Over the years, India’s financial ecosystem has been evolving to newer heights. With digital payments becoming a part of our day-to-day lives along with newer financial support schemes for women and underserved communities, India is striving to achieve an inclusive financial structure for all. In 2023, the Reserve Bank of India declared India’s Financial Inclusion Index standing at 60.1 whereas, in 2024, the Financial Inclusion Index stands increased at 64.2, hinting that the efforts towards having an equitable economic paradigm along with improvement in economic opportunities are possible in a country like India.
What is financial inclusion?
By definition, the Financial Inclusion programme aims to ensure that both individuals and businesses can access financial services that are useful and affordable, such as transactions, payments, savings, credit and insurance, responsibly and sustainably.
Furthermore, the importance of financial inclusion has been identified in almost every Sustainable Development Goal. It is directly referenced as a target in eight of the seventeen goals. These include SDG 1, which focuses on eradicating poverty; SDG 2, aimed at ending hunger, ensuring food security, and fostering sustainable agriculture; SDG 3, which addresses health and well-being; SDG 5, dedicated to gender equality and the economic empowerment of women; SDG 8, which promotes economic growth and employment; SDG 9, which supports industry, innovation, and infrastructure; and SDG 10, which seeks to reduce inequality.
Furthermore, SDG 17, which concentrates on enhancing the means of implementation, implicitly highlights the importance of financial inclusion by encouraging increased savings mobilisation for investment and consumption, thereby potentially driving economic growth.
As India aims to become a $7 Trillion economy by 2030, it gets even more important for us to create financial inclusive programmes and institutions that offer equitable financial services to all. Government interventions like the Jan Dhan Yojana are among the most promising financial schemes. They have enabled over 50 crore people to open bank accounts and deposit over INR 2 Lakh crore, becoming part of the formal banking system.
Why are financial inclusive programmes important for India?
India’s robust economic growth has certainly become an example for many to follow globally. However, when it comes to achieving holistic economic growth for all and by all, we still have a long way to go.
India’s underserved population still grapples with poor financial conditions due to lack of education, unemployment, skill training and poor health which eventually has kept them and their families in the loop of economic stagnation.
Considering the importance of having an accessible and inclusive financial environment for all, the core focus now should be to develop low-income communities with opportunities that would enable them to develop themselves financially sustainable.
CSR initiatives in banks for empowering underserved communities
Over the years, Banking CSR Strategies have opened up many opportunities for the underserved communities in India. With several financial inclusion programmes introduced by banks, children and their families are getting the chance to access e-literacy and financial literacy ,so that they can develop and be aligned to the demands of changing times.
Interventions by Axis Bank, SBI and RBL for empowering communities with sustainable livelihood training and opportunities have been very successful. Such initiatives have proven that CSR in banking can create a real impact at the grassroots level because, with their support and expertise, underserved communities can get knowledge on financial literacy and financial schemes that can help them navigate and build their finances better.
CSR in banking- Going forward
By emphasising financial literacy, skill development and improved access to banking services, financial institutions play a crucial role in addressing the needs of underserved communities. Additionally, banks can provide microloans to small enterprises, support educational initiatives, and fund healthcare projects in rural areas, thereby facilitating the integration of these communities into the mainstream economy.
Moreover, banking CSR strategies should include investments in infrastructure to advance digital financial inclusion, ensuring that remote areas have access to essential banking services.
These initiatives are instrumental in transforming lives, stimulating economic growth and increasing social equity, significantly advancing the sustainable development of underserved populations in India.
Swabhiman- Financial Inclusion Programme for Women
With a focus on enabling women with financial stability, Smile Foundation’s Swabhiman programme has been tailored to provide them with entrepreneurship and skill development training.
This program supports underserved women from India’s urban poor and rural communities by providing them with the opportunity to achieve economic empowerment through starting their own businesses. They receive training in business basics such as financial management, marketing and communication, financial literacy, and digital literacy, enabling them to sustain and expand their small businesses to create a stable livelihood for themselves, their families and their communities.
Several financial institutions such as SBI and IndoStar Home Finance have partnered with the Swabhiman programme to support women from marginalised communities. By providing them with workshops on financial literacy and business management skills, these financial institutions have contributed positively towards empowering women while also laying down the foundations of inclusive financial culture in India.
Smile Foundation firmly believes that creating lasting and meaningful change requires the collective efforts of all social stakeholders working toward a common goal. By consolidating our resources to promote an inclusive financial environment in India, banks and Smile Foundation can collaborate to enhance the impact of governmental financial initiatives. This potential partnership can achieve substantial and far-reaching results, offering women and their families the opportunity for financial stability.
Additionally, it aims to create a comprehensive and inclusive financial ecosystem that empowers these communities to overcome economic challenges and secure lasting financial well-being.
