Access has an insignificant
effect on the financial behaviour, annual income and annual expenditure.

7.3 Recommendations of the Study

• Financial inclusion among poor could be developed by emphasizing the three key
dimensions, penetration, Availability and Usage. Moreover, the gap aroused due
to digitalization in banking demands to develop skills, among poor people so that
they can use financial inclusion services easily.
• Access of recent financial inclusion schemes among poor people in India, dem-
onstrates to redevelop all the related schemes to guarantee access plus usage as
per their necessities.
• Financial inclusion spectrum should be made in line to develop socio economic
conditions of urban poor in India. Besides this financial inclusion should be made
compulsory to address and develop all developmental indictors together, Like
HDI, FII, Multiply poverty Index, Health Index etc.
• To ensure the access of financial inclusion services at the door step to the poor.
There is also need of home base awareness on financial literacy, provisions and
benefits of the financial inclusion schemes.
• Financial Institutions should also made to target as well as develop sustainable
financial behaviour among the poor.
References 159

7.4 Limitations of the Study

1. The study has been restricted only to the Lucknow and Kolkata cities.
2. The population of the study is very much volatile and inconsistent in their
response. Mostly they are illiterate and unaware about the issues and problems
they are facing.
3. Sample size is too small to generalise the overall results.
4. Some of the results may be spurious due to in appropriate information given by
the respondents.
5. Another major limitation of the study is that we do not have any official report or
data on these populations regarding financial access and non-access.

References

Deaton, A. (1989). Saving in developing countries: Theory and review. Proceedings of the World
Bank, annual conference on development economics. World Bank.
Katona, G. (1975). Psychological economics. Elsevier.
Keynes, M. (Ed.). (1975). Essays on John Maynard Keynes. Cambridge University Press.
Modigliani, F., & Ando, A. K. (1957). Tests of the life cycle hypothesis of savings. Bulletin of the
Oxford Institute of Statistics, 19, 99–124.
Romer, C. D. (2011). Restoring American prosperity: Challenges and solutions.
Sturm, P. H. (1983). Determinants of saving: Theory and evidence. OECD Economic Studies,
1(1983), 147–196.
Wärneryd, K.-E. (1999). The psychology of saving – A study on economic psychology. Edward
Elgar.
Index

A reasons for not opening bank account,

Access and non-access patterns 77, 78
beggars remittance facility, 77, 79
banking and savings awareness, 84 socio economic factors slums and beggars
banking correspondent, 86, 87, 155 documents, 89
banking facilities/services availed by, MUDRA scheme, 90, 91, 105
84, 85, 105 PMDY scheme, 89, 90, 156
claim for insurance, 87, 88, 105 PMJDY account, 156, 157
credit or loan facility, 84, 86 PMJJBY, 90, 91
insurance products, 87, 105 PMSBY and APY, 90, 91
loan from sources other than banks, 87 Atal Pension Yojana (APY), 10, 45
pension schemes, 88 create awareness, 44
reasons for not having insurance, 87, 88 features of, 43–44
reasons for not opening bank account, Average propensity to save (APS), 23
84, 85, 155
remittance facility, 84, 85, 155
slums B
awareness, holdings, and transactions of Banking access and socioeconomic status,
insurance products, 80, 82 114–120
banking correspondent, 80, 81, 105 Banking correspondents (BCs), 80, 81, 86, 87,
banking facilities/ services availed by, 105, 155
77, 78, 105 Banking policies, 37
bankings and savings, 75, 77 Bartlett’s test, 144
banking services through BCs, 80, 81, Beggars
105 access and non-access patterns (see Access
insurance claim, 81, 83, 105 and non-access patterns, beggars)
loans/credit availed other than banks, 80, financial access (see Pradhan Mantri
81 Jan-Dhan Yojana (PMJDY))
pension products, 81, 83 income expenditure mismatch among,
reasons for not availing credit or loan 136–139
facility, 78, 79 socio-economic conditions (see Socio-
reasons for not having insurance, 81, 82 economic conditions of slums,
reasons for not having pension account, beggars)
82, 83 Behavioural economists, 25, 31, 152

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 161
F. Ahmad Malik, D. Yadav, Financial Inclusion Schemes in India,
https://doi.org/10.1007/978-981-19-1316-7
162 Index

