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Financial inclusion in India: An axiomatic approach

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  • Chakravarty, Satya R.
  • Pal, Rupayan

Abstract

In this paper we first develop an axiomatic measure of financial inclusion. This measure is readily implementable and useful to determine policy priorities to promote financial inclusion. Next, we demonstrate that supply side data on banking services can be usefully employed to measure financial inclusion. Third, we examine the effects of major banking policies on financial inclusion across states in India during 1972–2009, using panel data econometrics techniques. We find that the social-banking policy has played crucial role to foster financial inclusion across states in India during 1977–1990. Thereafter, the move toward pro-market financial sector reform has adversely affected the pace of financial inclusion. This paper identifies geographic penetration of banks and credit availability as two policy targets to foster financial inclusion in India.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 35 (2013)
Issue (Month): 5 ()
Pages: 813-837

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Handle: RePEc:eee:jpolmo:v:35:y:2013:i:5:p:813-837

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Web page: http://www.elsevier.com/locate/inca/505735

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Keywords: Financial inclusion; Axioms; Index; Social banking policy;

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Cited by:
  1. Recep YORULMAZ, 2013. "Construction of a Regional Financial Inclusion Index in Turkey," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 7(1), pages 79-101.
  2. Goran Amidžić & Alexander Massara & André Mialou, 2014. "Assessing Countries’ Financial Inclusion Standing - A New Composite Index," IMF Working Papers 14/36, International Monetary Fund.

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