Factors Associated
With Financial Inclusion
The
literature on financial inclusion has identified financial exclusion as
reflection of a broader problem of “social exclusion”.
In the industrialized and high income countries having
a well-developed banking system, studies have shown that the exclusion from the
financial system occurs to persons who belong to low-income groups, the ethnic
minorities, immigrants, the aged and so on (Barr, 2004; Kempsonand Whyley,
1998; Connolyand Hajaj, 2001).
There is also a geographical factor; people living in
rural areas and in locations that are remote from urban financial centres are
more likely to be financially excluded (Leyshonand Thrift, 1995; Kempsonand and
Whyley2001).
Further, countries
with low levels of income inequality tend to have relatively high level of
financial inclusion (Buckland et al, 2005; Kempsonand and Whyley, 1998).Another
factor that can be associated with financial inclusion is employment (Goodwin
et al, 2000).
Infrastructure related factors: road network, telephone
and television network, access to information through newspapers, radio, cable
TV, computer and internet.
Banking sector factors: indicators of the health of the banking system, ownership
pattern and interest rate.
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