Binary logistic regression model, 101–103 schemes and changing socio-economic

Box’s test, 144 status, 17
BPL and RED CARD categories, 157 socio-economic conditions and access and
BPL category, 62, 64, 73, 75, 76, 99, 112, 113, non-access pattern, 17
119, 127, 157 socioeconomic status, 109
hypothesis, ow chart of, 114–120
living status of slums, 110–114
C regression model, 121–127
Chi square test, 95, 139 socio economic index, 121
Consumption, 24 study variables, 120
study
objectives of, 12
E scope of, 11
Expenditure pattern, slums, 135–136 supply-driven financial policies and poor,
problems of, 8
Financial inclusion index, 153, 154
F Financial inclusion schemes, 132
Financial access Atal Pension Yojana (APY), 43–45
of slum dwellers, 132–135, 140–142 banking policies, 37
of slums, 135–136 calculation of, 45–47
slums and beggars, PMJDY account, 105, concept of, 38
156–158 development of, 45
binary logistic regression model, findings, 147–148
101–103 HDI calculations, 45
caste wise access, 92 for India 2005–2019, 47–49
education-wise access, 92, 93 MANOVA model, 143–147
gender wise access, 92, 93 Micro Units Development finance Agency
hyptohesis testing, 95–101 (MUDRA), 40, 41
income wise access, 94, 95 Pradhan Mantri Jan-Dhan Yojana
occupation wise access, 94 (PMJDY), 39–40
supply side, 53 Pradhan Mantri Jeevan Jyoti Bima Yojana
Financial attitude index, 123 (PMJJBY), 41–43
Financial behaviour, slum dwellers, 140–142 Pradhan Mantri Mudra Yojana
Financial exclusion, 4–8 (PMMY), 40
Financial inclusion Pradhan Mantri Suraksha Bima Yojana
concept of, 4–8 (PMSBY), 40–43
consolidated financial literacy index, regression model, 49–50
126–127 slum dwellers
data analysis tools, 13–14 financial access and financial behaviour
definition of, 2–3 of, 140–142
financial attitude index, 123 financial access and income pattern of,
financial knowledge index, 125–126 132–135
financial theories and relevance in, 15–16 income expenditure mismatch among,
hypothesis, 12 136–139
impact of, 17 slums, financial access and expenditure
index construction, 123–125 pattern of, 135–136
limitations, 159 Financial literacy, 53
methodology, 12–13 Financial services, 4
policy recommendations, 17 Financial theories
recommendations, 158 Katona, 22
research problem, statement of, 11–12 Keynes, 22
research questions, 11 Modigliani, 22
schemes, 8–10, 16 Wärnderyd, 22
Index 163

H Pradhan Mantri Jan-Dhan Yojana (PMJDY),

Hyptohesis testing, 95–101 8–10, 23, 39–40, 110–114
chi square, 114, 117
slums and beggars, financial access, 105,
I 156–158
Inclusive development mechanism, 14 binary logistic regression model, 101–103
Income uctuations, 23 caste wise access, 92
Income mismatch gap of beggars, 138 education-wise access, 92, 93
Income pattern of slum dwellers, 132–135 gender wise access, 92, 93
Individual-oriented perspectives, 26–28 hyptohesis testing, 95–101
Individual savings, 152 income wise access, 94, 95
Institutional perspective, 29–30 occupation wise access, 94
tabulation of, 115–120
Pradhan Mantri Jeevan Jyoti Bima Yojana
K (PMJJBY), 10, 41–43, 90, 91, 151
Katona, 22 Pradhan Mantri Mudra Yojana (PMMY), 40
Keynes, 22 Pradhan Mantri Suraksha Bima Yojana
Keynesian model, 23 (PMSBY), 40–43, 151
Khan Committee Report, 37 Precautionary savings, 152
Problems of exclusion, 38

L
Levene’s test, 145 R
Life cycle hypothesis (LCH), 25–27 Rangarajan committee, 23
Life insurance scheme, 80, 82 RBI-led drive for financial inclusion, 3
RED CARD category, 64, 73, 75, 76, 99, 112,
113, 119, 127, 157
M Regression model, 49–50, 121–122
MANOVA model, 13, 154, 158 mathematical equation, 121, 126
Marginal propensity to save (MPS), 23 regression equation, 122, 126–127
Micro Units Development finance
Agency (MUDRA), 9, 40, 41, 90,
91, 151 S
Modigliani, 22 Savings
Multivariate analysis of variance (MANOVA), developing countries, 152
132, 143–147 individual savings, 152
Multivariate test, 145 motives of, 152
in poor, 152
Slum dwellers
N financial access and financial behaviour of,
National Rural Employment Guarantee 140–142
Programme (NREGA), 4 financial access and income pattern of,
Net income mismatch gap of beggars, 139 132–135
Net income mismatch gap of slum income expenditure mismatch among,
dwellers, 137 136–139
No-Frills bank account, 37 Slums
access and non-access patterns (see Access
and non-access patterns, slums)
O financial access (see Pradhan Mantri
Overlapping Generation Model (OLG), 25 Jan-Dhan Yojana (PMJDY))
financial access and expenditure pattern of,
135–136
P socio-economic conditions (see Socio-
Permanent income hypothesis (PIH), 26 economic conditions of slums)
 164 Index

Socio-economic conditions of slums frequency of income, 68, 69

beggars in Lucknow and Kolkata, 153, 154 fuel type, 72–74, 104, 155
amount paid/earned per day, 59, 60 gender-wise percentage, 65, 66
annual income, 56, 57 number of disable persons, 73, 75
assets owned by, 64, 65 number of working days, 68–70
drinking water facility, 60, 61, 104, 155 number of working hours, 70, 71
economic status, 62, 64 percentage-wise distribution, 65
educational profile, 56 sanitation facility, 73, 74, 104, 155
electricity facility, 60, 62, 104, 155 Socio economic index, 121
frequency of income, 58 Socioeconomic status (SES), 109
fuel used, 61–63 banking access and, 114–120
gender wise percentage distribution, 54, hypothesis, ow chart of, 114–120
55 living status of slums, 110–114
housing condition, 60, 61, 104, 155 regression model, 121–127
number of working days in a month, 57, socio economic index, 121
58, 104, 155 study variables, 120
number of working hours in a month, 58, Sociological perspectives, 28–29
59, 104, 155 Speculative savings, 152
social categories, 154 Supply-driven financial policies, 8
state wise caste of, 55
toilet/sanitation facility, 62, 63, 104, 155
types of, 57 T
state-wise slum conditions in Lucknow and Transactional savings, 152
Kolkata, 153, 154
annual income of, 67, 68
assets, 74, 76 U
caste of, 65, 66 United Nations (UN), 1
distribution wise type of house, 70, 71
drinking water facility, 71, 72
economic status, 73, 75, 76 W
education level, 65, 67 Wärnderyd, 22
electricity facility, 72, 73

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